-----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, Sn6AUtRFUJpURHyfYX6D8iV6UWqvwpROi8snZsIGklni4gbI+iSP3yqAcjiPE8Ej 9cS9IAnWa8LVuMJ3azL52Q== 0000950130-98-005243.txt : 19981105 0000950130-98-005243.hdr.sgml : 19981105 ACCESSION NUMBER: 0000950130-98-005243 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19981104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOX ENTERTAINMENT GROUP INC CENTRAL INDEX KEY: 0001068002 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 954066193 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-61515 FILM NUMBER: 98737505 BUSINESS ADDRESS: STREET 1: 1211 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2128527000 MAIL ADDRESS: STREET 1: 1211 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 S-1/A 1 AMENDMENT #4 TO FORM S-1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 4, 1998 REGISTRATION NO. 333-61515 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- AMENDMENT NO. 4 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- FOX ENTERTAINMENT GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ---------------- DELAWARE 4833 95-4066193 (STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER JURISDICTION INDUSTRIAL IDENTIFICATION NO.) OF INCORPORATION OR CLASSIFICATION CODE ORGANIZATION) NUMBER) 1211 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10036 (212) 852-7111 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ---------------- ARTHUR M. SISKIND, ESQ. SENIOR EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL FOX ENTERTAINMENT GROUP, INC. 1211 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10036 (212) 852-7111 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES TO: JEFFREY W. RUBIN, ESQ. VINCENT J. PISANO, ESQ. STEPHEN H. KAY, ESQ. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP SQUADRON, ELLENOFF, PLESENT & 919 THIRD AVENUE SHEINFELD, LLP NEW YORK, NEW YORK 10022 551 FIFTH AVENUE (212) 735-3000 NEW YORK, NEW YORK 10176 (212) 661-6500 ---------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box. [_] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [_] ---------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- EXPLANATORY NOTE This Amendment No. 4 to the Form S-1 Registration Statement of Fox Entertainment Group, Inc. contains only certain exhibits which had previously been designated in the Exhibit Index as to be filed by amendment. This Amendment No. 4 contains Exhibit Nos. 1.1, 1.2, 3.1, 3.2, 4.1, 10.21, 10.29, 10.31, 10.32 and 21.1. SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 4 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON NOVEMBER 4, 1998. Fox Entertainment Group, Inc. /s/ Arthur M. Siskind By: ____________________________ ARTHUR M. SISKIND IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT NO. 4 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES STATED.
SIGNATURE TITLE DATE --------- ----- ---- * Chairman and Chief Executive November 4, 1998 ____________________________________ Officer (Principal K. RUPERT MURDOCH Executive Officer) and Director * Chief Financial Officer November 4, 1998 ____________________________________ (Principal Financial and DAVID F. DEVOE Accounting Officer) and Director /s/ Arthur M. Siskind Director November 4, 1998 ____________________________________ ARTHUR M. SISKIND * Director November 4, 1998 ____________________________________ PETER CHERNIN * Director November 4, 1998 ____________________________________ CHASE CAREY
/s/ Arthur M. Siskind *By: _____________________ AS ATTORNEY-IN-FACT II-1 EXHIBIT INDEX
PAGE NUMBER EXHIBIT NO. IN IN DOCUMENT SEQUENTIALLY EXHIBIT INCORPORATED NUMBERED NO. DESCRIPTION BY REFERENCE DOCUMENT ------- ----------- ------------ ------------ 1.1 Form of the U.S. Purchase Agreement 1.2 Form of International Purchase Agree- ment 3.1 Form of Restated Certificate of In- corporation of the Company 3.2 Form of By-Laws of the Company 4.1 Specimen Certificate for Shares of Class A Common Stock of the Company 5.1 Opinion of Squadron, Ellenoff, Plesent & Sheinfeld, LLP* 10.1 Indenture, dated as of January 28, 1993, by and among News America Hold- ings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with respect to senior debt securities 2(/1/) 10.2 First Supplemental Indenture, dated as of March 24, 1993, by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with re- spect to senior debt securities 2(/2/) 10.3 Second Supplemental Indenture, dated as of April 8, 1993, by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with re- spect to senior debt securities 3(/2/) 10.4 Third Supplemental Indenture, dated as of May 20, 1993, by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with respect to senior debt securities 4.7(/3/) 10.5 Fourth Supplemental Indenture, dated as of May 28, 1993, by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with respect to senior debt securities 4.8(/3/) 10.6 Fifth Supplemental Indenture, dated as of July 21, 1993, by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with re- spect to senior debt securities 4.6(/4/) 10.7 Form of Sixth Supplemental Indenture, dated as of January 25, 1994, by and among News America Holdings Incorpo- rated, the guarantors named therein and State Street Bank and Trust Com- pany (as successor to The First Na- tional Bank of Boston), as Trustee, with respect to senior debt securi- ties 4.7(/5/)
PAGE NUMBER EXHIBIT NO. IN IN DOCUMENT SEQUENTIALLY EXHIBIT INCORPORATED NUMBERED NO. DESCRIPTION BY REFERENCE DOCUMENT ------- ----------- ------------ ------------ 10.8 Form of Seventh Supplemental Indenture, dated as of February 4, 1994, by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with respect to senior debt securities 4.8(/6/) 10.9 Form of Eight Supplemental Indenture, dated as of May 12, 1994, by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with respect to senior debt securities 4.9(/6/) 10.11 Form of Ninth Supplemental Indenture, dated as of July 27, 1995 by and among News America Holdings Incorporated, the guarantors named therein and State Street Bank and Trust Company (as successor to The First National Bank of Boston), as Trustee, with respect to senior debt securities 4.10(/7/) 10.12 Form of Indenture, dated as of March 11, 1993 by and among News America Holdings Incorporated, the Guarantors named therein and The Bank of New York, as Trustee with respect to the Liquid Yield Option(TM) Notes ("LYONs") due March 11, 2013 4.1(/8/) 10.13 First Supplemental Indenture, dated as of May 20, 1993, among News America Holdings Incorporated, the guarantors named therein and The Bank of New York, as Trustee, with respect to the LYONs 4.2(/9/) 10.14 Second Supplemental Indenture, dated as of July 21, 1993, among News America Holdings, the guarantors named therein and The Bank of New York, as Trustee, with respect to the LYONs 4.3(/9/) 10.15 Form of Amended and Restated Indenture, dated as of March 24, 1993, by and among News America Holdings Incorporated, the guarantors named therein and The Bank of New York, as Trustee, with respect to senior debt securities 4.1(/10/) 10.16 First Supplemental Indenture, dated as of May 20, 1993, by and among News America Holdings Incorporated, the guarantors named therein and The Bank of New York, as Trustee, with respect to senior debt securities 4.2(/3/) 10.17 Second Supplemental Indenture, dated as of May 28, 1993, by and among News America Holdings Incorporated, the guarantors named therein and The Bank of New York, as Trustee, with respect to senior debt securities 4.3(/3/) 10.18 Third Supplemental Indenture, dated as of July 21, 1993, by and among News America Holdings Incorporated, the guarantors named therein and The Bank of New York, as Trustee, with respect to senior debt securities 4.14(/11/) 10.19 Fourth Supplemental Indenture, dated as of October 20, 1995, by and among News America Holdings Incorporated, the guarantors named therein and The Bank of New York, as Trustee, with respect to the senior debt securities 4.15(/11/)
PAGE NUMBER EXHIBIT NO. IN IN DOCUMENT SEQUENTIALLY EXHIBIT INCORPORATED NUMBERED NO. DESCRIPTION BY REFERENCE DOCUMENT ------- ----------- ------------ ------------ 10.20 Fifth Supplemental Indenture, dated as of January 8, 1998, by and among News America Incorporated, the guar- antors named therein and The Bank of New York, as Trustee, with respect to the senior debt securities 4.6(/12/) 10.21 Composite Revolving Credit Agree- ment, dated as of May 19, 1993 (in- cluding amendments dated August 9, 1993, September 14, 1993, May 12, 1994, March 30, 1995, February 29, 1996 and December 20, 1996) among News America Incorporated et al, several agents, managers and banks 10.22 Indenture for the 5% Subordinated Discount Debentures, dated as of No- vember 12, 1996, among News America Holdings Incorporated, The News Cor- poration Limited, each of the Sub- sidiary Guarantors named therein and The Bank of New York, as Trustee 4(i)(/13/) 10.23 Funding Agreement, dated as of June 11, 1997 by and among The News Corporation Limited, News Publishing Australia Limited and Fox Kids Worldwide, Inc. 10.33(/14/) 10.24 Amended and Restated Strategic Stockholders Agreement, dated as of August 1, 1997, by and among Haim Saban, certain entities listed on Schedule A thereto, Fox Broadcasting Company, Fox Broadcasting Sub, Inc. and Allen & Company Incorporated 10.1(/14/) 10.25 Agreement Regarding Ownership Interests, dated April 29, 1996, by and among Liberty Media Corporation, News America Holdings Incorporated, Fox Regional Sports Holdings, Inc., LMC Newco U.S., Inc., and Liberty/Fox Sports Financing LLC 10.1(/15/) 10.26 First Amended and Restated Agreement Regarding Ownership Interests, dated as of December 15, 1997, by and among Liberty Media Corporation, News America Holdings Incorporated, Fox Regional Sports Holdings, Inc., LMC Newco U.S. Inc., and Liberty/Fox Sports Financing LLC 10.1(b)(/16/) 10.27 Operating Agreement of Fox/Liberty Networks, LLC (f/k/a Liberty/Fox U.S. Sports LLC), dated April 29, 1996, by and among LMC Newco U.S., Inc., Fox Regional Sports Holdings, Inc. and Liberty/Fox Sports Financing LLC 10.4(/15/) 10.28 First Amended and Restated Operating Agreement of Fox/Liberty Networks, LLC, dated December 15, 1997 by and among LMC Newco U.S., Inc., Fox Regional Sports Holdings, Inc. and Liberty/Fox Sports Financing LLC 10.4(b)(/16/) 10.29 Form of Master Intercompany Agreement between the Company and The News Corporation Limited 10.30(a) Intercompany Note of Twentieth Century Fox Film Corporation to FEG Holdings, Inc.* 10.30(b) Intercompany Note of the Company to FEG Holdings, Inc.* 10.31 Form of Tax Sharing Agreement between the Company and News Publishing Australia Limited
PAGE NUMBER EXHIBIT NO. IN IN DOCUMENT SEQUENTIALLY EXHIBIT INCORPORATED NUMBERED NO. DESCRIPTION BY REFERENCE DOCUMENT ------- ----------- ------------ ------------ 10.32 Amendment No. 7, dated as of June 8, 1998, to the Revolving Credit Agreement dated as of May 19, 1993 (as amended on August 9, 1993, September 14, 1993, May 12, 1994, March 30, 1995, February 29, 1996 and December 20, 1996) among News America Incorporated et al, several agents, managers and banks 10.33 Amended and Restated Indenture, as amended and restated as of September 30, 1994, between NWCG Holdings Corporation and Nationsbank of Georgia, National Association, as Trustee, with respect to the Senior Secured Discount Notes Due 1999 4.1A(/17/) 21.1 List of Principal Subsidiaries of the Company 23.1 Consent of Arthur Andersen LLP+ 23.2 Consent of Ernst & Young LLP+ 23.3 Consent of Squadron, Ellenoff, Plesent & Sheinfeld, LLP (to be con- tained in the Opinion filed as Ex- hibit 5.1)* 24.1 Power of Attorney+ 27 Financial Data Schedule+
- -------- * To be filed by amendment. + Previously filed. (1) Incorporated by reference to the Report on Form 6-K of The News Corporation Limited, dated January 28, 1993. (2) Incorporated by reference to the Report on Form 6-K of The News Corporation Limited, dated April 26, 1993. (3) Incorporated by reference to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33-63604) and Post- Effective Amendment No. 1 to the Registration Statement on Form F-3 of the News America Holdings Incorporated (Registration No. 33-59688) filed with the Securities and Exchange Commission on May 28, 1993. (4) Incorporated by reference to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33-74574) filed with the Securities and Exchange Commission on January 28, 1994. (5) Incorporated by reference to Amendment No. 1 to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33- 74574) filed with the Securities and Exchange Commission on February 4, 1994. (6) Incorporated by reference to Amendment No. 1 to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33- 79334) filed with the Securities and Exchange Commission on June 14, 1994. (7) Incorporated by reference to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33-94868) filed with the Securities and Exchange Commission on July 24, 1995. (8) Incorporated by reference to Pre-Effective Amendment No. 2 to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33-62008) filed with the Securities and Exchange Commission on August 18, 1993. (9) Incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33-62008) and Post-Effective Amendment No. 2 to the Registration Statement on Form F-3 of News America Holdings Incorporated (Registration No. 33-81272) filed with the Securities and Exchange Commission on July 21, 1994. (10) Incorporated by reference to the Registration Statement of The News Corporation Limited on Form F-3 (Registration No. 33-67008) filed with the Securities and Exchange Commission on May 4, 1993. (11) Incorporated by reference to Amendment No. 1 to the Registration Statement of News America Holdings Incorporated on Form F-3 (Registration No. 33-98238) filed with the Securities and Exchange Commission on October 23, 1995. (12) Incorporated by reference to the Registration Statement of News America Incorporated on Form F-4 (Registration No. 333-8744) filed with the Securities and Exchange Commission on May 12, 1998. (13) Incorporated by reference to the Registration Statement on Form F-3 of The News Corporation Limited (Registration No. 333-6896) filed with the Securities and Exchange Commission on January 26, 1998. (14) Incorporated by reference to Amendment No. 1 to the Registration Statement on Form S-1 of Fox Kids Worldwide, Inc. (Registration No. 333-12995) filed with the Securities and Exchange Commission on January 26, 1998. (15) Incorporated by reference to the Registration Statement of Fox/Liberty Networks, LLC on Form S-4 (Registration No. 333-38689) filed with the Securities and Exchange Commission on October 24, 1997. (16) Incorporated by reference to Amendment No. 2 to Registration Statement of Fox/Liberty Networks, LLC and FLN Finance, Inc. on Form S-4 (Registration No. 333-38689) filed with the Securities and Exchange Commission on December 18, 1997. (17) Incorporated by reference to Amendment No. 1 to the Registration Statement of NWCG Holdings Corporation on Form S-1 (Registration No. 33-82274) filed with the Securities and Exchange Commission on October 18, 1994. EX-1.1 2 FORM OF THE U.S. PURCHASE AGREEMENT EXHIBIT 1.1 ================================================================================ FOX ENTERTAINMENT GROUP, INC. (a Delaware corporation) 72,250,000 Shares of Class A Common Stock U.S. PURCHASE AGREEMENT Dated: November __, 1998 ================================================================================ Table of Contents
Page ---- SECTION 1. Representations and Warranties..................................................4 (a) Representations and Warranties by the Company.............................4 (i) Compliance with Registration Requirements...................4 (ii) Independent Accountants.....................................6 (iii) Financial Statements........................................6 (iv) No Material Adverse Change in Business......................6 (v) Good Standing of the Company................................7 (vi) Good Standing of Subsidiaries...............................7 (vii) Capitalization..............................................8 (viii) Authorization of Agreement..................................8 (ix) Authorization and Description of Securities.................8 (x) Absence of Defaults and Conflicts...........................8 (xi) Absence of Labor Dispute....................................9 (xiv) Intercompany Agreements.....................................9 (xv) Absence of Proceedings.....................................10 (xvi) Accuracy of Exhibits.......................................10 (xvii) Possession of Intellectual Property........................10 (xviii) Absence of Further Requirements............................11 (xix) Possession of Licenses and Permits.........................11 (xx) Title to Property .........................................11 (xxi) Tax Returns and Payments of Taxes..........................12 (xxii) Investment Company Act.....................................12 (xxiii) Environmental Laws.........................................12 (xxiv) Insurance .................................................13 (xxv) Registration Rights........................................13 (xxvi) No Stabilization or Manipulation...........................13 (b) Officer Certificates.....................................................13 SECTION 2. Sale and Delivery to International Managers; Closing...........................14 (a) Initial Securities.......................................................14 (b) Option Securities........................................................14 (c) Payment .................................................................14 (d) Denominations; Registration..............................................15
i Page ---- SECTION 3. Covenants of the Company.......................................................15 (a) Compliance with Securities Regulations and Commission Requests.................................................................15 (b) Filing of Amendments ...................................................16 (c) Delivery of Registration Statements......................................16 (d) Delivery of Prospectuses.................................................16 (e) Continued Compliance with Securities Laws................................17 (f) Blue Sky Qualifications..................................................17 (g) Rule 158 ................................................................18 (h) Use of Proceeds..........................................................18 (i) Listing..................................................................18 (j) Restriction on Sale of Securities........................................18 (k) Reporting Requirements...................................................18 (l) Compliance with NASD Rules...............................................19 (m) Compliance with Rule 463.................................................19 SECTION 4. Payment of Expenses............................................................19 (a) Expenses.................................................................19 (b) Termination of Agreement.................................................20 SECTION 5. Conditions of International Managers' Obligations...............................20 (a) Effectiveness of Registration Statement...................................20 (b) Opinion of Counsel for Company............................................20 (c) Opinion of Regulatory Counsel for Company.................................21 (d) Opinion of Counsel for International Managers.............................21 (e) Officers' Certificate.....................................................21 (f) Accountant's Comfort Letter...............................................22 (g) Bring-down Comfort Letter.................................................22 (h) Approval of Listing.......................................................22 (i) No Objection.............................................................22 (j) Lock-up Agreements........................................................22 (k) Purchase of Initial U.S. Securities.......................................22 (l) Recapitalization and Reorganization.......................................23 (m) Conditions to Purchase of International Option Securities.........................................................23 (n) Additional Documents......................................................24 (o) Termination of Agreement..................................................24 SECTION 6. Indemnification.................................................................24 (a) Indemnification of International Managers.................................24 (b) Indemnification of Company, Directors and Officers........................26 (c) Actions against Parties; Notification.....................................26 (d) Settlement without Consent if Failure to Reimburse........................27 (e) Indemnification for Reserved Securities...................................27
ii
Page ---- SECTION 7. Contribution....................................................................27 SECTION 8. Representations, Warranties and Agreements to Survive Delivery.......................................................................29 SECTION 9. Termination of Agreement........................................................29 (a) Termination; General......................................................29 (b) Liabilities...............................................................29 SECTION 10. Default by One or More of the International Managers............................30 SECTION 11. Notices.........................................................................30 SECTION 12. Parties.........................................................................31 SECTION 13. GOVERNING LAW AND TIME..........................................................31 SECTION 14. Effect of Headings..............................................................31
iii FOX ENTERTAINMENT GROUP, INC. (a Delaware corporation) 72,250,000 Shares of Class A Common Stock (Par Value $0.01 Per Share) U.S. PURCHASE AGREEMENT ----------------------- November _, 1998 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS & CO. MORGAN STANLEY & CO. INCORPORATED BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION J.P. MORGAN SECURITIES INC. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON SMITH BARNEY INC. as Representatives of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Ladies and Gentlemen: Fox Entertainment Group, Inc., a Delaware corporation (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (together, "Merrill Lynch") and each of the other U.S. Underwriters named in Schedule A hereto (collectively, the "U.S. Underwriters," which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Allen & Company Incorporated, Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette Securities Corporation, J.P. Morgan Securities Inc., NationsBanc Montgomery Securities LLC, and Salomon Smith Barney Inc. are acting as representatives (in such capacity, the "U.S. Representatives"), with respect to the issue and sale by the Company and the purchase by the U.S. Underwriters, acting severally and not jointly, of the respective number of shares of Class A Common Stock, par value $0.01 per share, of the Company (the "Class A Common Stock" and, together with the Class B Common Stock, par value $0.01 per share, of the Company, the "Common Stock") set forth in said Schedule A, and with respect to the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 10,625,000 additional shares of Class A Common Stock solely to cover over-allotments, if any. The aforesaid 72,250,000 shares of Class A Common Stock (the "Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or any part of the 10,625,000 shares of Class A Common Stock subject to the option described in Section 2(b) hereof (the "U.S. Option Securities") are hereinafter called, collectively, the "U.S. Securities." It is understood that the Company is concurrently entering into an agreement dated the date hereof (the "International Purchase Agreement") providing for the offering by the Company of an aggregate of 12,750,000 shares of Class A Common Stock (the "Initial International Securities") through arrangements with certain underwriters outside the United States and Canada (the "International Managers") for which Merrill Lynch International, Allen & Company Incorporated, Goldman Sachs International, Morgan Stanley & Co. International Limited, Bear, Stearns International Limited, Donaldson, Lufkin & Jenrette International, J.P. Morgan Securities Ltd., NationsBanc Montgomery Securities LLC and Salomon Brothers International Limited are acting as lead managers (the "Lead Managers") and the grant by the Company to the International Managers, acting severally and not jointly, of an option to purchase all or any part of the International Managers' pro rata portion of up to 1,875,000 additional shares of Class A Common Stock solely to cover overallotments, if any (the "International Option Securities" and, together with the U.S. Option Securities, the "Option Securities"). The Initial International Securities and the International Option Securities are hereinafter called the "International Securities." It is understood that the Company is not obligated to sell and the U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities unless all of the Initial International Securities are contemporaneously purchased by the International Managers. The U.S. Underwriters and the International Managers are hereinafter collectively called the "Underwriters," the Initial U.S. Securities and the Initial International Securities are hereinafter collectively called the "Initial Securities," 2 and the U.S. Securities and the International Securities are hereinafter collectively called the "Securities." The Underwriters will concurrently enter into an Intersyndicate Agreement of even date herewith (the "Intersyndicate Agreement") providing for the coordination of certain transactions among the Underwriters under the direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in such capacity, the "Global Coordinator"). The Company understands that the U.S. Underwriters propose to make a public offering of the U.S. Securities as soon as the U.S. Representatives deem advisable after this Agreement has been executed and delivered. The Company and the U.S. Underwriters agree that up to_________ shares of the Initial U.S. Securities to be purchased by the U.S. Underwriters ( the "Reserved Securities") shall be reserved for sale by the Underwriters to certain eligible employees of The News Corporation Limited, the Company and their respective subsidiaries and certain persons having business relationships with the Company ("Reserved Securities Participants"), as part of the distribution of the Securities by the Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and interpretations of the National Association of Securities Dealers, Inc. and all other applicable laws, rules and regulations. To the extent that such Reserved Securities are not orally confirmed for purchase by such eligible employees and persons having business relationships with the Company by the end of the first business day after the date of this Agreement, such Reserved Securities may be offered to the public as part of the public offering contemplated hereby. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-1 (No. 333-61515) covering the registration of the Securities under the Securities Act of 1933, as amended (the "1933 Act"), including the related preliminary prospectus or prospectuses. Promptly after execution and delivery of this Agreement, the Company will either (i) prepare and file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to be used in connection with the offering and sale of the Securities: one relating to the U.S. Securities (the "Form of U.S. Prospectus") and one relating to the International Securities (the "Form of International Prospectus"). The Form of International Prospectus is identical to the Form of U.S. Prospectus, except for the front cover and back cover pages and the 3 information under the caption "Underwriting." The information included in any such prospectus or in any such Term Sheet, as the case may be, that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each Form of U.S. Prospectus and Form of International Prospectus used before such registration statement became effective, and any prospectus that omitted, as applicable, the Rule 430A Information or Rule 434 Information, that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a "preliminary prospectus." Such registration statement, including the exhibits thereto and schedules thereto at the time it became effective and including the Rule 430A Information and the Rule 434 Information, as applicable, is herein called the "Registration Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b) Registration Statement," and after such filing the term "Registration Statement" shall include the Rule 462(b) Registration Statement. The final Form of U.S. Prospectus and the final Form of International Prospectus in the forms first furnished to the Underwriters for use in connection with the offering of the Securities are herein called the "U.S. Prospectus" and the "International Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is relied on, the terms "U.S. Prospectus" and "International Prospectus" shall refer to the preliminary U.S. Prospectus dated October 20, 1998 and preliminary International Prospectus dated October 20, 1998, respectively, each together with the applicable Term Sheet and all references in this Agreement to the date of such Prospectuses shall mean the date of the applicable Term Sheet. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). SECTION 1. Representations and Warranties. (a) Representations and Warranties by the Company. The Company represents and warrants to each U.S. Underwriter as of the date hereof and as of the Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in Section 2(b) hereof and agrees with each U.S. Underwriter as follows: (i) Compliance with Registration Requirements. Each of the Registration ----------------------------------------- Statement and any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration 4 Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information from the Company has been satisfied in all material respects. At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective and at the Closing Time (and, if any U.S. Option Securities are purchased, at the Date of Delivery), the Registration Statement, any Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectuses, any preliminary prospectuses and any supplement thereto or prospectus wrapper prepared in connection therewith, at their respective times of issuance and at the Closing Time, complied and will comply in all material respects with any applicable laws or regulations of foreign jurisdictions in which the Prospectuses and such preliminary prospectuses, as amended or supplemented, if applicable, are distributed in connection with the offer and sale of Reserved Securities. Neither of the Prospectuses nor any amendments or supplements thereto (including any prospectus wrapper), at the time the Prospectuses or any amendments or supplements thereto were issued and at the Closing Time (and, if any U.S. Option Securities are purchased, at the Date of Delivery), included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If Rule 434 is used, the Company will comply with the requirements of Rule 434 and the Prospectuses shall not be "materially different," as such term is used in Rule 434, from the prospectuses included in the Registration Statement at the time it became effective. The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or the U.S. Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any U.S. Underwriter through the U.S. Representatives expressly for use in the Registration Statement or the U.S. Prospectus. Each preliminary prospectus and the prospectuses filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectuses delivered to the Underwriters 5 for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. The Company has filed a registration statement pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the "1934 Act"), to register the Class A Common Stock, and such registration statement has been declared effective. (ii) Independent Accountants. The accountants who certified the financial ----------------------- statements and supporting schedules included in the Registration Statement are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iii) Financial Statements. The combined financial statements included in -------------------- the Registration Statement and the Prospectuses, together with the related schedules and notes, present fairly the financial position of the Company, its subsidiaries and the predecessor entities to the Company at the dates indicated and the combined statement of operations, shareholders' equity and cash flows of the Company, its subsidiaries and the predecessor entities to the Company for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectuses present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. The pro forma financial statements of the Company and its subsidiaries and the related notes thereto included in the Registration Statement and the Prospectuses present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. (iv) No Material Adverse Change in Business. Since the respective dates as -------------------------------------- of which information is given in the Registration Statement and the Prospectuses, except as otherwise stated therein or contemplated thereby, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries (as defined in 6 Regulation S-X) (each a "Subsidiary" and, collectively, the "Subsidiaries") considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its Subsidiaries which are material to the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (v) Good Standing of the Company. The Company has been duly organized and ---------------------------- is validly existing as a corporation in good standing under the laws of the State of Delaware and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (vi) Good Standing of Subsidiaries. Each of the Subsidiaries has been duly ----------------------------- organized and is validly existing as a limited liability company, corporation, limited partnership or general partnership in good standing under the laws of the jurisdiction of its organization, has the requisite power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and is duly qualified as a foreign limited liability company, corporation, limited partnership or general partnership to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise described in the Registration Statement, all of the issued and outstanding capital stock of each Subsidiary that is a corporation has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock, limited liability company interests or partnership interests of any of the Subsidiaries was issued in violation of any preemptive or similar rights arising by operation of law, or under the charter, by-laws, certificate of formation, limited liability company agreement, partnership agreement, or 7 other organizational documents of any Subsidiary or under any agreement to which the Company or any Subsidiary is a party. (vii) Capitalization. The authorized, issued and outstanding capital -------------- stock of the Company is as set forth in the Prospectuses in the column entitled "Pro Forma" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectuses or pursuant to the exercise of convertible securities or options referred to in the Prospectuses). The shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. (viii) Authorization of Agreement. This Agreement and the International -------------------------- Purchase Agreement have been duly authorized, executed and delivered by the Company. (ix) Authorization and Description of Securities. The Securities to be ------------------------------------------- purchased by the U.S. Underwriters and the International Managers from the Company have been duly authorized for issuance and sale to the U.S. Underwriters pursuant to this Agreement and to the International Managers pursuant to the International Purchase Agreement, respectively, and, when issued and delivered by the Company pursuant to this Agreement and the International Purchase Agreement, respectively, against payment of the consideration set forth herein and the International Purchase Agreement, respectively, will be validly issued, fully paid and non-assessable; the Common Stock conforms to all statements relating thereto contained in the Prospectuses and such description conforms to the rights set forth in the instruments defining the same; no holder of the Securities will be subject to personal liability by reason of being such a holder; and the issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. (x) Absence of Defaults and Conflicts. Neither the Company nor any of --------------------------------- its Subsidiaries is in violation of its charter, by-laws, certificate of formation, limited liability company agreement, partnership agreement, or other organizational documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or 8 any of its Subsidiaries is subject (collectively, "Agreements and Instruments") except for such violations and defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement and the International Purchase Agreement and the consummation of the transactions contemplated in this Agreement, the International Purchase Agreement and in the Registration Statement (including the Recapitalization (as defined in the Prospectuses), the Reorganization (as defined in the Prospectuses), the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectuses under the caption "Use of Proceeds") and compliance by the Company with its obligations under this Agreement and the International Purchase Agreement have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries pursuant to, the Agreements and Instruments (except for such conflicts, breaches or defaults or liens, charges or encumbrances that, singly or in the aggregate, would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter, by-laws, certificate of formation, limited liability company agreement, partnership agreement, or other organizational documents of the Company or any of its Subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its Subsidiaries or any of their assets, properties or operations. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its Subsidiaries. (xi) Absence of Labor Dispute. Except as disclosed in the Prospectus, no ------------------------ labor dispute with the employees of the Company or any Subsidiary exists or, to the knowledge of the Company, none are imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any Subsidiary's principal suppliers, manufacturers, customers or contractors, which, in either case, may reasonably be expected to result in a Material Adverse Effect. (xii) Intercompany Agreements. Each of the Master Intercompany Agreement ----------------------- and the Tax Sharing Agreement (each as defined in the Prospectuses) has been duly authorized, executed and delivered by 9 the Company and its Subsidiaries, as applicable, and constitutes the binding agreement of such party, enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (xiii) Absence of Proceedings. There is no action, suit, proceeding, ---------------------- inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign (including, but not limited to the Federal Communications Commission ("FCC")), now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any Subsidiary which is required to be disclosed in the Registration Statement (other than as disclosed therein), or which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the consummation of the transactions contemplated in this Agreement and the International Purchase Agreement or the performance by the Company of its obligations hereunder or thereunder; the aggregate of all pending legal or governmental proceedings to which the Company or any Subsidiary is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect. (xiv) Accuracy of Exhibits. There are no contracts or documents which are -------------------- required to be described in the Registration Statement or the Prospectuses or to be filed as exhibits thereto which have not been so described and filed as required. (xv) Possession of Intellectual Property. Except as disclosed in the ----------------------------------- Prospectus, the Company and its Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them as described in the Prospectus, and neither the Company nor any of its Subsidiaries has received any written notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its 10 Subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect. (xvi) Absence of Further Requirements. No filing with, or authorization, ------------------------------- approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities under this Agreement and the International Purchase Agreement or the consummation of the transactions contemplated by this Agreement and the International Purchase Agreement, except (i) such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations and foreign or state securities or blue sky laws, (ii) such as have been already obtained or may be required under the Communications Act of 1934, as amended and (iii) such as have been obtained under the laws and regulations of jurisdictions outside the United States in which the Reserved Securities are offered. (xvii) Possession of Licenses and Permits. The Company and its ---------------------------------- Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies (including, without limitation, the FCC) necessary to conduct the businesses now operated by them, except where the failure to possess Governmental Licenses would not, singly or in the aggregate, have a Material Adverse Effect; the Company and its Subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, for the maximum license term customarily issued, with no material conditions, restrictions or qualifications, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and neither the Company nor any of its Subsidiaries has received any notice of proceedings relating to the revocation, modification, non-renewal or suspension of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. (xviii) Title to Property. The Company and its Subsidiaries have good ----------------- and marketable title to all real property owned by the Company and its Subsidiaries and good title to all other properties owned by them, in 11 each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (a) are described in the Prospectuses or (b) would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect; and all of the leases and subleases material to the business of the Company and its Subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Prospectuses, are in full force and effect, and neither the Company nor any of its Subsidiaries has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its Subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of such the Company or any Subsidiary thereof to the continued possession of the leased or subleased premises under any such lease or sublease. (xix) Tax Returns and Payment of Taxes. The Company and its Subsidiaries -------------------------------- have timely filed all federal, state, local and foreign tax returns that are required to be filed or have duly requested extensions thereof and all such tax returns are true, correct and complete. The Company and its Subsidiaries have timely paid all taxes required to be paid by any of them and any related assessments, fines or penalties, except for any such tax, assessment, fine or penalty that is being contested in good faith and by appropriate proceedings; and adequate charges, accruals and reserves have been provided for in the financial statements referred to in Section 1(a)(iii) above in respect of all federal, state, local and foreign taxes for all periods as to which the tax liability of the Company or any of its Subsidiaries has not been finally determined or remains open to examination by applicable taxing authorities. The Company is not a "United States real property holding corporation" within the meaning of Section 897(c)(3) of the Internal Revenue Code of 1986, as amended. (xx) Investment Company Act. The Company is not, and upon the issuance ---------------------- and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectuses will not be, an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act"). (xxi) Environmental Laws. Except as described in the Registration ------------------ Statement and except such matters as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, 12 including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and its Subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its Subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its Subsidiaries relating to Hazardous Materials or Environmental Laws. (xxii) Insurance. The Company and each of its Subsidiaries is insured by --------- insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they will be engaged; and neither the Company nor any of its Subsidiaries has any reason to believe that any of them will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business. (xxiii) Registration Rights. There are no persons with registration ------------------- rights or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the 1933 Act. (xxiv) No Stabilization or Manipulation. The Company has not taken and -------------------------------- will not take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Securities in violation of Regulation M under the 1934 Act. (b) Officer Certificates. Any certificate signed by any officer of the Company or any of its Subsidiaries delivered to the Global Coordinator, the U.S. 13 Representatives or to counsel for the U.S. Underwriters shall be deemed a representation and warranty by the Company to each U.S. Underwriter as to the matters covered thereby. SECTION 2. Sale and Delivery to U.S. Underwriters; Closing. ----------------------------------------------- (a) Initial Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each U.S. Underwriter, severally and not jointly, and each U.S. Underwriter, severally and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule B, the number of Initial U.S. Securities set forth in Schedule A opposite the name of such U.S. Underwriter, plus any additional number of Initial U.S. Securities which such U.S. Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof. (b) Option Securities. In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the U.S. Underwriters, severally and not jointly, to purchase up to an additional 10,625,000 shares of Common Stock at the price per share set forth in Schedule B, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial U.S. Securities but not payable on the U.S. Option Securities. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial U.S. Securities upon notice by the Global Coordinator to the Company setting forth the number of U.S. Option Securities as to which the several U.S. Underwriters are then exercising the option and the time and date of payment and delivery for such U.S. Option Securities. Any such time and date of delivery for the U.S. Option Securities (a "Date of Delivery") shall be determined by the Global Coordinator, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of the U.S. Option Securities, each of the U.S. Underwriters, acting severally and not jointly, will purchase that proportion of the total number of U.S. Option Securities then being purchased which the number of Initial U.S. Securities set forth in Schedule A opposite the name of such U.S. Underwriter bears to the total number of Initial U.S. Securities, subject in each case to such adjustments as the Global Coordinator in its discretion shall make to eliminate any sales or purchases of fractional shares. (c) Payment. Payment of the purchase price for, and delivery of certificates for, the Initial Securities shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York, or at such other place as shall be agreed upon by the Global Coordinator and the 14 Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 p.m. (Eastern time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Global Coordinator and the Company (such time and date of payment and delivery being herein called the "Closing Time"). In addition, in the event that any or all of the U.S. Option Securities are purchased by the U.S. Underwriters, payment of the purchase price for, and delivery of certificates for, such U.S. Option Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Global Coordinator and the Company, on each Date of Delivery as specified in the notice from the Global Coordinator to the Company. Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the U.S. Representatives for the respective accounts of the U.S. Underwriters of certificates for the U.S. Securities to be purchased by them. It is understood that each U.S. Underwriter has authorized the U.S. Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial U.S. Securities and the U.S. Option Securities, if any, which it has agreed to purchase. Merrill Lynch, individually and not as representative of the U.S. Underwriters may (but shall not be obligated to) make payment of the purchase price for the Initial U.S. Securities or the U.S. Option Securities, if any, to be purchased by any U.S. Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such U.S. Underwriter from its obligations hereunder. (d) Denominations; Registration. Certificates for the Initial U.S. Securities and the U.S. Option Securities, if any, shall be in such denominations and registered in such names as the U.S. Representatives may request in writing at least one full business day before the Closing Time or the relevant Date of Delivery, as the case may be. The certificates for the Initial U.S. Securities and the U.S. Option Securities, if any, will be made available for examination and packaging by the U.S. Representatives in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be. SECTION 3. Covenants of the Company. The Company covenants with each U.S. ------------------------ Underwriter as follows: (a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements of Rule 430A or Rule 434, as applicable, and will notify the Global Coordinator 15 immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectuses or any amended Prospectuses shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectuses or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) Filing of Amendments. The Company will give the Global Coordinator notice of its intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectuses, will furnish the Global Coordinator with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Global Coordinator or counsel for the U.S. Underwriters shall reasonably object, except as the Company may reasonably determine is necessary to comply with applicable laws. (c) Delivery of Registration Statements. The Company has furnished or will deliver to the U.S. Representatives and counsel for the U.S. Underwriters, without charge, copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the U.S. Representatives, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the U.S. Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the U.S. Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (d) Delivery of Prospectuses. The Company has delivered to each U.S. Underwriter, without charge, as many copies of each preliminary prospectus as 16 such U.S. Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each U.S. Underwriter, without charge, during the period when the U.S. Prospectus is required to be delivered under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of the U.S. Prospectus (as amended or supplemented) as such U.S. Underwriter may reasonably request. The U.S. Prospectus and any amendments or supplements thereto furnished to the U.S. Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement, the International Purchase Agreement and in the Prospectuses. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the U.S. Underwriters or for the Company, to amend the Registration Statement or amend or supplement any Prospectus in order that the Prospectuses will not include any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement any Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectuses comply with such requirements, and the Company will furnish to the U.S. Underwriters such number of copies of such amendment or supplement as the U.S. Underwriters may reasonably request. The Underwriters shall notify the Company upon their completion of the distribution of the Securities as contemplated by this Agreement, the International Purchase Agreement and in the Prospectuses. (f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the U.S. Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Global Coordinator may designate and to maintain such qualifications in effect for a period of not less than one year from the later of the effective date of the Registration Statement and any Rule 462(b) Registration Statement; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject 17 itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement and any Rule 462(b) Registration Statement. (g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act. (h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectuses under "Use of Proceeds". (i) Listing. The Company will use its best efforts to effect the listing of the Class A Common Stock (including the Securities) on the New York Stock Exchange. (j) Restriction on Sale of Securities. During a period of 180 days from the date of the Prospectuses, the Company will not, without the prior written consent of the Global Coordinator, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder or under the International Purchase Agreement or (B) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to existing employee benefit plans of the Company referred to in the Prospectuses. (k) Reporting Requirements. The Company, during the period when the Prospectuses are required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the rules and regulations of the Commission thereunder. 18 (l) Compliance with NASD Rules. The Company hereby agrees that it will ensure that the Reserved Securities will be restricted as required by the National Association of Securities Dealers, Inc. (the "NASD") under NASD Rule 2110(d) from sale, transfer, assignment, pledge or hypothecation for a period of three months following the date of this Agreement. The Underwriters will notify the Company as to which persons will need to be so restricted. At the request of the Underwriters, the Company will direct the transfer agent to place a stop transfer restriction upon such securities for such period of time. Should the Company release, or seek to release, from such restrictions any of the Reserved Securities, the Company agrees to reimburse the Underwriters for any reasonable expenses (including, without limitation, legal expenses) they incur in connection with such release. (m) Compliance with Rule 463. The Company will file with the Commission such information regarding the use of the net proceeds of the Offering as may be required pursuant to Rule 463 of the 1933 Act Regulations. SECTION 4. Payment of Expenses. ------------------- (a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among Underwriters and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters and the transfer of the Securities between the U.S. Underwriters and the International Managers, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheets and of the Prospectuses and any amendments or supplements thereto, (vii) the preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii) the transportation and other expenses incurred by the Company in connection with presentations to prospective purchasers of the Securities, (ix) the fees and expenses of any transfer agent or registrar for the Securities and (x) the filing fees incident to, and the fees and disbursements of counsel to the Underwriters in connection with, the review by the NASD of the 19 terms of the sale of the Securities, (xi) the fees and expenses incurred in connection with the listing of the Securities on the New York Stock Exchange, and (xii) all reasonable costs and expenses of the Underwriters, including the reasonable fees and disbursements of counsel for the Underwriters, in connection with matters related to the Reserved Securities. (b) Termination of Agreement. If this Agreement is terminated by the U.S. Representatives in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the U.S. Underwriters. SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations -------------------------------------------- of the several U.S. Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company or any of its Subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: (a) Effectiveness of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the U.S. Underwriters. A prospectus containing the Rule 430A Information shall have been filed with the Commission in accordance with Rule 424(b) (or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall have been filed with the Commission in accordance with Rule 424(b). (b) Opinion of Counsel for Company. At the Closing Time, the U.S. Representatives shall have received the favorable opinion, dated as of the Closing Time, of Squadron, Ellenoff, Plesent & Sheinfeld, LLP, counsel for the Company, in form and substance satisfactory to counsel for the U.S. Underwriters, together with signed or reproduced copies of such letter for each of the other U.S. Underwriters to the effect set forth in Exhibit A hereto and to such further effect as counsel to the U.S. Underwriters may reasonably request. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the U.S. Representatives. Such counsel may also state that, insofar 20 as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its Subsidiaries and certificates of public officials. (c) Opinion of Regulatory Counsel for Company. At the Closing Time, the U.S. Representatives shall have received the favorable opinion, dated as of the Closing Time, of Hogan & Hartson L.L.P., special counsel for the Company, in form and substance satisfactory to counsel for the U.S. Underwriters, together with signed or reproduced copies of such letter for each of the other U.S. Underwriters to the effect set forth in Exhibit B hereto and to such further effect as counsel to the U.S. Underwriters may reasonably request. In giving such opinion, such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its Subsidiaries and certificates of public officials. (d) Opinion of Counsel for U.S. Underwriters. At the Closing Time, the U.S. Representatives shall have received the favorable opinion, dated as of the Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the U.S. Underwriters, together with signed or reproduced copies of such letter for each of the other U.S. Underwriters with respect to the matters set forth in (i), (v), (vi) (solely as to preemptive or other similar rights arising by operation of law or under the charter or bylaws of the Company), (viii) through (x), inclusive, (xiv) (solely as to the information in the Prospectuses under "Description of the Capital Stock -- Class A Common Stock and Class B Common Stock") and the penultimate paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the U.S. Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its Subsidiaries and certificates of public officials. (e) Officers' Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectuses, except as otherwise stated therein or contemplated thereby, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the U.S. Representatives shall have received a certificate of the President, Chief Executive Officer or a Senior Executive Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of 21 the Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions, set forth herein or contemplated hereby, on its part to be performed or satisfied at or prior to the Closing Time and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and to the knowledge of the Company, no proceedings for that purpose have been instituted or are pending or are contemplated by the Commission. (f) Accountant's Comfort Letters. At the time of the execution of this Agreement, the U.S. Representatives shall have received (i) from Arthur Andersen LLP a letter dated such date, in form and substance satisfactory to the U.S. Representatives, together with signed or reproduced copies of such letter for each of the other U.S. Underwriters containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectuses and (ii) from Ernst & Young LLP a letter dated such date, in form and substance satisfactory to the U.S. Representatives, together with signed or reproduced copies of such letter for each of the other U.S. Underwriters containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the NWCG Holdings Corporation financial statements and certain financial information contained in the Registration Statement and the Prospectuses. (g) Bring-down Comfort Letters. At the Closing Time, the Representatives shall have received from each of Arthur Andersen LLP and Ernst & Young LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time. (h) Approval of Listing. At Closing Time, the Securities shall have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance. (i) No Objection. The NASD shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements. (j) Lock-up Agreement. At the date of this Agreement, the U.S. Representatives shall have received an agreement substantially in the form of Exhibit C hereto signed by the persons listed on Schedule C hereto. (k) Purchase of Initial International Securities. Contemporaneously with the purchase by the U.S. Underwriters of the Initial U.S. Securities under this 22 Agreement, the International Managers shall have purchased the Initial International Securities under the International Purchase Agreement. (l) Recapitalization and Reorganization. Prior to Closing Time, the Company shall have effected the Recapitalization (as defined and described in the Prospectuses) and consummated the Reorganization (as defined and described in the Prospectuses). (m) Conditions to Purchase of U.S. Option Securities. In the event that the U.S. Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the U.S. Option Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company or any subsidiary of the Company hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the U.S. Representatives shall have received: (i) Officers' Certificate. A certificate, dated such Date of Delivery, of the President, Chief Executive Officer or a Senior Executive Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(e) hereof remains true and correct as of such Date of Delivery. (ii) Opinion of Counsel for Company. The favorable opinion of Squadron, Ellenoff, Plesent & Sheinfeld, LLP, counsel for the Company, in form and substance satisfactory to counsel for the U.S. Underwriters, dated such Date of Delivery, relating to the U.S. Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b) hereof. (iii) Opinion of Regulatory Counsel for Company. The favorable opinion of Hogan & Hartson L.L.P., special counsel for the Company, in form and substance satisfactory to counsel for the U.S. Underwriters, dated such Date of Delivery, relating to the U.S. Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(c) hereof. (iv) Opinion of Counsel for U.S. Underwriters. The favorable opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the U.S. Underwriters, dated such Date of Delivery, relating to the U.S. Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(d) hereof. 23 (v) Bring-down Comfort Letter. A letter from Arthur Andersen LLP, in form and substance satisfactory to the U.S. Representatives and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the U.S. Representatives pursuant to Section 5(g) hereof, except that the "specified date" in the letter furnished pursuant to this paragraph shall be a date not more than five days prior to such Date of Delivery. (n) Additional Documents. At the Closing Time and at each Date of Delivery, counsel for the U.S. Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the validity of the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the U.S. Representatives and counsel for the U.S. Underwriters. (o) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement or, in the case of any condition to the purchase of U.S. Option Securities on a Date of Delivery which is after the Closing Time, the obligations of the several U.S. Underwriters to purchase the relevant Option Securities may be terminated by the U.S. Representatives by notice to the Company at any time at or prior to the Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect. SECTION 6. Indemnification. --------------- (a) Indemnification of U.S. Underwriters. The Company agrees to indemnify and hold harmless each U.S. Underwriter and each person, if any, who controls any U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included 24 in any preliminary prospectus or the Prospectuses (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of (A) the violation of any applicable laws or regulations of foreign jurisdictions in connection with the offer and sale of the Reserved Securities and (B) any untrue statement or alleged untrue statement of a material fact included in the supplement or prospectus wrapper material distributed in [Insert Applicable Jurisdiction(s)] in connection with the reservation and sale of the Reserved Securities to eligible employees of, and persons having business relations with, the Company or the omission or alleged omission therefrom of a material fact necessary to make the statements therein, when considered in conjunction with the Prospectuses or preliminary prospectuses, not misleading; (iii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission or in connection with any violation of the nature referred to in Section 6(a)(ii)(A) hereof; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and (iv) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission or in connection with any violation of the nature referred to in Section 6(a)(ii)(A) hereof, to the extent that any such expense is not paid under (i), (ii) or (iii) above; provided, however, that this indemnity agreement shall not apply to any loss, - -------- ------- liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any U.S. Underwriter through the U.S. Representatives expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430A Information and 25 the Rule 434 Information, if applicable, or any preliminary prospectus or the U.S. Prospectus (or any amendment or supplement thereto). (b) Indemnification of Company, Directors and Officers. Each U.S. Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or any preliminary U.S. prospectus or the U.S. Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such U.S. Underwriter through the U.S. Representatives expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the U.S. Prospectus (or any amendment or supplement thereto). (c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each 26 indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(iii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. (e) Indemnification for Reserved Securities. In connection with the offer and sale of the Reserved Securities, the Company agrees, promptly upon a request, in writing to indemnify and hold harmless the Underwriters from and against any and all losses, liabilities, claims, damages and expenses incurred by them as a result of the failure of any of the Reserved Securities Participants to pay for and accept delivery of Reserved Securities which, by the end of the first business day following the date of this Agreement, were subject to a properly confirmed agreement to purchase. SECTION 7. Contribution. If the indemnification provided for in Section 6 ------------ hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the U.S. Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the U.S. Underwriters on the other hand in connection with the statements or omissions, or in connection with any violation of the nature referred to in Section 6(a)(ii)(A) hereof, which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the U.S. Underwriters on the other hand in connection with the offering of the U.S. Securities pursuant to this Agreement shall be deemed to be in the same respective 27 proportions as the total net proceeds from the offering of the U.S. Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the U.S. Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial public offering price of the U.S. Securities as set forth on such cover. The relative fault of the Company on the one hand and the U.S. Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the U.S. Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or any violation of the nature referred to in Section 6(a)(ii)(A) hereof. The Company and the U.S. Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the U.S. Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 7, no U.S. Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the U.S. Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such U.S. Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls a U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such U.S. Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within 28 the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The U.S. Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial U.S. Securities set forth opposite their respective names in Schedule A hereto and not joint. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. -------------------------------------------------------------- All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its Subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any U.S. Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the U.S. Underwriters. SECTION 9. Termination of Agreement. ------------------------ (a) Termination; General. The U.S. Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the U.S. Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the U.S. Representatives, impracticable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the New York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) if a banking moratorium has been declared by either Federal or New York authorities. (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full force and effect. 29 SECTION 10. Default by One or More of the U.S. Underwriters. If one or more ----------------------------------------------- of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting U.S. Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the U.S. Representatives shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Securities does not exceed 10% of the number of U.S. Securities to be purchased on such date, each of the non-defaulting U.S. Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting U.S. Underwriters, or (b) if the number of Defaulted Securities exceeds 10% of the number of U.S. Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the U.S. Underwriters to purchase and of the Company to sell the Option Securities to be purchased and sold on such Date of Delivery, shall terminate without liability on the part of any non-defaulting U.S. Underwriter. No action taken pursuant to this Section shall relieve any defaulting U.S. Underwriter from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the U.S. Underwriters to purchase and the Company to sell the relevant U.S. Option Securities, as the case may be, either the U.S. Representatives or the Company shall have the right to postpone the Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term "U.S. Underwriter" includes any person substituted for a U.S. Underwriter under this Section 10. SECTION 11. Notices. All notices and other communications hereunder ------- shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the U.S. Underwriters shall be directed to the Representatives at North Tower, World Financial Center, New York, New York 10281-1201, facsimile (212) 449-1642, attention of Gregg Seibert, Managing Director and Chairman; notices to the 30 Company shall be directed to it at Fox Entertainment Group, Inc., 1211 Avenue of the Americas, New York, NY 10036, facsimile (212) 852-7145, attention of Arthur M. Siskind, Esq., Senior Executive Vice President and General Counsel. SECTION 12. Parties. This Agreement shall each inure to the benefit of ------- and be binding upon the U.S. Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the U.S. Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the U.S. Underwriters and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any U.S. Underwriter shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY ---------------------- AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 14. Effect of Headings. The Article and Section headings herein ------------------ and the Table of Contents are for convenience only and shall not affect the construction hereof. 31 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the U.S. Underwriters and the Company in accordance with its terms. Very truly yours, FOX ENTERTAINMENT GROUP, INC. By: ------------------------------- Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS & CO. MORGAN STANLEY & CO. INCORPORATED BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION J.P. MORGAN SECURITIES INC. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON SMITH BARNEY INC. By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: -------------------------------------- Authorized Signatory For themselves and as U.S. Representatives of the other U.S. Underwriters named in Schedule A hereto. 32 SCHEDULE A Name of Underwriter Number of - ------------------- Initial Securities ---------- Merrill Lynch, Pierce, Fenner & Smith Incorporated............................... Allen & Company Incorporated........................... Goldman, Sachs & Co.................................... Morgan Stanley & Co. Incorporated...................... Bear, Stearns & Co. Inc................................ Donaldson, Lufkin & Jenrette Securities Corporation.... J.P. Morgan Securities Inc............................. NationsBanc Montgomery Securities LLC.................. Salomon Smith Barney Inc............................... ------------ Total.................................................. 72,250,000 ============ Sch A - 1 SCHEDULE B FOX ENTERTAINMENT GROUP, INC. 72,250,000 Shares of Class A Common Stock (Par Value $0.01 Per Share) 1. The initial public offering price of the Securities, determined as provided in Section 2, shall be $________. 2. The purchase price per share for the Securities to be paid by the several Underwriters shall be $________, being an amount equal to the initial public offering price set forth above less $________ per share; provided that the purchase price per share for any Option Securities purchased upon the exercise of the over-allotment option described in Section 2(b) shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. Sch B - 1 SCHEDULE C Lock-up Letters 1. The News Corporation Limited, a South Australia corporation. Sch C - 1 Exhibit A FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. (ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and to enter into and perform its obligations under the Purchase Agreements. (iii) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (iv) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectuses in the column entitled "Pro Forma" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to the Purchase Agreements or pursuant to the Recapitalization); the shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights arising by operation of law, or under the charter or by-laws of the Company, or, the best knowledge of such counsel, under any agreement to which the Company is a party. (v) The Securities have been duly authorized for issuance and sale to the Underwriters pursuant to the Purchase Agreements and, when issued and delivered by the Company pursuant to the Purchase Agreements against payment of the consideration set forth in the Purchase Agreements, will be validly issued and fully paid and non-assessable and no holder of the A-1 Securities is or will be subject to personal liability by reason of being such a holder. (vi) The issuance of the Securities is not subject to preemptive or other similar rights arising by operation of law, or under the charter or by-laws of the Company or, to the best knowledge of such counsel, under any agreement to which the Company is a party. (vii) Each Subsidiary has been duly organized and is validly existing as a limited liability company, corporation, general partnership or limited partnership, as the case may be, in good standing under the laws of the jurisdiction of its organization, has the requisite limited liability company, corporate or partnership power, as the case may be, and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and is duly qualified as a foreign limited liability company, corporation, general partnership or limited partnership, as the case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; all of the issued and outstanding capital stock of each Subsidiary that is a corporation has been duly authorized and validly issued, is fully paid and non-assessable; all of the limited liability company interests and limited partnership interests in each Subsidiary that is a limited liability company or limited partnership are validly issued and fully paid; and except as otherwise described in the Prospectuses and to the best knowledge of such counsel, all such shares and interests are owned by the Company, directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the outstanding shares of capital stock, limited liability company interests or partnership interests of any Subsidiary was issued in violation of the preemptive or similar rights arising by operation of law, or under the certificate of formation, limited liability company agreement, partnership agreement, charter, by-laws or other organizational documents of any Subsidiary or under any agreement filed as an exhibit to the Registration Statement. (viii) The Purchase Agreement has been duly authorized, executed and delivered by the Company. (ix) The Registration Statement, including any Rule 462(b) Registration Statement, has been declared effective under the 1933 Act; any required filing of the Prospectuses pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); and, to A-2 the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or threatened by the Commission. (x) The Registration Statement, including any Rule 462(b) Registration Statement, the Rule 430A Information and the Rule 434 Information, as applicable, the Prospectuses and each amendment or supplement to the Registration Statement and Prospectuses as of their respective effective or issue dates (other than the financial statements and supporting schedules included therein or omitted therefrom, as to which such counsel need express no opinion) complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. (xi) If Rule 434 has been relied upon, the Prospectus was not "materially different," as such term is used in Rule 434, from the prospectus included in the Registration Statement at the time it became effective. (xii) The form of certificate used to evidence the Common Stock complies in all material respects with all applicable statutory requirements, with any applicable requirements of the charter and by-laws of the Company and the requirements of the New York Stock Exchange. (xiii) To the best knowledge of such counsel, there is not pending or threatened in writing any action, suit, proceeding, inquiry or investigation, to which the Company or any subsidiary is a party, or to which the property of the Company or any subsidiary is subject, before or brought by any court or governmental agency or body, domestic or foreign, which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in the Purchase Agreements or the performance by the Company of its obligations thereunder. (xiv) The information in the Prospectuses under "Description of Capital Stock", "Reorganization", "Business--Properties", "Business-Legal Proceedings", "Relationship Between the Company and News Corporation", "Certain Arrangements Regarding the Company's Ownership of Other Entities", "Shares Available for Future Sale", and "Certain United States Tax Consequences to Non-United States Holders" and in the Registration Statement under Item 14, to the extent that it constitutes matters of law, summaries of legal matters, the Company's charter and by-laws or A-3 legal proceedings, or legal conclusions, has been reviewed by us and is correct in all material respects. (xv) To the best knowledge of such counsel, there are no statutes or regulations that are required to be described in the Prospectus that are not described as required. (xvi) All descriptions in the Registration Statement of contracts and other documents to which the Company or its subsidiaries are a party are accurate in all material respects; to the best knowledge of such counsel, there are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references thereto are correct in all material respects. (xvii) To the best knowledge of such counsel, neither the Company nor any Subsidiary is in violation of its charter, by-laws, certificate of formation, limited liability company agreement or other organizational documents and no default by the Company or any Subsidiary exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the Prospectuses or filed or incorporated by reference as an exhibit to the Registration Statement. (xviii) Except as previously made or obtained, as the case may be, no Governmental Approval (as defined below) is necessary or required in connection with the due authorization, execution or delivery by the Company of the Purchase Agreements, the performance by the Company of the transactions contemplated thereby or the offering, issuance or sale of the Securities, except such as may be required under state securities or "Blue Sky" laws and the rules and regulations of the National Association of Securities Dealers, Inc.. The term "Governmental Approval" means any filing with, or authorization, approval, consent, license, order, registration, qualification or decree of any Governmental Authority (as defined below) pursuant to Applicable Laws (as defined below). The term "Applicable Laws" means only those laws, rules and regulations of the State of Dela ware, State of New York, State of California and of the United States of America which, in such counsel's experience, are ordinarily applicable to transactions of the type contemplated by the Purchase Agreements; provided, however, that Applicable Laws shall not include any matter relating to federal communications law and the rules, regulations and administrative A-4 orders promulgated or proposed for promulgation thereunder. The term "Governmental Authority" means any Delaware, New York, California or federal legislative, judicial, administrative or regulatory body under Applicable Laws. (xix) The execution, delivery and performance of the Purchase Agreements and the consummation of the transactions contemplated in the Purchase Agreements and in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use Of Proceeds") and compliance by the Company with its obligations under the Purchase Agreements do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined in Section 1(a)(x) of the Purchase Agreements) under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to such counsel, to which the Company or any Subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any Subsidiary is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter, by-laws, certificate of formation, limited liability company agreement or other organizational documents of the Company or any Subsidiary, or any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any subsidiary or any of their respective properties, assets or operations. (xx) Each of the Master Intercompany Agreement, the Tax Sharing Agreement and the Indemnity Agreement (each as defined in the Prospectuses) has been duly authorized, executed and delivered by the Company and its Subsidiaries, as applicable, and constitutes the binding agreement of such party, enforceable against such party in accordance with its terms, except as the enforcement thereof may be limited by (i) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfer), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) or (ii) as to any indemnification or contribution provision thereof, by any applicable state or federal securities laws, rules or regulations or by public policy. A-5 (xxi) The Company is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the 1940 Act. Such counsel has participated in conferences with directors, officers and other representatives of the Company, representatives of the independent public accountants for the Company, representatives of the Underwriters and representatives of counsel for the Underwriters, at which conferences the contents of the Registration Statement and the Prospectus and related matters were discussed, and, although counsel has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, nothing has come to such counsel's attention that would lead such counsel to believe that the Registration Statement or any amendment thereto, including the Rule 430A Information and Rule 434 Information (if applicable), at the time such Registration Statement or any such amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectuses or any amendment or supplement thereto, at the time the Prospectuses were issued, at the time any such amended or supplemented prospectus was issued or at the Closing Time, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel expresses no opinion or belief with respect to the financial statements, schedules and other financial data included therein or excluded therefrom. In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal conclusions), to the extent they deem proper on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). The opinion shall relate only to the laws of the State of New York, the corporate laws of the State of Delaware, and the federal laws of the United States of America in force on the date thereof. The opinion is not intended to cover and shall not cover any matter relating to federal communications law and the rules, regulations and administrative order promulgated or proposed for promulgation thereunder. A-6 Exhibit B FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(c) (i) The information in the Prospectus under the captions "Risk Factors - Regulation" and "Business - Regulation," to the extent that such information constitutes a summary of federal communications law and the rules, regulations and administrative orders promulgated or proposed for promulgation thereunder, has been reviewed by such counsel and is correct in all material respects. (ii) Except as previously made or obtained, as the case may be, no filing or registration with, or authorization, approval, consent, license, order, qualification or decree of the FCC is required under the Communications Act of 1934, as amended, and the rules, regulations and administrative orders promulgated thereunder (collectively, the "Federal Communications Laws") in connection with the execution or delivery by the Company of the Purchase Agreements, the performance by the Company of the transactions contemplated thereby or the offering, issuance or sale of the Securities, as applicable, all as of the date hereof. (iii) Except as set forth in the Prospectus, to our knowledge based solely on a review of publicly available files of the FCC in Washington, D.C., neither the Company nor any of its Subsidiaries is in violation of any Federal Communications Law or any order of any court or administrative agency or authority relating thereto which violation would have a Material Adverse Effect. (iv) The Company and the Subsidiaries are the holders of the main commercial television station licenses issued by the FCC listed in Attachment A hereto (the "FCC Licenses"), all of which are in full force and effect, with no material conditions, restrictions or qualifications other than as described in the Registration Statement and the Prospectus, and to our knowledge, such FCC Licenses constitute all of the commercial television station licenses necessary for the Company and the Subsidiaries to own their properties and to conduct their businesses in the manner and to the full extent now operated or proposed to be operated as described in the Prospectus. (v) During the course of preparation of the Registration Statement and Prospectus, we participated in certain discussions with certain officers, employees and representatives of the Company as to FCC regulatory matters dealt with under B-1 the captions "Risk Factors - Regulation" and "Business - Regulation" in the Registration Statement and Prospectus. Although we have not undertaken to determine independently, and we do not assume any responsibility for, the accuracy, completeness, or fairness of the statements under such captions, we may state on the basis of these discussions and our activities as special FCC counsel to the Company in connection with the Registration Statement and Prospectus that no facts have come to our attention that cause us to believe that there are any FCC orders, decrees or rulings outstanding against the Company or any of its Subsidiaries or any pending or threatened actions, suits or proceedings against the Company or any of its Subsidiaries by or before the FCC that seek to revoke, or if determined adversely to the Company or any of its Subsidiaries, would result in a revocation or non-renewal of, any of the FCC Licenses, other than as disclosed in the Registration Statement or Prospectus. B-2 Exhibit C FORM OF LOCK-UP LETTER , 1998 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS & CO. MORGAN STANLEY & CO. INCORPORATED BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION J.P. MORGAN SECURITIES INC. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON SMITH BARNEY INC. As Representatives of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Re: Fox Entertainment Group, Inc. ----------------------------- Ladies and Gentlemen: As of the closing of the Offering referred to below, the undersigned will be the beneficial owner of _____ shares of Class A Common Stock, par value $.01 per share (the "Class A Common Stock") and _____ shares of Class B Common Stock, par value $.01 per share (the "Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock") of Fox Entertainment Group, Inc. (the "Company"), a Delaware corporation. The undersigned understands that the Company has filed a Registration Statement on Form S-1 (the "Registration Statement") with the Securities and Exchange Commission for the registration of an C-1 aggregate offering price of approximately $ 2,340,000,000 of shares of Class A Common Stock (which includes the aggregate offering price of shares subject to an over-allotment option) (the "Offering"). The undersigned further understands that you are contemplating entering into a U.S. Purchase Agreement and an International Purchase Agreement (together, the "Purchase Agreements") with the Company in connection with the Offering. All terms not otherwise defined herein shall have the same meanings as in the Purchase Agreements. In recognition of the benefit that such the Offering will confer upon the undersigned as a stockholder of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Purchase Agreements (the "Underwriters") that, during a period of 180 days from the date of the Purchase Agreements, the undersigned will not, without the prior written consent of Merrill Lynch, Pierce Fenner & Smith Incorporated directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer (or announce any offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or other disposition of or transfer of) any shares of the Company's Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) or the power of disposition, or file any registration statement under the Securities Act of 1933, as amended, with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise. C-2 The undersigned, whether or not participating in the offering, confirms that he, she or it understands that the Underwriters and the Company will rely upon the representations set forth in this agreement in proceeding with the Offering. This agreement shall be binding on the undersigned and his, her or its respective successors, heirs, personal representatives and assigns. Very truly yours, ----------------------------- Name: The foregoing is accepted and agreed to as of the date first above written: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS & CO. MORGAN STANLEY & CO. INCORPORATED BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION J.P. MORGAN SECURITIES INC. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON SMITH BARNEY INC. By: ------------------------------------ Authorized Signatory For themselves and as Representatives of the other Underwriters. C-3 EX-1.2 3 FORM OF INTERNATIONAL PURCHASE AGREEMENT EXHIBIT 1.2 ================================================================================ FOX ENTERTAINMENT GROUP, INC. (a Delaware corporation) 12,750,000 Shares of Class A Common Stock INTERNATIONAL PURCHASE AGREEMENT Dated: November __, 1998 ================================================================================ TABLE OF CONTENTS
Page ---- SECTION 1. Representations and Warranties.......................................... 4 (a) Representations and Warranties by the Company...................... 4 (i) Compliance with Registration Requirements.............. 4 ----------------------------------------- (ii) Independent Accountants................................ 6 ----------------------- (iii) Financial Statements................................... 6 -------------------- (iv) No Material Adverse Change in Business................. 6 -------------------------------------- (v) Good Standing of the Company........................... 7 ---------------------------- (vi) Good Standing of Subsidiaries.......................... 7 ----------------------------- (vii) Capitalization......................................... 7 -------------- (viii) Authorization of Agreement............................. 8 -------------------------- (ix) Authorization and Description of Securities............ 8 ------------------------------------------- (x) Absence of Defaults and Conflicts...................... 8 --------------------------------- (xi) Absence of Labor Dispute............................... 9 ------------------------ (xiv) Intercompany Agreements................................ 9 ----------------------- (xv) Absence of Proceedings................................. 10 ---------------------- (xvi) Accuracy of Exhibits................................... 10 -------------------- (xvii) Possession of Intellectual Property.................... 10 ----------------------------------- (xviii) Absence of Further Requirements........................ 11 ------------------------------- (xix) Possession of Licenses and Permits..................... 11 ---------------------------------- (xx) Title to Property...................................... 11 ----------------- (xxi) Tax Returns and Payment of Expenses.................... 12 ----------------------------------- (xxii) Investment Company Act................................. 12 ---------------------- (xxiii) Environmental Laws..................................... 12 ------------------ (xxiv) Insurance.............................................. 13 --------- (xxv) Registration Rights.................................... 13 ------------------- (xxvi) No Stabilization or Manipulation....................... 13 -------------------------------- (b) Officer Certificates............................................... 13 SECTION 2. Sale and Delivery to International Managers; Closing.................... 14 ----------------------------------------------------- (a) Initial Securities................................................. 14 (b) Option Securities.................................................. 14 (c) Payment............................................................ 14 (d) Denominations; Registration........................................ 15
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Page ---- SECTION 3. Covenants of the Company................................................ 15 ------------------------ (a) Compliance with Securities Regulations and Commission Requests................................................................ 15 (b) Filing of Amendments.................................................... 16 (c) Delivery of Registration Statements..................................... 16 (d) Delivery of Prospectuses................................................ 17 (e) Continued Compliance with Securities Laws............................... 17 (f) Blue Sky Qualifications................................................. 17 (g) Rule 158................................................................ 18 (h) Use of Proceeds......................................................... 18 (i) Listing................................................................. 18 (j) Restriction on Sale of Securities....................................... 18 (k) Reporting Requirements.................................................. 18 (l) Compliance with NASD Rules.............................................. 19 (m) Compliance with Rule 463................................................ 19 SECTION 4. Payment of Expenses..................................................... 19 ------------------- (a) Expenses....................................................... 19 (b) Termination of Agreement....................................... 20 SECTION 5. Conditions of International Managers' Obligations....................... 20 ------------------------------------------------- (a) Effectiveness of Registration Statement........................ 20 (b) Opinion of Counsel for Company................................. 20 (c) Opinion of Regulatory Counsel for Company...................... 21 (d) Opinion of Counsel for International Managers.................. 21 (e) Officers' Certificate.......................................... 21 (f) Accountant's Comfort Letter.................................... 22 (g) Bring-down Comfort Letter...................................... 22 (h) Approval of Listing............................................ 22 (i) No Objection.................................................. 22 (j) Lock-up Agreements............................................. 23 (k) Purchase of Initial U.S. Securities............................ 23 (l) Recapitalization and Reorganization............................ 23 (m) Conditions to Purchase of International Option Securities.............................................. 23 (n) Additional Documents............................................ 24 (o) Termination of Agreement........................................ 24 SECTION 6. Indemnification......................................................... 24 --------------- (a) Indemnification of International Managers............................... 24 (b) Indemnification of Company, Directors and Officers...................... 26 (c) Actions against Parties; Notification................................... 26 (d) Settlement without Consent if Failure to Reimburse...................... 27
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Page ---- (e) Indemnification for Reserved Securities............................ 27 SECTION 7. Contribution............................................................ 27 ------------ SECTION 8. Representations, Warranties and Agreements to Survive Delivery.......... 29 -------------------------------------------------------------- SECTION 9. Termination of Agreement................................................ 29 ------------------------ (a) Termination; General.................................................... 29 (b) Liabilities............................................................. 30 SECTION 10. Default by One or More of the International Managers.................... 30 ----------------------------------------------------- SECTION 11. Notices................................................................. 31 ------- SECTION 12. Parties................................................................. 31 ------- SECTION 13. GOVERNING LAW AND TIME.................................................. 31 ---------------------- SECTION 14. Effect of Headings...................................................... 31 ------------------
iii FOX ENTERTAINMENT GROUP, INC. (a Delaware corporation) 12,750,000 Shares of Class A Common Stock (Par Value $0.01 Per Share) INTERNATIONAL PURCHASE AGREEMENT -------------------------------- November __, 1998 MERRILL LYNCH INTERNATIONAL ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS INTERNATIONAL MORGAN STANLEY & CO. INTERNATIONAL LIMITED BEAR, STEARNS INTERNATIONAL LIMITED DONALDSON, LUFKIN & JENRETTE INTERNATIONAL J.P. MORGAN SECURITIES LTD. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON BROTHERS INTERNATIONAL LIMITED as Lead Managers of the several International Managers c/o Merrill Lynch International Ropemaker Place 25 Ropemaker Street London EC2Y 9LY England Ladies and Gentlemen: Fox Entertainment Group, Inc., a Delaware corporation (the "Company"), confirms its agreement with Merrill Lynch International (together, "Merrill Lynch") and each of the other international underwriters named in Schedule A hereto (collectively, the "International Managers," which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Allen & Company Incorporated, Goldman, Sachs International, Morgan Stanley & Co. International Limited, Bear, Stearns International Limited, Donaldson, Lufkin & Jenrette International, J.P. Morgan Securities Ltd., NationsBanc Montgomery Securities LLC, Salomon Brothers International Limited are acting as representatives (in such capacity, the "Lead Managers"), with respect to the issue and sale by the Company and the purchase by the International Managers, acting severally and not jointly, of the respective number of shares of Class A Common Stock, par value $0.01 per share, of the Company (the "Class A Common Stock" and, together with the Class B Common Stock, par value $0.01 per share, of the Company, the "Common Stock") set forth in said Schedule A, and with respect to the grant by the Company to the International Managers, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 1,875,000 additional shares of Class A Common Stock to solely cover over-allotments, if any. The aforesaid 12,750,000 shares of Class A Common Stock (the "Initial International Securities") to be purchased by the International Managers and all or any part of the 1,875,000 shares of Class A Common Stock subject to the option described in Section 2(b) hereof (the "International Option Securities") are hereinafter called, collectively, the "International Securities." It is understood that the Company is concurrently entering into an agreement dated the date hereof (the "U.S. Purchase Agreement") providing for the offering by the Company of an aggregate of 72,250,000 shares of Class A Common Stock (the "Initial U.S. Securities") through arrangements with certain underwriters in the United States and Canada (the "U.S. Underwriters") for which Merrill Lynch, Pierce, Fenner & Smith Incorporated, Allen & Company Incorporated, Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette Securities Corporation, J.P. Morgan Securities Inc., NationsBanc Montgomery Securities LLC and Salomon Smith Barney Inc. are acting as representatives (the "U.S. Representatives") and the grant by the Company to the U.S. Underwriters, acting severally and not jointly, of an option to purchase all or any part of the U.S. Underwriters' pro rata portion of up to 10,625,000 additional shares of Class A Common Stock solely to cover overallotments, if any (the "U.S. Option Securities" and, together with the International Option Securities, the "Option Securities"). The Initial U.S. Securities and the U.S. Option Securities are hereinafter called the "U.S. Securities." It is understood that the Company is not obligated to sell and the International Managers are not obligated to purchase, any Initial International Securities unless all of the Initial U.S. Securities are contemporaneously purchased by the U.S. Underwriters. The International Managers and the U.S. Underwriters are hereinafter collectively called the "Underwriters," the Initial International Securities and the Initial U.S. Securities are hereinafter collectively called the "Initial Securities," and the International Securities and the U.S. Securities are hereinafter collectively called the "Securities." The Underwriters will concurrently enter into an Intersyndicate Agreement of even date herewith (the "Intersyndicate Agreement") providing for the 2 coordination of certain transactions among the Underwriters under the direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in such capacity, the "Global Coordinator"). The Company understands that the International Managers propose to make a public offering of the International Securities as soon as the Lead Managers deem advisable after this Agreement has been executed and delivered. The Company and the International Managers agree that up to_________ shares of the Initial U.S. Securities to be purchased by the U.S. Underwriters ( the "Reserved Securities") shall be reserved for sale by the Underwriters to certain eligible employees of The News Corporation Limited, the Company and their respective subsidiaries and certain persons having business relationships with the Company ("Reserved Securities Participants"), as part of the distribution of the Securities by the Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and interpretations of the National Association of Securities Dealers, Inc. and all other applicable laws, rules and regulations. To the extent that such Reserved Securities are not orally confirmed for purchase by such eligible employees and persons having business relationships with the Company by the end of the first business day after the date of this Agreement, such Reserved Securities may be offered to the public as part of the public offering contemplated hereby. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-1 (No. 333-61515) covering the registration of the Securities under the Securities Act of 1933, as amended (the "1933 Act"), including the related preliminary prospectus or prospectuses. Promptly after execution and delivery of this Agreement, the Company will either (i) prepare and file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to be used in connection with the offering and sale of the Securities: one relating to the International Securities (the "Form of International Prospectus") and one relating to the U.S. Securities (the "Form of U.S. Prospectus"). The Form of International Prospectus is identical to the Form of U.S. Prospectus, except for the front cover and back cover pages and the information under the caption "Underwriting." The information included in any such prospectus or in any such Term Sheet, as the case may be, that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b) 3 pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each Form of International Prospectus and Form of U.S. Prospectus used before such registration statement became effective, and any prospectus that omitted, as applicable, the Rule 430A Information or Rule 434 Information, that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a "preliminary prospectus." Such registration statement, including the exhibits thereto and schedules thereto at the time it became effective and including the Rule 430A Information and the Rule 434 Information, as applicable, is herein called the "Registration Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b) Registration Statement," and after such filing the term "Registration Statement" shall include the Rule 462(b) Registration Statement. The final Form of International Prospectus and the final Form of U.S. Prospectus in the forms first furnished to the Underwriters for use in connection with the offering of the Securities are herein called the "International Prospectus" and the "U.S. Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is relied on, the terms "U.S. Prospectus" and "International Prospectus" shall refer to the preliminary International Prospectus dated October 20, 1998 and preliminary U.S. Prospectus dated October 20, 1998, respectively, each together with the applicable Term Sheet and all references in this Agreement to the date of such Prospectuses shall mean the date of the applicable Term Sheet. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). SECTION 1. Representations and Warranties. (a) Representations and Warranties by the Company. The Company represents and warrants to each International Manager as of the date hereof and as of the Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in Section 2(b) hereof and agrees with each International Manager as follows: (i) Compliance with Registration Requirements. Each of the Registration ----------------------------------------- Statement and any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information from the Company has been satisfied in all material respects. 4 At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective and at the Closing Time (and, if any International Option Securities are purchased, at the Date of Delivery), the Registration Statement, any Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectuses, any preliminary prospectuses and any supplement thereto or prospectus wrapper prepared in connection therewith, at their respective times of issuance and at the Closing Time, complied and will comply in all material respects with any applicable laws or regulations of foreign jurisdictions in which the Prospectuses and such preliminary prospectuses, as amended or supplemented, if applicable, are distributed in connection with the offer and sale of Reserved Securities. Neither of the Prospectuses nor any amendments or supplements thereto (including any prospectus wrapper), at the time the Prospectuses or any amendments or supplements thereto were issued and at the Closing Time (and, if any International Option Securities are purchased, at the Date of Delivery), included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If Rule 434 is used, the Company will comply with the requirements of Rule 434 and the Prospectuses shall not be "materially different ," as such term is used in Rule 434, from the prospectuses included in the Registration Statement at the time it became effective. The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or the International Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any International Manager through the Lead Managers expressly for use in the Registration Statement or the International Prospectus. Each preliminary prospectus and the prospectuses filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectuses delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. 5 The Company has filed a registration statement pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the "1934 Act"), to register the Class A Common Stock, and such registration statement has been declared effective. (ii) Independent Accountants. The accountants who certified the financial ----------------------- statements and supporting schedules included in the Registration Statement are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iii) Financial Statements. The combined financial statements included in -------------------- the Registration Statement and the Prospectuses, together with the related schedules and notes, present fairly the financial position of the Company, its subsidiaries and the predecessor entities to the Company at the dates indicated and the combined statement of operations, shareholders' equity and cash flows of the Company, its subsidiaries and the predecessor entities to the Company for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectuses present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. The pro forma financial statements of the Company and its subsidiaries and the related notes thereto included in the Registration Statement and the Prospectuses present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. (iv) No Material Adverse Change in Business. Since the respective dates as -------------------------------------- of which information is given in the Registration Statement and the Prospectuses, except as otherwise stated therein or contemplated thereby, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries (as defined in Regulation S-X) (each a "Subsidiary" and, collectively, the "Subsidiaries") considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its Subsidiaries which 6 are material to the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (v) Good Standing of the Company. The Company has been duly organized and ---------------------------- is validly existing as a corporation in good standing under the laws of the State of Delaware and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (vi) Good Standing of Subsidiaries. Each of the Subsidiaries has been duly ----------------------------- organized and is validly existing as a limited liability company, corporation, limited partnership or general partnership in good standing under the laws of the jurisdiction of its organization, has the requisite power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and is duly qualified as a foreign limited liability company, corporation, limited partnership or general partnership to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise described in the Registration Statement, all of the issued and outstanding capital stock of each Subsidiary that is a corporation has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock, limited liability company interests or partnership interests of any of the Subsidiaries was issued in violation of any preemptive or similar rights arising by operation of law, or under the charter, by-laws, certificate of formation, limited liability company agreement, partnership agreement, or other organizational documents of any Subsidiary or under any agreement to which the Company or any Subsidiary is a party. (vii) Capitalization. The authorized, issued and outstanding capital -------------- stock of the Company is as set forth in the Prospectuses in the 7 column entitled "Pro Forma" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectuses or pursuant to the exercise of convertible securities or options referred to in the Prospectuses). The shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. (viii) Authorization of Agreement. This Agreement and the U.S. Purchase -------------------------- Agreement have been duly authorized, executed and delivered by the Company. (ix) Authorization and Description of Securities. The Securities to be ------------------------------------------- purchased by the International Managers and the U.S. Underwriters from the Company have been duly authorized for issuance and sale to the International Manager pursuant to this Agreement and to the U.S. Underwriters pursuant to the U.S. Purchase Agreement, respectively, and, when issued and delivered by the Company pursuant to this Agreement and the U.S. Purchase Agreement, respectively, against payment of the consideration set forth herein and the U.S. Purchase Agreement, respectively, will be validly issued, fully paid and non- assessable; the Common Stock conforms to all statements relating thereto contained in the Prospectuses and such description conforms to the rights set forth in the instruments defining the same; no holder of the Securities will be subject to personal liability by reason of being such a holder; and the issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. (x) Absence of Defaults and Conflicts. Neither the Company nor any of its --------------------------------- Subsidiaries is in violation of its charter, by-laws, certificate of formation, limited liability company agreement, partnership agreement, or other organizational documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its Subsidiaries is subject (collectively, "Agreements and Instruments") except for such violations and defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement and the U.S. Purchase Agreement and the consummation of the transactions contemplated in this Agreement, the U.S. Purchase 8 Agreement and in the Registration Statement (including the Recapitalization (as defined in the Prospectuses), the Reorganization (as defined in the Prospectuses), the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectuses under the caption "Use of Proceeds") and compliance by the Company with its obligations under this Agreement and the U.S. Purchase Agreement have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries pursuant to, the Agreements and Instruments (except for such conflicts, breaches or defaults or liens, charges or encumbrances that, singly or in the aggregate, would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter, by-laws, certificate of formation, limited liability company agreement, partnership agreement, or other organizational documents of the Company or any of its Subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its Subsidiaries or any of their assets, properties or operations. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its Subsidiaries. (xi) Absence of Labor Dispute. Except as disclosed in the Prospectus, no ------------------------ labor dispute with the employees of the Company or any Subsidiary exists or, to the knowledge of the Company, none are imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any Subsidiary's principal suppliers, manufacturers, customers or contractors, which, in either case, may reasonably be expected to result in a Material Adverse Effect. (xii) Intercompany Agreements. Each of the Master Intercompany Agreement ----------------------- and the Tax Sharing Agreement (each as defined in the Prospectuses) has been duly authorized, executed and delivered by the Company and its Subsidiaries, as applicable, and constitutes the binding agreement of such party, enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable 9 principles (whether enforcement is sought by proceedings in equity or at law). (xiii) Absence of Proceedings. There is no action, suit, proceeding, ---------------------- inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign (including, but not limited to the Federal Communications Commission ("FCC")), now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any Subsidiary which is required to be disclosed in the Registration Statement (other than as disclosed therein), or which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the consummation of the transactions contemplated in this Agreement and the U.S. Purchase Agreement or the performance by the Company of its obligations hereunder or thereunder; the aggregate of all pending legal or governmental proceedings to which the Company or any Subsidiary is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect. (xiv) Accuracy of Exhibits. There are no contracts or documents which are -------------------- required to be described in the Registration Statement or the Prospectuses or to be filed as exhibits thereto which have not been so described and filed as required. (xv) Possession of Intellectual Property. Except as disclosed in the ----------------------------------- Prospectus, the Company and its Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them as described in the Prospectus, and neither the Company nor any of its Subsidiaries has received any written notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its Subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect. 10 (xvi) Absence of Further Requirements. No filing with, or authorization, ------------------------------- approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities under this Agreement and the U.S. Purchase Agreement or the consummation of the transactions contemplated by this Agreement and the U.S. Purchase Agreement, except (i) such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations and foreign or state securities or blue sky laws, (ii) such as have been already obtained or may be required under the Communications Act of 1934, as amended and (iii) such as have been obtained under the laws and regulations of jurisdictions outside the United States in which the Reserved Securities are offered. (xvii) Possession of Licenses and Permits. The Company and its ---------------------------------- Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies (including, without limitation, the FCC) necessary to conduct the businesses now operated by them, except where the failure to possess Governmental Licenses would not, singly or in the aggregate, have a Material Adverse Effect; the Company and its Subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, for the maximum license term customarily issued, with no material conditions, restrictions or qualifications, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and neither the Company nor any of its Subsidiaries has received any notice of proceedings relating to the revocation, modification, non-renewal or suspension of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. (xviii) Title to Property. The Company and its Subsidiaries have good ----------------- and marketable title to all real property owned by the Company and its Subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (a) are described in the Prospectuses or (b) would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect; and all of the 11 leases and subleases material to the business of the Company and its Subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Prospectuses, are in full force and effect, and neither the Company nor any of its Subsidiaries has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its Subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of such the Company or any Subsidiary thereof to the continued possession of the leased or subleased premises under any such lease or sublease. (xix) Tax Returns and Payment of Taxes. The Company and its Subsidiaries -------------------------------- have timely filed all federal, state, local and foreign tax returns that are required to be filed or have duly requested extensions thereof and all such tax returns are true, correct and complete. The Company and its Subsidiaries have timely paid all taxes required to be paid by any of them and any related assessments, fines or penalties, except for any such tax, assessment, fine or penalty that is being contested in good faith and by appropriate proceedings; and adequate charges, accruals and reserves have been provided for in the financial statements referred to in Section 1(a)(iii) above in respect of all federal, state, local and foreign taxes for all periods as to which the tax liability of the Company or any of its Subsidiaries has not been finally determined or remains open to examination by applicable taxing authorities. The Company is not a "United States real property holding corporation" within the meaning of Section 897(c)(3) of the Internal Revenue Code of 1986, as amended. (xx) Investment Company Act. The Company is not, and upon the issuance and ---------------------- sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectuses will not be, an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act"). (xxi) Environmental Laws. Except as described in the Registration ------------------ Statement and except such matters as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, 12 laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and its Subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its Subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its Subsidiaries relating to Hazardous Materials or Environmental Laws. (xxii) Insurance. The Company and each of its Subsidiaries is insured by --------- insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they will be engaged; and neither the Company nor any of its Subsidiaries has any reason to believe that any of them will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business. (xxiii) Registration Rights. There are no persons with registration ------------------- rights or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the 1933 Act. (xxiv) No Stabilization or Manipulation. The Company has not taken and -------------------------------- will not take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Securities in violation of Regulation M under the 1934 Act. (b) Officer Certificates. Any certificate signed by any officer of the Company or any of its Subsidiaries delivered to the Global Coordinator, the Lead Managers or to counsel for the International Managers shall be deemed a representation and warranty by the Company to each International Manager as to the matters covered thereby. 13 SECTION 2. Sale and Delivery to International Managers; Closing. ---------------------------------------------------- (a) Initial Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each International Manager, severally and not jointly, and each International Manager, severally and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule B, the number of Initial International Securities set forth in Schedule A opposite the name of such International Manager, plus any additional number of Initial International Securities which such International Manager may become obligated to purchase pursuant to the provisions of Section 10 hereof. (b) Option Securities. In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the International Managers, severally and not jointly, to purchase up to an additional 1,875,000 shares of Common Stock at the price per share set forth in Schedule B, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial International Securities but not payable on the International Option Securities. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial International Securities upon notice by the Global Coordinator to the Company setting forth the number of International Option Securities as to which the several International Managers are then exercising the option and the time and date of payment and delivery for such International. Option Securities. Any such time and date of delivery for the International Option Securities (a "Date of Delivery") shall be determined by the Global Coordinator, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of the International Option Securities, each of the International Managers, acting severally and not jointly, will purchase that proportion of the total number of International Option Securities then being purchased which the number of Initial International Securities set forth in Schedule A opposite the name of such International Manager bears to the total number of Initial International Securities, subject in each case to such adjustments as the Global Coordinator in its discretion shall make to eliminate any sales or purchases of fractional shares. (c) Payment. Payment of the purchase price for, and delivery of certificates for, the Initial Securities shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York, or at such other place as shall be agreed upon by the Global Coordinator and the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs 14 after 4:30 p.m. (Eastern time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Global Coordinator and the Company (such time and date of payment and delivery being herein called the "Closing Time"). In addition, in the event that any or all of the International Option Securities are purchased by the International Managers, payment of the purchase price for, and delivery of certificates for, such International. Option Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Global Coordinator and the Company, on each Date of Delivery as specified in the notice from the Global Coordinator to the Company. Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Lead Managers for the respective accounts of the International Managers of certificates for the International Securities to be purchased by them. It is understood that each International Manager has authorized the Lead Managers, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial International Securities and the International Option Securities, if any, which it has agreed to purchase. Merrill Lynch, individually and not as representative of the International Managers may (but shall not be obligated to) make payment of the purchase price for the Initial International Securities or the International Option Securities, if any, to be purchased by any International Manager whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such International Manager from its obligations hereunder. (d) Denominations; Registration. Certificates for the Initial International Securities and the International Option Securities, if any, shall be in such denominations and registered in such names as the Lead Managers may request in writing at least one full business day before the Closing Time or the relevant Date of Delivery, as the case may be. The certificates for the Initial International Securities and the International Option Securities, if any, will be made available for examination and packaging by the Lead Managers in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be. SECTION 3. Covenants of the Company. The Company covenants with each ------------------------ International Manager as follows: (a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements of Rule 430A or Rule 434, as applicable, and will notify the Global Coordinator 15 immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectuses or any amended Prospectuses shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectuses or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) Filing of Amendments. The Company will give the Global Coordinator notice of its intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectuses, will furnish the Global Coordinator with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Global Coordinator or counsel for the International Managers shall reasonably object, except as the Company may reasonably determine is necessary to comply with applicable laws. (c) Delivery of Registration Statements. The Company has furnished or will deliver to the Lead Managers and counsel for the International Managers, without charge, copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Lead Managers, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the International Managers. The copies of the Registration Statement and each amendment thereto furnished to the International Managers will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. 16 (d) Delivery of Prospectuses. The Company has delivered to each International Manager, without charge, as many copies of each preliminary prospectus as such International Manager reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each International Manager, without charge, during the period when the International. Prospectus is required to be delivered under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of the International Prospectus (as amended or supplemented) as such International Manager may reasonably request. The International Prospectus and any amendments or supplements thereto furnished to the International Managers will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement, the U.S. Purchase Agreement and in the Prospectuses. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the International Managers or for the Company, to amend the Registration Statement or amend or supplement any Prospectus in order that the Prospectuses will not include any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement any Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectuses comply with such requirements, and the Company will furnish to the International Managers such number of copies of such amendment or supplement as the International Managers may reasonably request. The International Managers shall notify the Company upon their completion of the distribution of the Securities as contemplated by this Agreement, the U.S. Purchase Agreement and in the Prospectus. (f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the International Managers, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Global Coordinator may designate and to maintain such qualifications in effect for a period of not less than one year from the later of the effective date of the Registration Statement and any Rule 462(b) Registration 17 Statement; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement and any Rule 462(b) Registration Statement. (g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act. (h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectuses under "Use of Proceeds". (i) Listing. The Company will use its best efforts to effect the listing of the Class A Common Stock (including the Securities) on the New York Stock Exchange. (j) Restriction on Sale of Securities. During a period of 180 days from the date of the Prospectuses, the Company will not, without the prior written consent of the Global Coordinator, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder or under the U.S. Purchase Agreement or (B) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to existing employee benefit plans of the Company referred to in the Prospectuses. (k) Reporting Requirements. The Company, during the period when the Prospectuses are required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be filed with the Commission pursuant to the 1934 18 Act within the time periods required by the 1934 Act and the rules and regulations of the Commission thereunder. (l) Compliance with NASD Rules. The Company hereby agrees that it will ensure that the Reserved Securities will be restricted as required by the National Association of Securities Dealers, Inc. (the "NASD") under NASD Rule 2110(d) from sale, transfer, assignment, pledge or hypothecation for a period of three months following the date of this Agreement. The Underwriters will notify the Company as to which persons will need to be so restricted. At the request of the Underwriters, the Company will direct the transfer agent to place a stop transfer restriction upon such securities for such period of time. Should the Company release, or seek to release, from such restrictions any of the Reserved Securities, the Company agrees to reimburse the Underwriters for any reasonable expenses (including, without limitation, legal expenses) they incur in connection with such release. (m) Compliance with Rule 463. The Company will file with the Commission such information regarding the use of the net proceeds of the Offering as may be required pursuant to Rule 463 of the 1933 Act Regulations. SECTION 4. Payment of Expenses. ------------------- (a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among Underwriters and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters and the transfer of the Securities between the U.S. Underwriters and the International Managers, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheets and of the Prospectuses and any amendments or supplements thereto, (vii) the preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii) the transportation and other expenses incurred by the Company in connection with presentations to prospective purchasers of the 19 Securities, (ix) the fees and expenses of any transfer agent or registrar for the Securities and (x) the filing fees incident to, and the fees and disbursements of counsel to the Underwriters in connection with, the review by the NASD of the terms of the sale of the Securities, (xi) the fees and expenses incurred in connection with the listing of the Securities on the New York Stock Exchange, and (xii) all reasonable costs and expenses of the Underwriters, including the reasonable fees and disbursements of counsel for the Underwriters, in connection with matters related to the Reserved Securities. (b) Termination of Agreement. If this Agreement is terminated by the Lead Managers in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the International Managers for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the International Managers. SECTION 5. Conditions of International Managers' Obligations. The ------------------------------------------------- obligations of the several International Managers hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company or any of its Subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: (a) Effectiveness of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the International Managers. A prospectus containing the Rule 430A Information shall have been filed with the Commission in accordance with Rule 424(b) (or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall have been filed with the Commission in accordance with Rule 424(b). (b) Opinion of Counsel for Company. At the Closing Time, the Lead Managers shall have received the favorable opinion, dated as of the Closing Time, of Squadron, Ellenoff, Plesent & Sheinfeld, LLP, counsel for the Company, in form and substance satisfactory to counsel for the International Managers, together with signed or reproduced copies of such letter for each of the other International Managers to the effect set forth in Exhibit A hereto and to such further effect as counsel to the International Managers may reasonably request. In giving such 20 opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the U.S. Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its Subsidiaries and certificates of public officials. (c) Opinion of Regulatory Counsel for Company. At the Closing Time, the Lead Managers shall have received the favorable opinion, dated as of the Closing Time, of Hogan & Hartson L.L.P., special counsel for the Company, in form and substance satisfactory to counsel for the International Managers, together with signed or reproduced copies of such letter for each of the other International Managers to the effect set forth in Exhibit B hereto and to such further effect as counsel to the International Managers may reasonably request. In giving such opinion, such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its Subsidiaries and certificates of public officials. (d) Opinion of Counsel for International Managers. At the Closing Time, the Lead Managers shall have received the favorable opinion, dated as of the Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the International Managers, together with signed or reproduced copies of such letter for each of the other International Managers with respect to the matters set forth in (i), (v), (vi) (solely as to preemptive or other similar rights arising by operation of law or under the charter or bylaws of the Company), (viii) through (x), inclusive, (xiv) (solely as to the information in the Prospectuses under "Description of the Capital Stock -- Class A Common Stock and Class B Common Stock") and the penultimate paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Lead Managers. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its Subsidiaries and certificates of public officials. (e) Officers' Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectuses, except as otherwise stated therein or contemplated thereby, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Lead Managers shall have received a certificate of the 21 President, Chief Executive Officer or a Senior Executive Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions set forth herein or contemplated hereby on its part to be performed or satisfied at or prior to the Closing Time and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and to the knowledge of the Company, no proceedings for that purpose have been instituted or are pending or are contemplated by the Commission. (f) Accountant's Comfort Letters. At the time of the execution of this Agreement, the Lead Managers shall have received (i) from Arthur Andersen LLP a letter dated such date, in form and substance satisfactory to the Lead Managers, together with signed or reproduced copies of such letter for each of the other International Managers containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectuses and (ii) from Ernst & Young LLP a letter dated such date, in form and substance satisfactory to the Lead Managers, together with signed or reproduced copies of such letter for each of the other International Managers containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the NWCG Holdings Corporation financial statements and certain financial information contained in the Registration Statement and the Prospectuses. (g) Bring-down Comfort Letters. At the Closing Time, the Lead Managers shall have received from each of Arthur Andersen LLP and Ernst & Young LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time. (h) Approval of Listing. At Closing Time, the Securities shall have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance. (i) No Objection. The NASD shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements. 22 (j) Lock-up Agreement. At the date of this Agreement, the Lead Managers shall have received an agreement substantially in the form of Exhibit C hereto signed by the persons listed on Schedule C hereto. (k) Purchase of Initial U.S. Securities. Contemporaneously with the purchase by the International Managers of the Initial International Securities under this Agreement, the U.S. Underwriters shall have purchased the Initial U.S. Securities under the U.S. Purchase Agreement. (l) Recapitalization and Reorganization. Prior to Closing Time, the Company shall have effected the Recapitalization (as defined and described in the Prospectuses) and consummated the Reorganization (as defined and described in the Prospectuses). (m) Conditions to Purchase of International Option Securities. In the event that the International Managers exercise their option provided in Section 2(b) hereof to purchase all or any portion of the International Option Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company or any subsidiary of the Company hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Lead Managers shall have received: (i) Officers' Certificate. A certificate, dated such Date of Delivery, of the President, Chief Executive Officer or a Senior Executive Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(e) hereof remains true and correct as of such Date of Delivery. (ii) Opinion of Counsel for Company. The favorable opinion of Squadron, Ellenoff, Plesent & Sheinfeld, LLP, counsel for the Company, in form and substance satisfactory to counsel for the International Managers, dated such Date of Delivery, relating to the International Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b) hereof. (iii) Opinion of Regulatory Counsel for Company. The favorable opinion of Hogan & Hartson L.L.P., special counsel for the Company, in form and substance satisfactory to counsel for the International Managers, dated such Date of Delivery, relating to the International Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(c) hereof. 23 (iv) Opinion of Counsel for International Managers. The favorable opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the International Managers, dated such Date of Delivery, relating to the International Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(d) hereof. (v) Bring-down Comfort Letter. A letter from Arthur Andersen LLP, in form and substance satisfactory to the Lead Managers and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the Lead Managers pursuant to Section 5(g) hereof, except that the "specified date" in the letter furnished pursuant to this paragraph shall be a date not more than five days prior to such Date of Delivery. (n) Additional Documents. At the Closing Time and at each Date of Delivery, counsel for the International Managers shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the validity of the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Lead Managers and counsel for the International Managers. (o) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement or, in the case of any condition to the purchase of International Option Securities on a Date of Delivery which is after the Closing Time, the obligations of the several International Managers to purchase the relevant Option Securities may be terminated by the Lead Managers by notice to the Company at any time at or prior to the Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect. SECTION 6. Indemnification. --------------- (a) Indemnification of International Managers. The Company agrees to indemnify and hold harmless each International Manager and each person, if any, who controls any International Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: 24 (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectuses (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of (A) the violation of any applicable laws or regulations of foreign jurisdictions in connection with the offer and sale of the Reserved Securities and (B) any untrue statement or alleged untrue statement of a material fact included in the supplement or prospectus wrapper material distributed in [Insert Applicable Jurisdiction(s)] in connection with the reservation and sale of the Reserved Securities to eligible employees of, and persons having business relations with, the Company or the omission or alleged omission therefrom of a material fact necessary to make the statements therein, when considered in conjunction with the Prospectuses or preliminary prospectuses, not misleading; (iii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission or in connection with any violation of the nature referred to in Section 6(a)(ii)(A) hereof; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and (iv) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission or in connection with any violation of the nature referred to in Section 6(a)(ii)(A) hereof, to the extent that any such expense is not paid under (i), (ii) or (iii) above; 25 provided, however, that this indemnity agreement shall not apply to any loss, - -------- ------- liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any International Manager through the Lead Managers expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430A Informa tion and the Rule 434 Information, if applicable, or any preliminary prospectus or the International. Prospectus (or any amendment or supplement thereto). (b) Indemnification of Company, Directors and Officers. Each International Manager severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or any preliminary international prospectus or the International Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such International Manager through the Lead Managers expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the International Prospectus (or any amendment or supplement thereto). (c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or 26 compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(iii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. (e) Indemnification for Reserved Securities. In connection with the offer and sale of the Reserved Securities, the Company agrees, promptly upon a request, in writing to indemnify and hold harmless the Underwriters from and against any and all losses, liabilities, claims, damages and expenses incurred by them as a result of the failure of any of the Reserved Securities Participants to pay for and accept delivery of Reserved Securities which, by the end of the first business day following the date of this Agreement, were subject to a properly confirmed agreement to purchase. SECTION 7. Contribution. If the indemnification provided for in Section 6 ------------ hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the International Managers on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the International Managers on the other hand in connection with the statements or omissions, or in connection with any violation of the nature referred to in Section 6(a)(ii)(A) hereof, which resulted in such losses, liabilities, 27 claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the International Managers on the other hand in connection with the offering of the International Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the International Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the International Managers, in each case as set forth on the cover of the International Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial public offering price of the International Securities as set forth on such cover. The relative fault of the Company on the one hand and the International Managers on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the International Managers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or any violation of the nature referred to in Section 6(a)(ii)(A) hereof. The Company and the International Managers agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the International Managers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 7, no International Manager shall be required to contribute any amount in excess of the amount by which the total price at which the International Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such International Manager has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 28 No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls an International Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such International Manager, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The International Managers' respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial International. Securities set forth opposite their respective names in Schedule A hereto and not joint. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. -------------------------------------------------------------- All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its Subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any International Manager or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the International Managers. SECTION 9. Termination of Agreement. ------------------------ (a) Termination; General. The Lead Managers may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the International Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Lead Managers, impracticable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the New York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been 29 required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmen tal authority, or (iv) if a banking moratorium has been declared by either Federal or New York authorities. (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full force and effect. SECTION 10. Default by One or More of the International Managers. If ---------------------------------------------------- one or more of the International Managers shall fail at Closing Time or a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Lead Managers shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting International Managers, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Lead Managers shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Securities does not exceed 10% of the number of International Securities to be purchased on such date, each of the non- defaulting International Managers shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting International Managers, or (b) if the number of Defaulted Securities exceeds 10% of the number of International. Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the International Managers to purchase and of the Company to sell the Option Securities to be purchased and sold on such Date of Delivery, shall terminate without liability on the part of any non-defaulting International Manager. No action taken pursuant to this Section shall relieve any defaulting International Manager from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the International Managers to purchase and the Company to sell the relevant International Option Securities, as the case may be, either the Lead Managers or the Company shall have the right to postpone the Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any 30 required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term "International Manager" includes any person substituted for a International Manager under this Section 10. SECTION 11. Notices. All notices and other communications hereunder ------- shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the International Managers shall be directed to the Lead Managers at North Tower, World Financial Center, New York, New York 10281-1201, facsimile (212) 449-1642, attention of Gregg Seibert, Managing Director and Chairman; notices to the Company shall be directed to it at Fox Entertainment Group, Inc., 1211 Avenue of the Americas, New York, NY 10036, facsimile (212) 852-7145, attention of Arthur M. Siskind, Esq., Senior Executive Vice President and General Counsel. SECTION 12. Parties. This Agreement shall each inure to the benefit of ------- and be binding upon the International Managers and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the International Managers and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the International Managers and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any International Manager shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED ---------------------- BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 14. Effect of Headings. The Article and Section headings ------------------ herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 31 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the International Managers and the Company in accordance with its terms. Very truly yours, FOX ENTERTAINMENT GROUP, INC. By:__________________________ Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH INTERNATIONAL ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS INTERNATIONAL MORGAN STANLEY & CO. INTERNATIONAL LIMITED BEAR, STEARNS INTERNATIONAL LIMITED DONALDSON, LUFKIN & JENRETTE INTERNATIONAL J.P. MORGAN SECURITIES LTD. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON BROTHERS INTERNATIONAL LIMITED By:MERRILL LYNCH INTERNATIONAL By:___________________________________ Authorized Signatory For themselves and as Lead Managers of the other International Managers named in Schedule A hereto. 32 SCHEDULE A Number of
Initial Name of International Manager Securities - ----------------------------- ---------- Merrill Lynch International.................... Allen & Company Incorporated................... Goldman, Sachs International................... Morgan Stanley & Co. International Limited..... Bear, Stearns International Limited............ Donaldson, Lufkin & Jenrette International..... J.P. Morgan Securities Ltd..................... NationsBanc Montgomery Securities LLC.......... Salomon Brothers International Limited......... ---------- Total.......................................... 12,750,000 ==========
Sch A - 1 SCHEDULE B FOX ENTERTAINMENT GROUP, INC. 12,750,000 Shares of Class A Common Stock (Par Value $0.01 Per Share) 1. The initial public offering price of the Securities, determined as provided in Section 2, shall be $________. 2. The purchase price per share for the Securities to be paid by the several Underwriters shall be $________, being an amount equal to the initial public offering price set forth above less $________ per share; provided that the purchase price per share for any Option Securities purchased upon the exercise of the over-allotment option described in Section 2(b) shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. Sch B - 1 SCHEDULE C Lock-up Letters 1. The News Corporation Limited, a South Australia corporation. Sch C - 1 Exhibit A FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. (ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and to enter into and perform its obligations under the Purchase Agreements. (iii) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (iv) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectuses in the column entitled "Pro Forma" under the caption "Capitalization" (except for subsequent issu ances, if any, pursuant to the Purchase Agreements or pursuant to the Recapitalization); the shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights arising by operation of law, or under the charter or by-laws of the Company, or, the best knowledge of such counsel, under any agreement to which the Company is a party. (v) The Securities have been duly authorized for issuance and sale to the Underwriters pursuant to the Purchase Agreements and, when issued and delivered by the Company pursuant to the Purchase Agreements against payment of the consideration set forth in the Purchase Agreements, will be validly issued and fully paid and non-assessable and no holder of the A-1 Securities is or will be subject to personal liability by reason of being such a holder. (vi) The issuance of the Securities is not subject to preemptive or other similar rights arising by operation of law, or under the charter or by-laws of the Company or, to the best knowledge of such counsel, under any agreement to which the Company is a party. (vii) Each Subsidiary has been duly organized and is validly existing as a limited liability company, corporation, general partnership or limited partnership, as the case may be, in good standing under the laws of the jurisdiction of its organization, has the requisite limited liability company, corporate or partnership power, as the case may be, and authority to own, lease and operate its properties and to conduct its business as described in the Prospectuses and is duly qualified as a foreign limited liability company, corporation, general partnership or limited partnership, as the case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; all of the issued and outstanding capital stock of each Subsidiary that is a corporation has been duly authorized and validly issued, is fully paid and non-assessable; all of the limited liability company interests and limited partnership interests in each Subsidiary that is a limited liability company or limited partnership are validly issued and fully paid; and except as otherwise described in the Prospectuses and to the best knowledge of such counsel, all such shares and interests are owned by the Company, directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the outstanding shares of capital stock, limited liability company interests or partnership interests of any Subsidiary was issued in violation of the preemptive or similar rights arising by operation of law, or under the certificate of formation, limited liability company agreement, partnership agreement, charter, by-laws or other organizational documents of any Subsidiary or under any agreement filed as an exhibit to the Registration Statement. (viii) The Purchase Agreement has been duly authorized, executed and delivered by the Company. (ix) The Registration Statement, including any Rule 462(b) Registration Statement, has been declared effective under the 1933 Act; any required filing of the Prospectuses pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); and, to A-2 the best knowledge of such counsel, no stop order suspending the effective ness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or threatened by the Commission. (x) The Registration Statement, including any Rule 462(b) Registration Statement, the Rule 430A Information and the Rule 434 Information, as applicable, the Prospectuses and each amendment or supplement to the Registration Statement and Prospectuses as of their respective effective or issue dates (other than the financial statements and supporting schedules included therein or omitted therefrom, as to which such counsel need express no opinion) complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. (xi) If Rule 434 has been relied upon, the Prospectus was not "materially different," as such term is used in Rule 434, from the prospectus included in the Registration Statement at the time it became effective. (xii) The form of certificate used to evidence the Common Stock complies in all material respects with all applicable statutory requirements, with any applicable requirements of the charter and by-laws of the Company and the requirements of the New York Stock Exchange. (xiii) To the best knowledge of such counsel, there is not pending or threatened in writing any action, suit, proceeding, inquiry or investigation, to which the Company or any subsidiary is a party, or to which the property of the Company or any subsidiary is subject, before or brought by any court or governmental agency or body, domestic or foreign, which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in the Purchase Agreements or the performance by the Company of its obligations thereunder. (xiv) The information in the Prospectuses under "Description of Capital Stock", "Reorganization", "Business--Properties", "Business-Legal Proceedings", "Relationship Between the Company and News Corporation", "Certain Arrangements Regarding the Company's Ownership of Other Entities", "Shares Available for Future Sale", and "Certain United States Tax Consequences to Non-United States Holders" and in the Registration Statement under Item 14, to the extent that it constitutes matters of law, summaries of legal matters, the Company's charter and by-laws or A-3 legal proceedings, or legal conclusions, has been reviewed by us and is correct in all material respects. (xv) To the best knowledge of such counsel, there are no statutes or regulations that are required to be described in the Prospectus that are not described as required. (xvi) All descriptions in the Registration Statement of contracts and other documents to which the Company or its subsidiaries are a party are accurate in all material respects; to the best knowledge of such counsel, there are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references thereto are correct in all material respects. (xvii) To the best knowledge of such counsel, neither the Company nor any Subsidiary is in violation of its charter, by-laws, certificate of formation, limited liability company agreement or other organizational documents and no default by the Company or any Subsidiary exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the Prospectuses or filed or incorporated by reference as an exhibit to the Registration Statement. (xviii) Except as previously made or obtained, as the case may be, no Governmental Approval (as defined below) is necessary or required in connection with the due authorization, execution or delivery by the Company of the Purchase Agreements, the performance by the Company of the transactions contemplated thereby or the offering, issuance or sale of the Securities, except such as may be required under state securities or "Blue Sky" laws and the rules and regulations of the National Association of Securities Dealers, Inc.. The term "Governmental Approval" means any filing with, or authorization, approval, consent, license, order, registration, qualification or decree of any Governmental Authority (as defined below) pursuant to Applicable Laws (as defined below). The term "Applicable Laws" means only those laws, rules and regulations of the State of Delaware, State of New York, State of California and of the United States of America which, in such counsel's experience, are ordinarily applicable to transactions of the type contemplated by the Purchase Agreements; provided, however, that Applicable Laws shall not include any matter relating to federal communications law and the rules, regulations and administrative A-4 orders promulgated or proposed for promulgation thereunder. The term "Governmental Authority" means any Delaware, New York, California or federal legislative, judicial, administrative or regulatory body under Applicable Laws. (xix) The execution, delivery and performance of the Purchase Agreements and the consummation of the transactions contemplated in the Purchase Agreements and in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use Of Proceeds") and compliance by the Company with its obligations under the Purchase Agreements do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined in Section 1(a)(x) of the Purchase Agreements) under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to such counsel, to which the Company or any Subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any Subsidiary is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter, by-laws, certificate of formation, limited liability company agreement or other organizational documents of the Company or any Subsidiary, or any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any subsidiary or any of their respective properties, assets or operations. (xx) Each of the Master Intercompany Agreement, the Tax Sharing Agreement and the Indemnity Agreement (each as defined in the Prospectuses) has been duly authorized, executed and delivered by the Company and its Subsidiaries, as applicable, and constitutes the binding agreement of such party, enforceable against such party in accordance with its terms, except as the enforcement thereof may be limited by (i) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfer), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) or (ii) as to any indemnification or contribution provision thereof, by any applicable state or federal securities laws, rules or regulations or by public policy . A-5 (xxi) The Company is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the 1940 Act. Such counsel has participated in conferences with directors, officers and other representatives of the Company, representatives of the independent public accountants for the Company, representatives of the Underwrit ers and representatives of counsel for the Underwriters, at which confer ences the contents of the Registration Statement and the Prospectus and related matters were discussed, and, although counsel has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, nothing has come to such counsel's attention that would lead such counsel to believe that the Registration Statement or any amendment thereto, including the Rule 430A Information and Rule 434 Information (if applicable), at the time such Registration Statement or any such amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectuses or any amendment or supplement thereto, at the time the Prospectuses were issued, at the time any such amended or supplemented prospectus was issued or at the Closing Time, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel expresses no opinion or belief with respect to the financial statements, schedules and other financial data included therein or excluded therefrom. In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal conclusions), to the extent they deem proper on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). The opinion shall relate only to the laws of the State of New York, the corporate laws of the State of Delaware, and the federal laws of the United States of America in force on the date thereof. The opinion is not intended to cover and shall not cover any matter relating to federal communications law and the rules, regulations and administrative order promulgated or proposed for promulgation thereunder. A-6 Exhibit B FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(c) (i) The information in the Prospectus under the captions "Risk Factors - Regulation" and "Business - Regulation," to the extent that such information constitutes a summary of federal communications law and the rules, regulations and administrative orders promulgated or proposed for promulgation thereunder, has been reviewed by such counsel and is correct in all material respects. (ii) Except as previously made or obtained, as the case may be, no filing or registration with, or authorization, approval, consent, license, order, qualification or decree of the FCC is required under the Communications Act of 1934, as amended, and the rules, regulations and administrative orders promulgated thereunder (collectively, the "Federal Communications Laws") in connection with the execution or delivery by the Company of the Purchase Agreements, the performance by the Company of the transactions contemplated thereby or the offering, issuance or sale of the Securities, as applicable, all as of the date hereof. (iii) Except as set forth in the Prospectus, to our knowledge based solely on a review of publicly available files of the FCC in Washington, D.C., neither the Company nor any of its Subsidiaries is in violation of any Federal Communications Law or any order of any court or administrative agency or authority relating thereto which violation would have a Material Adverse Effect. (iv) The Company and the Subsidiaries are the holders of the main commercial television station licenses issued by the FCC listed in Attachment A hereto (the "FCC Licenses"), all of which are in full force and effect, with no material conditions, restrictions or qualifications other than as described in the Registration Statement and the Prospectus, and to our knowledge, such FCC Licenses constitute all of the commercial television station licenses necessary for the Company and the Subsidiaries to own their properties and to conduct their businesses in the manner and to the full extent now operated or proposed to be operated as described in the Prospectus. (v) During the course of preparation of the Registration Statement and Prospectus, we participated in certain discussions with certain officers, employees B-1 and representatives of the Company as to FCC regulatory matters dealt with under the captions "Risk Factors - Regulation" and "Business - Regulation" in the Registration Statement and Prospectus. Although we have not undertaken to determine independently, and we do not assume any responsibility for, the accuracy, completeness, or fairness of the statements under such captions, we may state on the basis of these discussions and our activities as special FCC counsel to the Company in connection with the Registration Statement and Prospectus that no facts have come to our attention that cause us to believe that there are any FCC orders, decrees or rulings outstanding against the Company or any of its Subsidiaries or any pending or threatened actions, suits or proceedings against the Company or any of its Subsidiaries by or before the FCC that seek to revoke, or if determined adversely to the Company or any of its Subsidiaries, would result in a revocation or non-renewal of, any of the FCC Licenses, other than as disclosed in the Registration Statement or Prospectus. B-2 Exhibit C FORM OF LOCK-UP LETTER , 1998 MERRILL LYNCH INTERNATIONAL ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS INTERNATIONAL MORGAN STANLEY & CO. INTERNATIONAL LIMITED BEAR, STEARNS INTERNATIONAL LIMITED DONALDSON, LUFKIN & JENRETTE INTERNATIONAL J.P. MORGAN SECURITIES LTD. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON BROTHERS INTERNATIONAL LIMITED as Lead Managers of the several International Managers c/o Merrill Lynch International Ropemaker Place 25 Ropemaker Street London EC2Y 9LY England Re: Fox Entertainment Group, Inc. ----------------------------- Ladies and Gentlemen: As of the closing of the Offering referred to below, the undersigned will be the beneficial owner of _____ shares of Class A Common Stock, par value $.01 per share (the "Class A Common Stock") and _____ shares of Class B Common Stock, par value $.01 per share (the "Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock") of Fox Entertainment Group, Inc. (the "Company"), a Delaware corporation. The undersigned understands that the Company has filed a Registration Statement on Form S-1 (the "Registration Statement") with the Securities and Exchange Commission for the registration of an aggregate offering price of approximately $ 2,340,000,000 of shares of Class A Common Stock (which includes the aggregate offering price of shares subject to an C-1 over-allotment option) (the "Offering"). The undersigned further understands that you are contemplating entering into a U.S. Purchase Agreement and an International Purchase Agreement (together, the "Purchase Agreements") with the Company in connection with the Offering. All terms not otherwise defined herein shall have the same meanings as in the Purchase Agreements. In recognition of the benefit that such the Offering will confer upon the undersigned as a stockholder of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Purchase Agreements (the "Underwriters") that, during a period of 180 days from the date of the Purchase Agreements, the undersigned will not, without the prior written consent of Merrill Lynch, Pierce Fenner & Smith Incorporated directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer (or announce any offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or other disposition of or transfer of) any shares of the Company's Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) or the power of disposition, or file any registration statement under the Securities Act of 1933, as amended, with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise. C-2 The undersigned, whether or not participating in the offering, confirms that he, she or it understands that the Underwriters and the Company will rely upon the representations set forth in this agreement in proceeding with the Offering. This agreement shall be binding on the undersigned and his, her or its respective successors, heirs, personal representatives and assigns. Very truly yours, ----------------------------------- Name: The foregoing is accepted and agreed to as of the date first above written: MERRILL LYNCH INTERNATIONAL ALLEN & COMPANY INCORPORATED GOLDMAN, SACHS INTERNATIONAL MORGAN STANLEY & CO. INTERNATIONAL LIMITED BEAR, STEARNS INTERNATIONAL LIMITED DONALDSON, LUFKIN & JENRETTE INTERNATIONAL J.P. MORGAN SECURITIES LTD. NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON BROTHERS INTERNATIONAL LIMITED By: _____________________________ Authorized Signatory For themselves and as Representatives of the other Underwriters. C-3 EX-3.1 4 FORM OF RESTATED CERTIFICATE OF INCORP. OF THE COMPANY EXHIBIT 3.1 FORM OF RESTATED CERTIFICATE OF INCORPORATION OF FOX ENTERTAINMENT GROUP, INC. The name of the corporation (which is hereinafter referred to as the "Corporation") is "Fox Entertainment Group, Inc." The original Certificate of Incorporation (the "Certificate of Incorporation") was filed with the Secretary of State of the State of Delaware on May 7, 1985, under the name "Twentieth Holdings Corporation." Such certificate of incorporation was amended on November 14, 1985 and August 11, 1998. This Restated Certificate of Incorporation, which restates, integrates and amends the Certificate of Incorporation, has been duly adopted in accordance with Sections 103, 242 and 245 of the General Corporation Law of the State of Delaware. The text of the Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows: ARTICLE I The name of this corporation (hereinafter called the "Corporation") is: FOX ENTERTAINMENT GROUP, INC. ARTICLE II The purpose or purposes of this Corporation shall be to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "DGCL"). ARTICLE III The name and address of the Corporation's registered agent in the State of Delaware is Corporation Service Company, 1013 Centre Road, in the City of Wilmington, County of New Castle, Delaware 19805. -1- ARTICLE IV CAPITAL STOCK SECTION 1. AUTHORIZED STOCK; NO PRE-EMPTIVE RIGHTS. The maximum number of shares of capital stock which this Corporation shall have authority to issue is one billion seven hundred fifty million ten thousand (1,750,000,000) consisting of one billion (1,000,000,000) shares of class A common stock, $.01 par value per share (the "Class A Common Stock"), six hundred fifty million (650,000,000) shares of class B common stock, $.01 par value per share (the "Class B Common Stock") and one hundred million (100,000,000) shares of preferred stock, $.01 par value per share (the "Preferred Stock"). The Class A Common Stock and the Class B Common Stock are hereinafter referred to collectively as the "Common Stock." The holders of shares of capital stock now or hereafter outstanding shall have no pre-emptive right to purchase or have offered to them for purchase any shares of Preferred Stock, Common Stock or other equity securities issued or to be issued by the Corporation. The powers, preferences and rights and the qualifications, limitations and restrictions in respect of the shares of each class are set forth in the following Sections. SECTION 2. PREFERRED STOCK. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly authorized, by resolution or resolutions, to provide for the issuance of up to 100,000,000 shares of Preferred Stock in one or more series and, by filing a certificate pursuant to the DGCL (hereinafter referred to as a "Preferred Stock Designation"), to establish from time to time the number of shares constituting each such series and the designation of such series, the voting powers (if any) of the shares of such series, and the relative rights, powers, privileges, preferences and limitations of the shares of such series. Shares of Preferred Stock, regardless of series, that are converted into other securities or other consideration shall be retired and canceled and the Corporation shall take all such actions as are necessary to cause such shares to have the status of authorized but unissued shares of Preferred Stock, without designation as to series. SECTION 3. COMMON STOCK. A. VOTING RIGHTS. Subject to applicable law and the rights of any outstanding series of Preferred Stock to vote as a separate class or series, the shares of Class A Common Stock and Class B Common Stock shall vote together as a single class and shall have the following voting rights: (i) each share of Class A Common Stock shall entitle the holder thereof to one (1) vote upon all matters upon which stockholders shall have the right to vote; and (ii) each share of Class B Common Stock shall entitle the holder thereof to ten (10) votes upon all matters upon which stockholders shall have the right to -2- vote, subject to Section 3.E.8. of this Article IV. The authorized number of shares of Class A Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding or reserved for issuance upon conversion of the Class B Common Stock or any other class or series of outstanding Stock) by the affirmative vote of the holders of Common Stock entitled to cast a majority of the total votes entitled to be cast by the holders of the Common Stock, voting as a single class, without a separate class vote of the holders of the Class A Common Stock. The Corporation may, as a condition to counting the votes cast by any holder of shares of Class B Common Stock, require proof as set forth in Section 3.E.8 of this Article IV that the shares of Class B Common Stock held by such holder have not been converted into shares of Class A Common Stock. B. DIVIDENDS AND DISTRIBUTIONS. Subject to the preferential and other dividend rights of any outstanding series of Preferred Stock, holders of Class A Common Stock and Class B Common Stock shall be entitled to such dividends and other distributions in cash, stock or property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor. No dividend or other distribution may be declared or paid on any share of Class A Common Stock unless a like dividend or other distribution is simultaneously declared or paid, as the case may be, on each share of Class B Common Stock, nor shall any dividend or other distribution be declared or paid on any share of Class B Common Stock unless a like dividend or other distribution is simultaneously declared or paid, as the case may be, on each share of Class A Common Stock, in each case without preference or priority of any kind; provided, however, that all dividends and distributions on the -------- ------- Class A Common Stock and Class B Common Stock payable in shares of Common Stock of the Corporation shall be made in shares of Class A Common Stock and Class B Common Stock, respectively. In no event will shares of either class of Common Stock be split, divided or combined unless the outstanding shares of the other class of Common Stock shall be proportionately split, divided or combined. In the event of a transaction as a result of which the shares of Class A Common Stock are converted into or exchanged for one or more other securities, cash or other property (a "Class A Conversion Event"), then from and after such Class A Conversion Event, a holder of Class B Common Stock shall be entitled to receive, upon the conversion of such Class B Common Stock pursuant to Section 3.E. of this Article IV, the amount of such securities, cash and other property that such holder would have received if the conversion of such Class B Common Stock had occurred immediately prior to the record date (or if there is no record date, the effective date) of the Class A Conversion Event and if the securities, cash or other property that the Class A Common Stock may be converted into or exchanged for in a Class A Conversion Event is dependant upon the holder of the Class A Common Stock making an election, the holder of the Class A Common Stock had failed to make an election. This paragraph shall be applicable in the same manner to all successive conversions or exchanges of securities issued pursuant to any Class A Conversion Event. No adjustments in respect of dividends shall be made upon the conversion of any share of Class B Common Stock; provided, however, that if a share shall be converted after the -------- ------- record date for the payment of a dividend or other distribution on shares of Class B Common Stock but before such -3- payment, then the record holder of such share at the close of business on such record date shall be entitled to receive the dividend or other distribution payable on such share of Class B Common Stock on the payment date notwithstanding the conversion thereof. C. OPTIONS, RIGHTS OR WARRANTS. Subject to Section 3.B. of this Article IV, the Corporation shall not and shall not be entitled to issue additional shares of Class B Common Stock, or issue options, rights or warrants to subscribe for or purchase additional shares of Class B Common Stock, except that the Corporation may make a pro rata offer to all holders of Common Stock of rights to subscribe for additional shares of the class of Common Stock held by them. The Corporation may make offerings of options, rights or warrants to subscribe for or purchase shares of any class or classes of capital stock (other than Class B Common Stock) to all holders of Class A Common Stock or Class B Common Stock if an identical offering is made simultaneously to all the holders of the other class of Common Stock. All offerings of options, rights or warrants shall offer the respective holders of Class A Common Stock and Class B Common Stock the right to subscribe or purchase at the same consideration per share. D. MERGER OR CONSOLIDATION. In the event of a merger or consolidation of the Corporation with or into another entity (whether or not the Corporation is the surviving entity), the holders of each share of Class A Common Stock and Class B Common Stock shall be entitled to receive the same per share consideration as the per share consideration, if any, received by the holders of each share of the other class of Common Stock; provided that, if such consideration shall consist in any part -------- of voting securities (or of options, rights or warrants to purchase, or of securities convertible into or exchangeable for, voting securities), then the Corporation may provide in the applicable merger or such other agreement for the holders of shares of Class B Common Stock to receive, on a per share basis, voting securities with ten (10) times the number of votes per share as those voting securities to be received by the holders of shares of Class A Common Stock (or options, rights or warrants to purchase, or securities convertible into or exchangeable for, voting securities with ten (10) times the number of votes per share as those voting securities issuable upon exercise of the options, rights or warrants to be received by the holders of the shares of Class A Common Stock, or into which the convertible or exchangeable securities to be received by the holders of the shares of Class A Common Stock may be converted or exchanged). E. CONVERSION OF CLASS B COMMON STOCK. 1. VOLUNTARY CONVERSION. Each share of Class B Common Stock shall be convertible, at the option of its record holder, into one validly issued, fully paid and non- assessable share of Class A Common Stock at any time. 2. VOLUNTARY CONVERSION PROCEDURE. -4- At the time of a voluntary conversion, the record holder of shares of Class B Common Stock shall deliver to the principal office of the Corporation or any transfer agent for shares of the Class A Common Stock (i) the certificate or certificates representing the shares of Class B Common Stock to be converted, duly endorsed in blank or accompanied by proper instruments of transfer, and (ii) written notice to the Corporation stating that the record holder elects to convert such share or shares and stating the name or names and denominations in which the certificate or certificates representing the shares of Class A Common Stock issuable upon the conversion are to be issued and including instructions for the delivery thereof. Conversion shall be deemed to have been effected at the time when delivery is made to the principal office of the Corporation or the office of any transfer agent for shares of Class A Common Stock of such written notice and the certificate or certificates representing the shares of Class B Common Stock to be converted, and as of such time, each Person (as hereinafter defined) named in such written notice as the Person to whom a certificate representing shares of Class A Common Stock is to be issued shall be deemed to be the holder of record of the number of shares of Class A Common Stock to be evidenced by that certificate. Upon such delivery, the Corporation or its transfer agent shall promptly issue and deliver a certificate or certificates representing the number of shares of Class A Common Stock to which such record holder is entitled by reason of such conversion, and shall cause such shares of Class A Common Stock to be registered in the name of the record holder. 3. AUTOMATIC CONVERSION. (a) Subject to Section 3.E.3.(b) of this Article IV, in the event of any Transfer (as hereinafter defined) of any share of Class B Common Stock to any Person other than a Permitted Transferee (as hereinafter defined), such share of Class B Common Stock shall automatically, without any further action, convert into one share of Class A Common Stock. (b) Notwithstanding anything to the contrary set forth in this Article IV, Section 3, a holder of shares of Class B Common Stock may pledge such holder's shares of Class B Common Stock to a financial institution pursuant to a bona fide pledge of such shares of Class B Common Stock as collateral security for any indebtedness or other obligation of any Person (the "Pledged Stock") due to the pledgee or its nominee; provided, however, that --------- ------- (i) such shares shall not be voted by or registered in the name of the pledgee and shall remain subject to the provisions of this Article IV, Section 3.E. and (ii) upon any foreclosure, realization or other similar action by the pledgee, such Pledged Stock shall automatically convert into shares of Class A Common Stock on a share for share basis unless all right, title and interest in such Pledged Stock shall be Transferred concurrently by the pledgee or its nominee or the purchaser in such foreclosure to a Permitted Transferee. (c) The foregoing automatic conversion events described in this Article IV, Section 3.E.3 shall be referred to hereinafter as an "Event of Automatic Conversion." The determination of whether an Event of Automatic Conversion shall have occurred will be made by the Board of Directors or a duly authorized committee thereof in accordance with Article IV, Section 3.E.8 below. -5- 4. AUTOMATIC CONVERSION PROCEDURE. Any conversion pursuant to an Event of Automatic Conversion shall be deemed to have been effected at the time the Event of Automatic Conversion occurred (the "Conversion Time"). At the Conversion Time, the certificate or certificates that represented immediately prior thereto the shares of Class B Common Stock which were so converted (the "Converted Class B Common Stock") shall, automatically and without further action, represent the same number of shares of Class A Common Stock. Holders of Converted Class B Common Stock shall deliver their certificates, duly endorsed in blank or accompanied by proper instruments of transfer, to the principal office of the Corporation or the office of any transfer agent for shares of the Class A Common Stock, together with a written notice setting out the name or names (with addresses) and denominations in which the certificate or certificates representing such shares of Class A Common Stock are to be issued and including instructions for delivery thereof. Upon such delivery, the Corporation or its transfer agent shall promptly issue and deliver at such stated address to such holder of shares of Class A Common Stock a certificate or certificates representing the number of shares of Class A Common Stock to which such holder is entitled by reason of such conversion, and shall cause such shares of Class A Common Stock to be registered in the name of such holder. The Person entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Class A Common Stock at and as of the Conversion Time, and the rights of such Person as a holder of shares of Class B Common Stock that have been converted shall cease and terminate at and as of the Conversion Time, in each case without regard to any failure by such holder to deliver the certificates or the notice required by this Section. 5. UNCONVERTED SHARES. In the event of the conversion of less than all the shares of Class B Common Stock evidenced by a certificate surrendered to the Corporation in accordance with the procedures of this Section 3.E., the Corporation shall execute and deliver to, or upon the written order of, the holder of such unconverted shares, without charge to such holder, a new certificate evidencing the number of shares of Class B Common Stock not converted. 6. RETIRED SHARES. Shares of Class B Common Stock that are converted into shares of Class A Common Stock as provided herein shall be retired and canceled and the Corporation shall take all such actions as are necessary to cause such shares to have the status of authorized but unissued shares of Class B Common Stock. 7. RESERVATION. The Corporation shall at all times reserve and keep available, out of its authorized and unissued shares of Class A Common Stock, for the purposes of effecting conversions, -6- such number of duly authorized shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock. All the shares of Class A Common Stock so issuable shall, when so issued, be duly and validly issued, fully paid and non-assessable, and free from liens and charges with respect to such issuance. 8. DETERMINATION OF VOTING RIGHTS AND EVENT OF AUTOMATIC CONVERSION. The Board of Directors of the Corporation or a duly authorized committee thereof shall have the power to determine, in good faith after reasonable inquiry, whether an Event of Automatic Conversion has occurred with respect to any share of Class B Common Stock. A determination by the Board of Directors of the Corporation or such committee that an Event of Automatic Conversion has occurred shall be conclusive. As a condition to counting the votes cast by any holder of shares of Class B Common Stock at any annual or special meeting of stockholders, or in connection with any written consent of stockholders, or as a condition to registration of transfer of shares of Class B Common Stock, or for any other purpose, the Board of Directors or a duly authorized committee thereof, in its discretion, may require the holder of such shares to furnish such affidavits or other proof as the Board of Directors or such committee deems necessary or advisable to determine whether an Event of Automatic Conversion shall have occurred. If the Board of Directors or such committee shall determine that a holder has substantially failed to comply promptly with any request by the Board of Directors or such committee for such proof, the shares held by such holder shall be entitled to one (1) vote per share until such time as the Board of Directors or such committee shall determine that such holder has complied with such request. The Board of Directors or a duly authorized committee thereof may exercise the authority granted by this Article IV, Section 3.E.8 through duly authorized officers or agents of the Corporation. 9. DEFINITIONS. For purposes of this Article IV, Section E: (a) Beneficial Owner. ---------------- A Person shall be deemed the "Beneficial Owner" of, and to "Beneficially Own" and to have "Beneficial Ownership" of, any share (i) which such Person has the power to vote or dispose, or to direct the voting or disposition of, directly or indirectly, through any agreement, arrangement or understanding (written or oral), or (ii) which such Person has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (written or oral), or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise. (b) Nominee. ------- -7- The term "Nominee" shall mean a Person that is acting as a bona fide nominee for the registration of record ownership of securities Beneficially Owned by another Person. (c) Permitted Transferee. -------------------- The term "Permitted Transferee" shall mean The News Corporation Limited , a South Australia corporation ("News Corporation"), its direct and indirect subsidiaries; any Person in which News Corporation or any successor thereof Beneficially Owns, directly or indirectly, at least 50% of the equity or the voting securities thereof; and any successor of any of the foregoing. (d) Person. ------ The term "Person" means any natural person, corporation, association, partnership, limited liability company, organization, business, government or political subdivision thereof or governmental agency. (e) Transfer. -------- The term "Transfer" shall mean any sale, transfer (including a transfer made in whole or in part without consideration as a gift), exchange, assignment, pledge, encumbrance, alienation or any other disposition or hypothecation of record ownership or of Beneficial Ownership of any share, whether by operation of law or otherwise; provided, however, that (i) a pledge of any share made in accordance with the provisions of Article IV, Section 3.E.3.(b). and (ii) a grant of a revocable proxy, written consent or other authorization with respect to any share to a Person designated by the Board of Directors or management of the Corporation who is soliciting proxies on behalf of the Corporation shall not be considered a "Transfer"; and provided, -------- further, that in the case of any transferee of record ownership that ------- is a Nominee, such Transfer of record ownership shall be deemed to be made to the Person or Persons for whom such Nominee is acting. 10. STOCK LEGEND. The Corporation shall include a legend on the certificates representing shares of Class B Common Stock stating the such shares are subject to automatic conversion in certain circumstances as set forth in this Article IV, Section 3.E. 11. TAXES. The issuance of a certificate representing shares of Class A Common Stock issued upon conversion of shares of Class B Common Stock shall be made without charge to the holder of such shares for any stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the record holder -8- of the shares of Class B Common Stock converted, the Person or Persons requesting the issuance thereof shall pay to the Corporation the amount of any tax which may be payable in respect of any Transfer involved in such issuance or shall establish to the satisfaction of the Corporation that such tax has been paid or is not required to be paid. F. LIQUIDATION. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after distribution in full of the preferential and/or other amounts to be distributed to the holders of shares of any outstanding series of Preferred Stock, the holders of shares of Class A Stock and Class B Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock held by them. In any such distribution shares of Class A Common Stock and Class B Common Stock shall be treated equally on a per share basis. ARTICLE V PURCHASE OF SHARES BY CORPORATION The Corporation may purchase any shares of outstanding capital stock of the Corporation or the right to purchase any such shares of capital stock from any holder thereof on terms and conditions established by the Board of Directors or a duly authorized committee thereof. ARTICLE VI BOARD OF DIRECTORS SECTION 1. NUMBER AND TERMS. Except as otherwise fixed by or pursuant to the provisions of this Restated Certificate of Incorporation relating to the rights of the holders of any class or series of Preferred Stock, the number of directors of the Corporation shall be determined by resolution adopted by a majority of the entire Board of Directors, but the number shall not be less than three. The term of each director of the Corporation shall expire at the next annual meeting of stockholders following such director's election and until such director's successor shall have been elected and qualified. Except with respect to any directors elected by the holders of any class or series of Preferred Stock pursuant to the terms of this Restated Certificate of Incorporation, at each annual meeting of the stockholders of the Corporation, the date of which shall be fixed by or in the manner provided in the By-laws of the Corporation, the successors of the directors whose term expires at that meeting shall be elected to hold office for a term expiring at the next succeeding annual meeting of stockholders. No decrease in the number of directors shall shorten the term of any incumbent director. Unless and except to the extent that the By-laws of the Corporation shall so require, the election of directors need not be by written ballot. -9- SECTION 2. VACANCIES. Except as otherwise provided for or fixed by or pursuant to the provisions of this Restated Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock, any vacancy on the Board of Directors of the Corporation resulting from death, resignation, removal or other cause and any newly created directorship resulting from any increase in the authorized number of directors between meetings of stockholders shall be filled only by the affirmative vote of (i) a majority of all the directors then in office, even though less than a quorum, or (ii) a duly appointed committee of the Board of Directors, but in any event not by the stockholders. Any director so chosen shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred or the new directorship was created and until a successor is duly elected and qualified or until his or her earlier death, resignation or removal from office in accordance with this Restated Certificate of Incorporation or any applicable law or pursuant to an order of a court. If there are no directors in office, then an election of directors may be held in the manner provided by applicable law. SECTION 3. NOTICE. Advance notice of nominations for the election of directors and business to be transacted at any stockholders meeting shall be given in the manner and to the extent provided in the By-laws of the Corporation. SECTION 4. REMOVAL. Except as otherwise provided for or fixed by or pursuant to the provisions of this Restated Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock, any director may be removed from office with or without cause but only by the affirmative vote of the holders of a majority of the combined voting power of the then outstanding shares of stock of the Corporation entitled to vote for the election of directors, voting together as a single class. ARTICLE VII Stockholder Action; No Cumulative Voting SECTION 1. MEETINGS. Subject to the rights of the holders of any outstanding series of Preferred Stock, special meetings of stockholders of the Corporation may be called only by the Board of Directors by the Chairman of the Board or the Vice Chairman of the Board of the Corporation. Notwithstanding the foregoing, whenever the holders of any one or more outstanding series of Preferred Stock shall have the right, voting separately by class or series, as applicable, to elect directors at an annual or special meeting of stockholders, the calling of special meetings of the holders of such class or series shall be governed by the terms of the applicable resolution or resolutions of the Board of Directors -10- establishing such series of Preferred Stock pursuant to Article IV of this Restated Certificate of Incorporation. ARTICLE VIII By-laws The Board of Directors shall have the power to adopt, alter, amend or repeal the By-laws of the Corporation. The stockholders of the Corporation may adopt, amend or repeal the By-laws of the Corporation but only by the affirmative vote of holders of at least a majority of the combined voting power of the then outstanding shares of capital stock of all classes and series of the Corporation entitled to vote generally on matters requiring the approval of stockholders, voting together as a single class. ARTICLE IX Amendments The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article IX. ARTICLE X Indemnification; Limitation of Liability. SECTION 1. INDEMNIFICATION. A. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director of the Corporation or any of its direct or indirect subsidiaries or is or was serving at the request of the Corporation as a director of any other corporation or of a partnership, limited liability company, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director or in any other capacity while serving as a director, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such -11- amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability, and loss (including attorneys' fees, judgments, fines, excise or other taxes assessed with respect to an employee benefit plan, penalties, and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a director and shall inure to the benefit of the indemnitee's heirs, executors, and administrators; provided, however, that, except as provided in Paragraph B -------- ------- of this Section 1 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. B. The right to indemnification conferred in Paragraph A of this Section 1 shall include the right to be paid by the Corporation the expenses incurred in defending any proceeding for which such right to indemnification is applicable in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the DGCL requires, an advancement of expenses - -------- ------- incurred by an indemnitee in his or her capacity as a director (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section 1 or otherwise. C. The rights to indemnification and to the advancement of expenses conferred in Paragraphs A and B of this Section 1 shall be contract rights. If a claim under Paragraph A or B of this Section 1 is not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by an indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL, and (ii) any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee to enforce a right to -12- indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section 1 or otherwise, shall be on the Corporation. D. The rights to indemnification and to the advancement of expenses conferred in this Section 1 shall not be exclusive of any right which any person may have or hereafter acquire under any statute, this certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors, or otherwise. E. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the DGCL. F. The Corporation's obligation, if any, to indemnify any person who was or is serving as a director of any direct or indirect subsidiary of the Corporation or, at the request of the Corporation, of any other corporation or of a partnership, joint venture, trust, or other enterprise shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust or other enterprise. G. Any repeal or modification of the foregoing provisions of this Section 1 shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. H. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant indemnification rights and rights to the advancement of expenses to any officer, employee or agent of the Corporation to the fullest extent of the provision of this Article with respect to the indemnification and advancement of expenses to directors. SECTION 2. LIMITED LIABILITY. No director of the Corporation shall be liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, provided that this provision does not eliminate the liability of the director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of Title B of the Delaware Code, or (iv) for any transaction from which the director derived an improper personal benefit. For purposes of the prior sentence, the term "damages" shall, to the extent permitted by law, include without limitation, any judgment, fine amount paid in settlement, penalty, punitive damages, excise or other tax assessed with respect to an employee benefit plan, or expense of any nature (including, without limitation, counsel fees and disbursements). Each person who serves as a director of the Corporation while this Section 2 is in effect shall be deemed to be doing so in reliance on the provisions of this Section 2, and neither the amendment or repeal of this Section 2, nor the -13- adoption of any provision of this Restated Certificate of Incorporation inconsistent with this Section 2, shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for, arising out of, based upon, or in connection with any acts or omissions of such director occurring prior to such amendment, repeal, or adoption of an inconsistent provision. The provisions of this Section 2 are cumulative and shall be in addition to and independent of any and all other limitations on or eliminations of the liabilities of directors of the Corporation, as such, whether such limitation or eliminations arise under or are created by any law, rule, regulation, by-law, agreement, vote of stockholders or disinterested directors, or otherwise. ARTICLE XI Miscellaneous SECTION 1. Section 203 of the DGCL The Company hereby elects that it shall not be subject to Section 203 of the DGCL or any successor provision. IN WITNESS WHEREOF, Fox Entertainment Group, Inc. has caused this Restated Certificate of Incorporation to be signed by its ___________ this _______ day of _________, 1998. Fox Entertainment Group, Inc. By:__________________________________________ Name: Title: -14- EX-3.2 5 FORM OF BY-LAWS OF THE COMPANY EXHIBIT 3.2 FORM OF Fox Entertainment Group, Inc. (hereinafter called the "Corporation") AMENDED BY-LAWS ARTICLE I - STOCKHOLDERS ------------------------ Section 1. Annual Meeting. ---------- ---------------- The Annual Meeting of the stockholders for the purpose of electing Directors and for the transaction of such other business as may properly come before the meeting in accordance with these By-laws, shall be held at such place, on such date, and at such time as may be fixed by the Board of Directors (hereinafter the "Board") and stated in the notice of meeting. (a) Nominations of persons for election to the Board and the proposal of business to be transacted by the stockholders may be made at an Annual Meeting of stockholders (a) pursuant to the Corporation's notice with respect to such meeting, (b) by or at the direction of the Board or (c) by any stockholder of record of the Corporation who was a stockholder of record at the time of the giving of the notice provided for in the following paragraph, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this section. (b) For nominations or other business to be properly brought before an Annual Meeting by a stockholder pursuant to clause (c) of the foregoing paragraph, (1) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation; (2) such business must be a proper matter for stockholder action under the General Corporation -1- Law of the State of Delaware; (3) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the Corporation with a Solicitation Notice, as that term is defined in subclause (c)(iii) of this paragraph, such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation's voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the Corporation's voting shares reasonably believed by such stockholder or beneficial holder to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice; and (4) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this section. To be timely, a stockholder's notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not less than 45 or more than 75 days prior to the first anniversary (the "Anniversary") of the date on which the Corporation first mailed its proxy materials for the preceding year's Annual Meeting of stockholders; provided, however, that if the date of the Annual Meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year's Annual Meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of (i) the 90th day prior to such Annual Meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made. Such stockholder's notice shall set forth -2- (a) as to each person whom the stockholder proposes to nominate for election or reelection as a Director all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such person's written consent to serve as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner, (ii) the class and number of shares of the Corporation that are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of the Corporation's voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the Corporation's voting shares to elect such nominee or nominees (an affirmative statement of such intent, a "Solicitation Notice"). Notwithstanding anything in the second sentence of the preceding paragraph of this Section (b) to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least 55 days prior to the Anniversary, a stockholder's notice required by this By-law shall also be considered timely, but -3- only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. Only persons nominated in accordance with the procedures set forth in this Section (b) shall be eligible to serve as directors and only such business shall be conducted at an Annual Meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section (b). The chair of the meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance with the procedures set forth in these By-laws and, if any proposed nomination or business is not in compliance with these By-laws, to declare that such defective proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected (a) by or at the direction of the Board or (b) by any stockholder of record of the Corporation who is a stockholder of record at the time of giving of notice provided for in this paragraph, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section (b). Nominations by stockholders of persons for election to the Board may be made at such a special meeting of stockholders if the stockholder's notice required by the first paragraph of this Section (b) shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such -4- meeting. For purposes of this section, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Notwithstanding the foregoing provisions of this Section (b), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section (b). Nothing in this Section (b) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. Section 2. Special Meetings; Notice. ---------- ------------------------- Special meetings of the stockholders, other than those required by statute, may be called at any time by the Board pursuant to a resolution approved by a majority of the Board or by the Chairman or a Vice Chairman. No other person or persons may call special meetings of stockholders except as provided in the Certificate of Incorporation. Notice of every special meeting, stating the place, date and time of the meeting and the purpose or purposes for which such meeting is called shall be given by mailing, postage prepaid, not less than 10 nor more than 60 days before the date on which the meeting is to be held, a copy of such notice addressed to each stockholder of the Corporation entitled to vote at such meeting at his address as recorded on the books of the Corporation. Only such business as is stated in the notice may be acted upon thereat. The foregoing notwithstanding, unless otherwise provided in the Certificate of Incorporation, whenever the holders of any one or more outstanding series of Preferred Stock -5- shall have the right, voting separately by class or by series, as applicable, to elect directors at any Annual Meeting or special meeting of stockholders, the calling of special meetings of the holders of such class or series shall be governed by the terms of the applicable resolution or resolutions of the Board establishing such series of preferred stock pursuant to the Certificate of Incorporation. The Board may postpone or reschedule any previously scheduled special meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which Directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board, or (b) by any stockholder of record of the Corporation who is a stockholder of record at the time of the giving of notice provided for in Section1(b) of this ARTICLE I entitled to vote at the meeting who complies with the notice provisions set forth in Section1(b) of this ARTICLE I. -6- Section 3. Notice of Meetings. ---------- ------------------- Except as otherwise provided herein or required by applicable law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law) or the Certificate of Incorporation, written notice of the place, date, and time of all meetings of the stockholders and the purpose or purposes for which such meeting is called shall be given by mailing, postage prepaid, a copy of such notice addressed to each stockholder of the Corporation entitled to vote at such meeting at his address as recorded on the books of the Corporation, not less than 10 nor more than 60 days before the date on which the meeting is to be held. When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than 30 days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. Section 4. Quorum. ---------- ------- At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law or by the Certificate of Incorporation. Where a separate vote by a class or classes is required by law or by the Certificate of Incorporation, a majority of the shares of such class or classes present in person or represented by proxy shall constitute a quorum -7- entitled to take action with respect to that vote on that matter. If a quorum shall fail to attend any meeting, the chairman of the meeting may adjourn the meeting from time to time, without notice other than by announcement to the meeting, to another date, place and time until a quorum shall be present. Section 5. Organization. ---------- ------------- The Chairman of the Board of the Corporation, or, in his or her absence, such person as the Board may have designated or, in the absence of such a person, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or represented by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. The Secretary of the Corporation, or if he or she is not present, any Assistant Secretary, or in the absence of any Assistant Secretary of the Corporation, any person the chairman of the meeting appoints shall act as the Secretary of the meeting. Section 6. Place of Meetings. ---------- ------------------ Meetings of the stockholders for the election of Directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 7. Conduct of Business. ---------- -------------------- The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. The Board may adopt by resolution such rules and regulations for the conduct of meetings as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the -8- Board, the chairman of any meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of the chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business at the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. Section 8. Proxies and Voting. ---------- ------------------- At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Unless otherwise provided in the Certificate of Incorporation, each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of capital stock entitled to vote thereat held by such stockholder. If the Certificate of Incorporation provides for the issuance of any class or series of stock which is convertible into any other class or series of stock, as a condition to counting the votes cast by any holder of shares at any annual or special meeting of stockholders, the Board -9- or a duly authorized committee thereof, in its discretion, may require the holder of any shares to furnish such affidavits or other proof as the Board or such committee deems necessary and advisable to determine whether such shares have been converted pursuant to the terms governing the issuance and conversion of such shares in the Certificate of Incorporation. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. All voting, except as may be required by law, including voting for the election of Directors may be by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote or by his or her proxy, or upon resolution by the Board in its discretion or by action of the chairman of the meeting, in his or her discretion, a stock vote may be taken. Every stock vote shall be taken by written ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. Unless otherwise specified by the Certificate of Incorporation or these By- laws, (i) at all meetings of stockholders for the election of Directors, a plurality of the votes cast shall be sufficient to elect, and (ii) any other question brought before any meeting of stockholders shall be determined by the votes cast affirmatively or negatively by the holders of a majority of the stock represented and entitled to vote thereon. -10- Section 9. Stock List. ---------- ----------- The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock, the list required by this Section 9 of this ARTICLE I or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders. Section 10. Inspection of Elections. ----------- ------------------------ Before any meeting of stockholders, the Board shall appoint one or more inspectors to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. -11- The inspectors shall, in accordance with these By-laws and the Certificate of Incorporation, ascertain the number of shares outstanding and the voting power of each, determine the shares represented at the meeting and the validity of proxies and ballots, count all votes and ballots, determine and retain for a reasonable period a record of the disposition of any challenges made to any determination made by the inspectors, and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. In determining the validity and counting of proxies and ballots, the inspectors shall act in accordance with applicable law. ARTICLE II - BOARD OF DIRECTORS ------------------------------- Section 1. Number, Election and Term of Directors. ---------- --------------------------------------- The property and business of the Corporation shall be managed by or under the direction of the Board. Except as otherwise fixed by or pursuant to the provisions of the Certificate of Incorporation relating to the rights of the holders of any class or series of preferred stock, the number of Directors of the corporation shall be determined by resolution adopted by a majority of the entire Board, but the number shall not be less than 3 and not more than 25. Directors need not be stockholders. Directors shall (except as hereinafter provided for the filling of vacancies) be elected by the holders of the shares of stock entitled to vote thereon, by a plurality vote thereof, at the Annual Meeting of stockholders. The term of each Director of the Corporation shall expire at the next Annual Meeting of stockholders following such Director's election and until such Director's successor shall have been elected and qualified. Except with -12- respect to any Directors elected by the holders of any class or series of preferred stock pursuant to the terms of the Certificate of Incorporation, at each Annual Meeting of the stockholders of the Corporation, the successors of the Directors shall be elected to hold office for a term expiring at the next succeeding Annual Meeting of stockholders. The Board may at any time by amendment of the By-laws increase or decrease the number of Directors of the Corporation; provided, that the term of a Director shall not be affected by any decrease in the number of Directors so made by the Board. Section 2. Newly Created Directorships and Vacancies. ---------- ------------------------------------------ Subject to applicable law and except as otherwise provided for or fixed by or pursuant to the Certificate of Incorporation relating to the rights of the holders of any series of preferred stock with respect to such series of preferred stock, and unless the Board otherwise determines, newly created Directorships resulting from any increase in the authorized number of Directors or any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause between meetings of stockholders shall be filled only by the affirmative vote of a majority of all of the Directors then in office, even though less than a quorum, or a duly appointed committee of the Board of Directors, but in any event not by the stockholders. Directors so chosen shall hold office until such Director's successor shall have been duly elected and qualified or until his earlier death, resignation or removal from office in accordance with the Certificate of Incorporation, these By-laws, or any applicable law or pursuant to an order of a court. No decrease in the number of authorized Directors constituting the entire Board shall shorten the term of any incumbent Director. The powers of Directors to fill vacancies in the Board are subject, in case the remaining Directors shall constitute less than a -13- majority of the entire Board, to the rights of stockholders as provided in the Certificate of Incorporation or as provided by law. Section 3. Regular Meetings. ---------- ----------------- A meeting of the Board shall be held after the Annual Meeting of the stockholders and regular meetings of the Board shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board and publicized among all Directors. Meetings may be held either within or without the State of Delaware. A notice of each regular meeting shall not be required. Section 4. Special Meetings. ---------- ----------------- Special meetings of the Board may be called by the Chairman of the Board, by the Vice Chairman, by the President or by two or more Directors then in office and shall be held at such place, on such date, and at such time as they or he or she shall fix. Meetings may be held either within or without the State of Delaware. Notice thereof, stating the place, date and time of each such special meeting shall be given each Director by whom it is not waived by mailing written notice not less than four days before the meeting or personally by telephone, or telegraph or telex, facsimile transmission of notice, or by similar means of communication not less than 12 hours before the meeting or on such shorter notice as the person or persons calling the meeting may deem necessary and appropriate under the circumstances. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. Section 5. Quorum. ---------- ------- Except as may be otherwise provided by law, the Certificate of Incorporation or these By-laws, at all meetings of the Board, a majority of the entire Board shall constitute a -14- quorum for the transaction of business. The act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board. The Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 6. Participation in Meetings by Conference Telephone. ---------- -------------------------------------------------- Members of the Board, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting. Section 7. Conduct of Business. ---------- -------------------- At any meeting of the Board, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the Directors present, except as otherwise provided herein or required by law. The Board may take action without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board. Section 8. Powers. ---------- ------- The business of the Corporation shall be managed by or under the direction of the Board which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders of the Corporation, including, without limiting the generality of the foregoing, the unqualified power: (1) To declare dividends from time to time in accordance with law; -15- (2) To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine; (3) To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, and to do all things necessary in connection therewith; (4) To remove any officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being; (5) To confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, employees and agents; (6) To adopt from time to time such stock option, stock purchase, bonus or other compensation plans for Directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine; (7) To adopt from time to time such insurance, retirement, and other benefit plans for Directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine; and (8) To adopt from time to time regulations, not inconsistent with these By- laws, for the management of the Corporation's business and affairs. Section 9. Compensation of Directors. ---------- -------------------------- Unless otherwise restricted by the Certificate of Incorporation, the Board shall have the authority to fix the compensation of the Directors. The Directors may be paid their expenses, if any, of attendance at each meeting of the Board and may be paid a fixed sum for -16- attendance at each meeting of the Board or paid a stated salary or paid other compensation as director. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. Section 10. Removal. ----------- -------- Except as otherwise provided by the Certificate of Incorporation, any Director may be removed from office with or without cause but only by the affirmative vote of the holders of a majority of the combined voting power of the then outstanding shares of stock of the Corporation entitled to vote for the election of directors, voting together as a single class. ARTICLE III - COMMITTEES ------------------------ Section 1. Committees of the Board. ---------- ------------------------ The Board, by a vote of a majority of the entire Board then in office, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for those committees and any others provided for herein, elect a Director or Directors to serve as the member or members, designating, if it desires, other Directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board to act at the meeting in the place of the absent or disqualified member. -17- Section 2. Conduct of Business. ---------- -------------------- Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the duly delegated powers and authority of the Board in the management of the business and affairs of the Corporation. The Board shall have the power to prescribe the manner in which proceedings of any such committee shall be conducted. In the absence of any such prescription, such committee shall have the power to prescribe the manner in which its proceedings shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless the Board or such committee shall otherwise provide, regular and special meetings and other actions of any such committee shall be governed by the provisions of ARTICLE II applicable to meetings and actions of the Board. Each committee shall keep regular minutes and report to the Board when required. ARTICLE IV - OFFICERS --------------------- Section 1. General. ---------- -------- The officers of the Corporation shall be elected by the Board and shall be a Chairman of the Board (who must be a Director), a President, a Secretary and a Treasurer. The Board, in its sole discretion, may also choose one or more Senior Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-laws. The Board may, from time to time, delegate the powers or duties of any officer to any other officers or agents, notwithstanding any contrary provision hereof. -18- Section 2. Election. ---------- --------- The Board at its first meeting held after each Annual Meeting of stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time solely by the Board, which determination may be by resolution of the Board or in any By-law provisions duly adopted or approved by the Board; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. The salaries of the officers elected by the Board shall be fixed from time to time by the Board or by such officers as may be designated by resolution of the Board. Any officer elected by the Board may be removed at any time by the Board with or without cause. Only the Board may fill any vacancy occurring in any office of the Corporation. Section 3. Chairman of the Board. ---------- ---------------------- The Chairman of the Board shall be the Chief Executive Officer of the Corporation, shall preside at all meetings of the Board and of stockholders (unless the Board designates another person) and shall, subject to the provisions of the By-laws and the control of the Board, have general and active management, direction, and supervision over the business of the Corporation and over its officers. He or she shall perform all duties incident to the office of Chief Executive and such other duties as from time to time may be assigned to him or her by the Board. He or she shall have the right to delegate any of his or her powers to any other officer or employee. -19- Section 4. Vice Chairman of the Board. ---------- --------------------------- The Vice Chairman shall report and be responsible to the Chairman of the Board. The Vice Chairman shall have such powers and perform such duties as from time to time may be assigned or delegated to him or her by the Board or are incident to the office of Vice Chairman. During the absence, disability, or at the request of the Chairman of the Board, the Vice Chairman shall perform the duties and exercise the powers of the Chairman of the Board. In the absence or disability of both the Vice Chairman and the Chairman of the Board, the President or another person designated by the Board shall perform the duties and exercise the powers of the Vice Chairman, and unless otherwise determined by the Board, the duties and powers of the Chairman. Section 5. President. ---------- ---------- The President shall report and be responsible to the Chairman of the Board. The President shall be the Chief Operating Officer of the Corporation and shall have such powers and perform such duties as from time to time may be assigned or delegated to him or her by the Board or are incident to the office of President. During the absence or disability of the Vice Chairman, or at the request of the Chairman of the Board, the President shall perform the duties and exercise the powers of the Vice Chairman of the Board. During the absence or disability of the Chairman of the Board and the Vice Chairman, or at the request of the Chairman of the Board, the President shall perform the duties and exercise the powers of the Vice Chairman and the Chairman of the Board. In the absence or disability of the President, the person designated by the Board shall perform the duties and exercise the powers of the President, and unless otherwise determined by the Board, the duties and powers of the Vice Chairman. -20- Section 6. Senior Executive Vice Presidents. ---------- --------------------------------- The Senior Executive Vice Presidents shall have such powers and perform such duties as from time to time may be prescribed for them respectively by the Board or are incident to the office of Senior Executive Vice President. Section 7. Senior Vice Presidents. ----------- ----------------------- The Senior Vice Presidents shall have such powers and perform such duties as from time to time may be prescribed for them respectively by the Board or are incident to the office of Senior Vice President. Section 8. Vice Presidents. ---------- ---------------- The Vice Presidents shall have such powers and perform such duties as from time to time may be prescribed for them respectively by the Board or are incident to the office of Vice President. Section 9. Secretary. ---------- ---------- The Secretary shall keep or cause to be kept, at the principal executive office of the Corporation or such other place as the Board may order, a book of minutes of all meetings of stockholders, the Board and its committees, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Board and committee meetings, the number of shares present or represented at stockholders' meetings, and the proceedings thereof. The Secretary shall keep, or cause to be kept, a copy of the By-laws of the Corporation at the principal executive office of the Corporation or such other place as the Board may order. The Secretary shall keep, or cause to be kept, at the principal executive office of -21- the Corporation or at the office of the Corporation's transfer agent or registrar, if one be appointed, a stock register, or a duplicate stock register, showing the names of the stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders, and of the Board and any committees thereof required by these By-laws or by law to be given, shall keep the seal of the Corporation in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board. Section 10. Treasurer. ----------- ---------- The Treasurer shall have custody of the corporate funds and securities of the Corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, and shall send or cause to be sent to the stockholders of the Corporation such financial statements and reports as are required by law or these By-laws to be sent to them. The Treasurer shall deposit all monies and valuables in the name and to the credit of the Corporation with such depositaries as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the President and the Board, whenever they request it, an account of all transactions and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board. Section 11. Other Officers. ----------- --------------- -22- Such other officers or assistant officers as the Board may designate shall perform such duties and have such powers as from time to time may be assigned to them by the Board. The Board may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers. Section 12. Execution of Contracts and Other Documents. ----------- ------------------------------------------- Each officer of the Corporation may execute, affix the corporate seal and/or deliver, in the name and on behalf of the Corporation, deeds, mortgages, notes, bonds, contracts, agreements, powers of attorney, guarantees, settlements, releases, evidences of indebtedness, conveyances, or any other document or instrument which is authorized by the Board or is required to be executed in the ordinary course of business of the Corporation, except in cases where the execution, affixation of the corporate seal and/or delivery thereof shall be expressly and exclusively delegated by the Board to some other officer or agent of the Corporation. Section 13. Action with Respect to Securities of Other Corporations. ----------- -------------------------------------------------------- Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board or the President or any other officer or officers authorized by the Board, the Chairman of the Board or the President, and any such officer may, in the name of and on behalf of the Corporation, vote, represent and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation and take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the -23- ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board may, by resolution from time to time, confer like powers upon any other person or persons. ARTICLE V - STOCK ----------------- Section 1. Certificates of Stock. ---------- ---------------------- Each stockholder shall be entitled to a certificate certifying the number of shares owned by him or her and signed in the name of the Corporation (i) by the Chairman or Vice Chairman of the Board, the President or any Executive Vice President, Senior Vice President or Vice President and (ii) by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer. Where a certificate is countersigned by (i) a transfer agent or (ii) a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar whose signature appears on the certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. Section 2. Transfers of Stock. ---------- ------------------- Transfers of shares of capital stock of the Corporation shall be made only on the stock record of the Corporation by the holder of record thereof or by his, her or its attorney thereunto authorized by the power of attorney duly executed and filed with the Secretary of the Corporation or the transfer agent thereof, and only on surrender of the certificate or certificates representing such shares, properly endorsed or accompanied by a duly executed stock transfer power. Registration of transfer of any shares shall be subject to applicable provisions of the Certificate of Incorporation and applicable law with respect to the transfer of such shares. The -24- Board may make such additional rules and regulations as it may deem expedient concerning the issue and transfer of certificates representing shares of the capital stock of the Corporation. Section 3. Record Date. ---------- ------------ (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in any other lawful action, the Board may fix, in advance, a record date in respect of such meeting, which record date shall not be more than 60 nor less than 10 days before the date of such meeting; provided, however, that if no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board adopts a resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. (b) Notwithstanding Section 3(a) of ARTICLE V of these By-laws, the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting shall be as fixed by the Board or as otherwise established under this Section -25- 3(b). Any person seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall, by written notice addressed to the Secretary and delivered to the Corporation, request that a record date be fixed for such purpose. The Board may fix a record date for such purpose, which shall be no more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board and shall not precede the date such resolution is adopted. If the Board fails within 10 days after the Corporation receives such notice to fix a record date for such purpose, the record date shall be the day on which the first written consent is delivered to the Corporation in the manner described in Section 3(c) below unless prior action by the Board is required under the General Corporation Law of the State of Delaware, in which event the record date shall be at the close of business on the day on which the Board adopts the resolution taking such prior action. (c) Every written consent purporting to take or authorizing the taking of corporate action and/or revocations (each such written consent and related revocation is referred to in this Section 3(c) of ARTICLE V of the By-laws as a "Consent") shall bear the date of signature of each stockholder who signs the Consent, and no Consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated Consent delivered in the manner required by this Section 3(c), Consents signed by a sufficient number of stockholders to take such action are so delivered to the Corporation. A Consent shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery to the Corporation's registered office to its principal place of business or to such officer or agent shall be made by hand or by -26- certified or registered mail, return receipt requested. In the event of the delivery to the Corporation of a Consent, the Secretary of the Corporation shall provide for the safe-keeping of such consent and shall promptly conduct such ministerial review of the sufficiency of the Consents and of the validity of the action to be taken by stockholder consent as he or she deems necessary or appropriate, including, without limitation, whether the holders of a number of shares having the requisite voting power to authorize or take the action specified in the Consent have given consent; provided, however, that if the corporate action to which the Consent relates is the removal or replacement of one or more members of the Board, the Secretary or the Corporation shall promptly designate two persons who shall not be members of the Board, to serve as inspectors with respect to such Consent and such inspectors shall discharge the functions of the Secretary of the Corporation under this Section 3(c). If the Certificate of Incorporation provides for the issuance of any class or series of stock which is convertible into any other class or series of stock, as a condition to counting the votes cast by any holder of shares at any annual or special meeting of stockholders, or in connection with any Consent of stockholders, the Board or a duly authorized committee thereof, in its discretion, may require the holder of any shares to furnish such affidavits or other proof as the Board or such committee deems necessary and advisable to determine whether such shares have been converted pursuant to the terms governing the issuance and conversion of such shares in the Certificate of Incorporation. If after such investigation the Secretary or the inspectors (as the case may be) shall determine that the Consent is valid and that the action therein specified has been validly authorized, that fact shall forthwith be certified on the records of the Corporation kept for the purpose of recording the proceedings of meetings of stockholders, and the Consent shall be filed in such records, at which time the Consent shall -27- become effective as stockholder action. In conducting the investigation required by this Section 3(c), the Secretary or the inspectors (as the case may be) may, at the expense of the Corporation, retain special legal counsel and any other necessary or appropriate professional advisors, and such other personnel as they may reasonably deem necessary or appropriate to assist them, and shall be fully protected in relying in good faith upon the opinion of such counsel or advisors. Section 4. Lost, Stolen or Destroyed Certificates. ---------- --------------------------------------- The Board may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 5. Regulations. ---------- ------------ The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board may establish. Section 6. Record Owners. ---------- -------------- The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of -28- shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. ARTICLE VI - NOTICES -------------------- Section 1. Notices. ---------- -------- Whenever written notice is required by law, the Certificate of Incorporation or these By-laws, except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder, Director, officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, recognized overnight delivery service or by sending such notice by facsimile, receipt acknowledged, or by prepaid telegram or mailgram. Any such notice shall be addressed to such stockholder, director, officer, employee or agent at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered, or dispatched, if delivered through the mails or by telegram or facsimile shall be the time of the giving of the notice. Section 2. Waivers. ---------- -------- A written waiver of any notice, signed by a stockholder, Director, officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, director, officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice of such -29- meeting except attendance for the sole purpose of objecting to the timeliness of notice. ARTICLE VII - MISCELLANEOUS --------------------------- Section 1. Facsimile Signatures. ---------- --------------------- In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these By-laws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof. Section 2. Corporate Seal. ---------- --------------- The Board may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer. Section 3. Reliance upon Books, Reports and Records. ---------- ----------------------------------------- Each Director, each member of any committee designated by the Board, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board so designated, or by any other person as to matters which such Director or committee member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation. -30- Section 4. Fiscal Year --------- ----------- The fiscal year of the Corporation shall be as fixed by the Board. Section 5. Time Periods. ---------- ------------- In applying any provision of these By-laws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included. Section 6. Disbursements. ---------- -------------- All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board may from time to time designate. -31- ARTICLE VIII - AMENDMENTS ------------------------- In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to adopt, alter, amend or repeal these By-laws subject to the power of the holders of capital stock of the Corporation to adopt, alter, amend or repeal the By-laws; provided, however, that, with respect to the powers of holders of capital stock to adopt, alter, amend or repeal By- laws of the Corporation, notwithstanding any other provision of these By-laws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the capital stock of the Corporation required by law, the Certificate of Incorporation or these By-laws, the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares entitled to vote generally on matters requiring approval of stock holders, voting together as a single class, shall be required to adopt, alter, amend or repeal any provision of these By-laws. -32- EX-4.1 6 SPECIMEN CLASS A STOCK CERTIFICATE TEMPORARY CERTIFICATE - EXCHANGEABLE FOR ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY CLASS A COMMON STOCK NUMBER SHARES - ------------------------- ------------------------- - ------------------------- ------------------------- THIS CERTIFICATE IS TRANSFERABLE CUSIP 35138T 10 7 IN NEW YORK, NEW YORK SEE REVERSE FOR CERTAIN DEFINITIONS [LOGO] FOX ENTERTAINMENT GROUP FOX ENTERTAINMENT GROUP, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE - ------------------------------------------------------------------------------- THIS CERTIFIES THAT IS THE OWNER OF - ------------------------------------------------------------------------------- FULLY PAID AND NON-ASSESSABLE SHARES OF THE CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE, OF Fox Entertainment Group, Inc. (the "Corporation"), transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar. Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. Dated /s/ COUNTERSIGNED AND REGISTERED: THE BANK OF NEW YORK CHAIRMAN AND CHIEF EXECUTIVE OFFICER TRANSFER AGENT AND REGISTRAR [SEAL] BY /s/ /s/ AUTHORIZED SIGNATURE SECRETARY
FOX ENTERTAINMENT GROUP, INC. The Corporation will furnish without charge to each stockholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - .................... Custodian .................... TEN ENT - as tenants by the entireties (Cust) (Minor) JT TEN - as joint tenants with right of under Uniform Gifts to Minors survivorship and not as tenants Act ............................................... in common (State)
Additional abbreviations may also be used though not in the above list. For value received, _____________________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ------------------------------------ | | ------------------------------------ - -------------------------------------------------------------------------------- (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------- shares of the Class A Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint - ----------------------------------------------------------------------- Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated ____________________ _________________________________________________________ NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. Signature(s) Guaranteed: ___________________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. EX-10.21 7 COMPOSITE REVOLVING CREDIT AGREEMENT DATED 5-19-93 EXHIBIT 10.21 COMPOSITE COPY (INCLUDING AMENDMENTS NO. 1-6) REVOLVING CREDIT AGREEMENT Dated as of May 19, 1993 Among HARPERCOLLINS (UK) HARPERCOLLINS PUBLISHERS INC. NEWS AMERICA FSI, INC. NEWS AMERICA HOLDINGS INCORPORATED NEWS AMERICA PUBLICATIONS, INC. NEWS INTERNATIONAL plc NEWS LIMITED NEWS SECURITIES B.V. NEWSCORP INVESTMENTS LIMITED as Borrowers -- --------- THE GUARANTORS NAMED HEREIN as Guarantors -- ---------- CHEMICAL BANK CITIBANK, N.A. COMMONWEALTH BANK OF AUSTRALIA NATIONAL AUSTRALIA BANK LIMITED SAMUEL MONTAGU & CO. LIMITED WESTPAC BANKING CORPORATION as Arrangers/Managing Agents -- ------------------------- CITIBANK, N.A. as Administrative and Documentation Agent ----------------------------------------- and CITISECURITIES LIMITED as Australian Agent ------------------- and THE AGENTS NAMED HEREIN as Agents --------- and THE CO-AGENTS NAMED HEREIN as Co-Agents ------------ and THE LEAD MANAGERS NAMED HEREIN as Lead Managers ---------------- and THE BANKS NAMED HEREIN as Banks -------- TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1.01 Certain Defined Terms.................................1 1.02 Computation of Time Periods..........................38 1.03 Accounting Terms.....................................38 1.04 General..............................................39 ARTICLE II AMOUNTS AND TERMS OF THE ADVANCE 2.01 The Advances.........................................39 2.02 Borrowings...........................................41 2.03 Repayment............................................48 2.04 Reduction of the Commitments.........................49 2.05 Prepayments..........................................49 2.06 Interest; Interest Rate Determination................52 2.07 Fees.................................................54 2.08 Increased Costs, Illegality, Substitute Rates, Etc. .......................................55 2.09 Payments and Computations............................59 2.10 Taxes................................................61 2.11 Sharing of Payments and Losses.......................68 2.12 Use of Proceeds......................................70 2.13 Evidence of Debt.....................................71 2.14 Defaulting Lenders...................................71 ARTICLE III CONDITIONS OF LENDING 3.01 Conditions Precedent to Initial Borrowing............74 3.02 Conditions Precedent to Each Borrowing...............78 3.03 Determinations Under Section 3.01....................78 ARTICLE IV REPRESENTATIONS AND WARRANTIES 4.01 Representations and Warranties of the Loan Parties.......................................79 i Section Page - ------- ---- ARTICLE V COVENANTS OF THE LOAN PARTIES 5.01 Affirmative Covenants................................85 5.02 Negative Covenants...................................89 5.03 Reporting Requirements...............................93 5.04 Financial Covenants..................................96 ARTICLE VI EVENTS OF DEFAULT 6.01 Events of Default....................................97 6.02 Cash Cover in Event of Default......................101 ARTICLE VII THE ADMINISTRATIVE AGENT THE AUSTRALIAN AGENT 7.01 Authorization and Action............................102 7.02 Appropriate Agent's Reliance, Etc. .................102 7.03 Citibank, Citisecurities and Affiliates.............103 7.04 Lender Credit Decision..............................103 7.05 Indemnification.....................................104 7.06 Successor Agents....................................105 7.07 The Australian Agent................................106 ARTICLE VIII GUARANTY 8.01 Guaranty, Limitation of Liability; Taxes............106 8.02 Guaranty Absolute...................................107 8.03 Waivers.............................................108 8.04 Continuing Guaranty; Assignments Under this Agreement....................................109 8.05 Release of Guarantors...............................109 ARTICLE IX MISCELLANEOUS 9.01 Amendments, Etc. ..................................110 9.02 Notices, Etc. .....................................110 9.03 No Waiver, Remedies.................................111 9.04 Costs and Expenses..................................111 9.05 Right of Set-Off....................................114 9.06 Binding Effect......................................114 9.07 Assignments, Novations and Participations...........115 9.08 Governing Law; Submission to Jurisdiction; Service of Process; Judgment......................120 9.09 Execution in Counterparts...........................122 9.10 Confidentiality.....................................122 ii Section Page - ------- ---- 9.11 Removal of Borrowers................................122 9.12 Waiver of Jury Trial; Immunities....................123 ____________________ Schedule 1 - Part I - Commitments - Part II - Applicable Lending Offices; Appropriate Borrowers' Accounts - Part III- Addresses of Parties Schedule 2 - Sterling Associated Costs Rate Formula Schedule 3 - Part I - Existing Debt - Part II - Debt to Be Refinanced - Part III- Surviving Debt - Part IV - Existing Liens - Part V - Exchangeable Preferred Stock and Pearson plc Shares ____________________ Exhibit A-1 Form of Notice of Borrowing/Continuation Exhibit A-2 Form of Notice of Election Exhibit B-1 Form of Assignment and Acceptance Exhibit B-2 Form of Novation Exhibit C-1 Form of Compliance Certificates Exhibit C-2 Form of Mandatory Reduction Certificate Exhibit C-3 Form of Reinvestable Proceeds Certificate Exhibit C-4 Form of Certificate - Guarantor's Certificate under Section 234(10) of Australian Corporation Law Exhibit D Form of Bill Exhibit E-1 Opinion of Arthur M. Siskind, Group General Counsel of The News Corporation Limited Exhibit E-2 Opinion of Squadron, Ellenoff, Plesent, Sheinfeld & Sorkin, counsel to the Loan Parties in the United States Exhibit E-3(1) Opinion of Allen & Overy, counsel to the Loan Parties in the United Kingdom iii Exhibit E-3(2) Opinion of Allen & Overy, counsel to the Loan Parties in Hong Kong Exhibit E-4 Opinion of Clayton Utz, counsel to the Loan Parties in Australia Exhibit E-5 Opinion of Nauta Dutilh, counsel to the Loan Parties in the Netherlands Exhibit E-6 Opinion of Shearman & Sterling, counsel to the Appropriate Agents and the Arrangers iv REVOLVING CREDIT AGREEMENT REVOLVING CREDIT AGREEMENT dated as of May 19, 1993 among HarperCollins Publishers Inc., a Delaware, U.S. corporation, HarperCollins (UK), an English company, News America FSI, Inc., a Delaware, U.S. corporation, News America Holdings Incorporated, a Delaware, U.S. corporation, News America Publications, Inc., a Delaware, U.S. corporation, Newscorp Investments Limited, an English company, News Securities B.V., a Netherlands corporation, News International plc, an English company, and News Limited, incorporated in South Australia, Australia (each, a "Borrower" and, collectively, the "Borrowers"), -------- --------- each of the Persons listed on the signature pages hereof under the heading "Guarantors" (together with each Person that becomes a guarantor pursuant to Section 5.02(c) or 5.01(k), each a "Guarantor" and, collectively, the --------- "Guarantors"), Chemical Bank, Citibank, N.A., Commonwealth Bank of Australia, - ----------- National Australia Bank Limited, Samuel Montagu & Co. Limited and Westpac Banking Corporation, as Arrangers/Managing Agents for The News Corporation Limited in respect of the syndication of Facilities (as defined below) to the Banks (each an "Arranger" and, collectively, the "Arrangers"), Citibank, N.A. -------- --------- ("Citibank"), as administrative and documentation agent (together with any - ---------- successor appointed pursuant to Article VII, the "Administrative Agent") for the -------------------- Lenders hereunder, Citisecurities Limited ("Citisecurities"), as Australian -------------- administrative agent (together with any successor appointed pursuant to Article VII, the "Australian Agent") for the Lenders hereunder, the agents (the ---------------- "Agents"), the co-agents (the "Co-Agents"), the lead managers (the "Lead ------ --------- ---- Managers") and the banks (the "Banks"), each as listed on the signature pages - -------- ----- hereof. In consideration of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the --------------------- following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Adjusted Face Value Amount" means, on any date of determination, the -------------------------- Face Value Amount of any Bill Advance or Cash Advance in Australian Dollars made by a Facility B Lender or Facility C Lender, as the case may be, less the sum of the Discount Amount and the ---- Usage Fee deducted from the Face Value Amount of such Bill Advance or Cash Advance on the date such Advance was made to the Australian Dollar Borrower. "Adjusted Net Assets" has the meaning specified in Section 8.01(b). ------------------- "Adjusted Operating Income" of any Person means, for any period, ------------------------- without duplication, Consolidated operating income plus Consolidated ---- depreciation expense plus Consolidated amortization expense plus Cash ---- ---- Dividends less an amount equal to the operating income attributable to ---- minority interests in non-Wholly Owned Subsidiaries, in each case as determined in accordance with A-GAAP for such period. "Administrative Agent" has the meaning specified in the recital of -------------------- parties to this Agreement. "Advance" means a Facility A Advance, a Facility B Advance or a ------- Facility C Advance. "Affiliate" means, as to any Person, any other Person that, directly --------- or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person; provided that any -------- Person that would be an Affiliate solely by reason of the fact that a director or officer of such Person is also a director or officer of a member of the Reporting Group shall be deemed not to be an Affiliate for purposes of this definition. For purposes of this definition, the term "control" (including the terms "controlling," "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power to vote 10% or more of the Voting Stock of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise. "A-GAAP" has the meaning specified in Section 1.03. ------ "Agents" has the meaning specified in the recital of the parties to ------ this Agreement. "Allocation Date" means May 14, 1993. --------------- 2 "Applicable Margin" means, in the case of Facility A Advances, ----------------- Facility B Advances and Facility C Advances, at any time a rate equal to (a) the rate per annum set forth in the table below under the heading "Applicable Margin" opposite the ratings of NAHI Public Debt from S&P and Moody's in effect at such time (with the lower of the two ratings to be determinative), provided that, if there is at least one -------- rating of NAHI Public Debt from either S&P or Moody's that is categorized by such rating agency as an "investment grade" rating, then, in the case of a "split" rating (including numerical modifiers and (+) or (-) as ratings), the Applicable Margin at such time shall be based on the higher rating. Applicable S&P Moody's Margin ----------------------------------------------- BB or lower Ba2 or lower 1.0000% BB+ Ba1 0.8500% BBB- Baa3 0.5000% BBB Baa2 0.3750% BBB+ or higher Baa1 or higher 0.3000% After June 30, 2001, each rate set forth in the above table shall increase by 0.10% during those times when the total amount of Advances exceeds 50% of the aggregate amount of the Lenders' Commitments. "Appropriate Agent" means, at any time, with respect to transfers of ----------------- funds in US Dollars and Sterling and, unless otherwise specified, all other matters under this Agreement, the Administrative Agent, and, with respect to transfers of funds, the determination of rates applicable to, amounts in respect of and certain other matters relating to Advances in Australian Dollars, the Australian Agent. "Appropriate Agent's Account" means the account of the Appropriate --------------------------- Agent maintained (a) in the case of any transfer of funds in US Dollars, by the Administrative Agent with Citibank (x) in the case of the Facility A Borrowers (other than the Sterling Borrowers), at its office at 1 Court Square, Long Island City, New York 11120, Account No. 36852248, Attention: Mandy Hartshorne, and (y) in the case of the Sterling Borrowers, at the office of Citibank International plc, 336 Strand, London, England WC2R1L5, Attention: Jackie Harvey, (b) in the case of any transfer of funds in Sterling, by the Administrative Agent at the 3 office of Citibank International plc, 336 Strand, London, England WC2R 1L5, Account No. 10963054, Attention: Jackie Harvey, and (c) in the case of any transfer of funds in Australian Dollars, by the Australian Agent at the office of Citibank Limited, 9th Level, Citibank Centre, 1 Margaret Street, Sydney, NSW 2000, Australia, Account No. 0400684057, Attention: Celle Raguine, and any other accounts maintained by the Appropriate Agents from time to time and notified to TNCL and the Lenders. "Appropriate Borrower's Account" means, with respect to any Borrower, ------------------------------ the account maintained by such Borrower with the Appropriate Agent as set forth opposite the name of such Borrower on Part II of Schedule 1 hereto, and any other accounts maintained by the Borrowers with the Appropriate Agents from time to time and notified to the Appropriate Agents. "Appropriate Lender" means, at any time, with respect to any of ------------------ Facility A, Facility B or Facility C, a Lender that has a Commitment with respect to such Facility at such time. "Appropriate Lending Office" means, with respect to (a) each Facility -------------------------- A Lender, such Lender's LIBOR Lending Office, (b) each Facility B Lender, such Lender's Australian Dollar Lending Office, and (c) each Facility C Lender, such Lender's LIBOR Lending Office in the case of Dollar LIBOR Advances, or such Lender's Australian Dollar Lending Office in the case of Advances made in Australian Dollars. "Appropriate Overnight Rate" means, (a) in the case of Advances made -------------------------- in US Dollars, the Federal Funds Rate, (b) in the case of Advances made in Sterling, the Sterling Overnight Rate and (c) in the case of Advances made in Australian Dollars, the Australian Dollar Reference Rate. "Arrangers" has the meaning specified in the recital of parties to --------- this Agreement. "Assignment and Acceptance" means an assignment and acceptance or ------------------------- novation entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in accordance with Section 9.07 and in substantially the form of Exhibit B-1 or B-2 hereto. "Associated Company" has the meaning attributed thereto under A-GAAP. ------------------ 4 "Attributable Debt" means, at any time, in connection with any sale ----------------- and leaseback transaction, the product of (i) the net proceeds from such sale and leaseback transaction times (ii) a fraction, the numerator of ----- which is the number of days of the term of the lease relating to the property involved in such sale and leaseback transaction (without regard to any options to renew or extend such term) remaining at the date of the making of such calculation and the denominator of which is the number of days of the term of such lease measured from the first day of such term. "Australia" means the Commonwealth of Australia. --------- "Australian Agent" has the meaning specified in the recital of parties ---------------- to this Agreement. "Australian Corporations Law" means the Corporations Law of the State --------------------------- of South Australia and, where applicable, of any other State or Territory of Australia. "Australian Dollar" and "A$" each means the lawful money of Australia. ----------------- -- "Australian Dollar Borrower" means News Limited, a South Australia, -------------------------- Australian corporation. "Australian Dollar Lending Office" means, with respect to any Facility -------------------------------- B Lender or Facility C Lender making Advances in Australian Dollars, as the case may be, the office of such Lender specified as its "Australian Dollar Lending Office" opposite its name on Schedule 1 hereto or in the Assignment and Acceptance pursuant to which it became a Facility B Lender or Facility C Lender, as the case may be, or such other office in Australia of such Lender as such Lender may from time to time specify to TNCL, the Administrative Agent and the Australian Agent. "Australian Dollar Rate" means, for any Interest Period for all ---------------------- Facility B Advances or Facility C Advances in Australian Dollars comprising part of the same Facility B or Facility C Borrowing, respectively: (a) in the case of an Interest Period for such Borrowing the last day of which is a maturity date of bank accepted Bills for which buying rates are quoted on the page entitled "BBSW" on the Reuters Monitor System, the rate per annum determined by the Australian Agent taking the buying rates quoted on the page entitled "BBSW" on the Reuters Monitor System at or 5 about 10:15 A.M. (Sydney time) on the first day of such Interest Period for a bank accepted Bill having a maturity date that is the last day of the Interest Period of such Borrowing, eliminating the highest and the lowest rates, and then calculating the average of the remaining rates (rounded upward to 4 decimal places if such number is in 5 or more decimal places); or (b) if, in respect of such Borrowing, the Australian Dollar Rate cannot be determined under paragraph (a) for any reason, the rate per annum calculated by the Australian Agent otherwise in accordance with paragraph (a) of this definition but by taking the buying rates quoted by the Australian Dollar Reference Lenders, on application by the Australian Agent, for bank accepted bills of a tenor equal to or, if not equal to, most closely approximating the Interest Period of such Borrowing and having a face value amount equal to the aggregate Face Value Amount of all Facility B Advances or Facility C Advances in Australian Dollars comprising the Facility B Borrowing or Facility C Borrowing, as the case may be; or (c) if, in respect of any such Borrowing, the Australian Dollar Rate cannot be determined in accordance with paragraphs (a) and (b) of this definition, the Australian Dollar Rate shall be construed to relate severally to the Advance or Advances of each Lender comprising part of the same Facility B Borrowing or Facility C Borrowing in Australian Dollars and shall be determined by the Australian Agent to be the rate rounded upwards if necessary to the nearest 4 decimal places (and expressed as a yield to maturity per cent per annum) and which that Lender quotes to the Australian Agent on request by the Australian Agent as being the rate at which at or about 10:30 A.M. (Sydney time) on the first day of the Interest Period for such Borrowing that Lender is prepared to purchase Bills accepted by itself and having a tenor equal or approximately equal to the Interest Period for that Borrowing. "Australian Dollar Reference Lenders" means Citibank Limited, ----------------------------------- Commonwealth Bank of Australia, National Australia Bank Limited, State Bank of New South Wales Limited and Westpac Banking Corporation. "Australian Dollar Reference Rate" means, on any date: -------------------------------- 6 (a) the rate per annum determined by the Australian Agent as the "Average Bid Rate" of the three-month "Bank Bill Buying Rate" quoted on the page entitled "BBSY" on the Reuters Monitor System at or about 10:00 A.M. (Sydney time) on such date (if necessary rounding up the figure to four decimal places); or (b) if in respect of any date for any reason the Australian Dollar Reference Rate cannot be determined in accordance with paragraph (a) of this definition, the rate per annum calculated by the Australian Agent as the arithmetic average (rounded up if necessary to four decimal places) of the buying rates quoted by each of the Australian Dollar Reference Lenders on application by the Australian Agent as soon as possible after 10:00 A.M. (Sydney time) on such date, for bank accepted bills of a tenor of 90 days and a face value amount of A$500,000; or (c) if, in respect of any date, for any reason the Australian Dollar Reference Rate cannot be determined in accordance with paragraphs (a) or (b) of this definition, the rate per annum determined by the Australian Agent in good faith to be the rate most nearly approximating the rate that would otherwise have been calculated by the Australian Agent in accordance with paragraph (a) of this definition having regard to comparable indices then available in the then current bill market. "Australian Press Project" means the capital investment projects for ------------------------ the construction of newspaper printing and distribution facilities at the following sites in Australia: (a) Mile End, Adelaide, (b) Westgate Park, Melbourne, (c) Chullora, Sydney and (d) Murrarie, Brisbane. "Authorized Officer" of any Person means an officer or director of ------------------ such Person or any other Person duly authorized to execute and deliver the document or other writing stated to be required. "Available Facility A Commitment" means, with respect to any Facility ------------------------------- A Lender at any time, (a) such Facility A Lender's Facility A Commitment at such time minus (b) the Dollar Equivalent at such time of the sum of (i) ----- the aggregate principal amount of all Facility A Advances made by such Facility A Lender and outstanding at such time, and 7 (ii) such Lender's Pro Rata Share of the Reinvestment Basket at such time. "Available Facility B Commitment" means, with respect to any Facility ------------------------------- B Lender at any time, (a) such Facility B Lender's Facility B Commitment at such time minus (b) the aggregate Face Value Amount of all Facility B ----- Advances made by such Lender and outstanding at such time. "Available Facility C Commitment" means, with respect to any Facility ------------------------------- C Lender at any time, (a) such Facility C Lender's Facility C Commitment at such time minus (b) the sum of (i) the Dollar Equivalent at such time of ----- determination of the aggregate Face Value Amount of all Bill Advances and all Cash Advances made in Australian Dollars and (ii) the aggregate principal amount of all Cash Advances made in US Dollars by such Facility C Lender and outstanding at such time. "AWA" means Ansett Worldwide Aviation, USA, a general partnership in --- which News Air Nevada, Inc., News Aviation Nevada, Inc., Alltrans Nevada, Inc. and Alltransair Nevada, Inc. are partners. "AWAS Group" means Ansett Worldwide Aviation Services, AWA, Ansett ---------- Worldwide Aviation Limited, Ansett Worldwide Aviation Equipment and any other Person in which any member of the Reporting Group holds an Investment and that is from time to time engaged in a business that is the same as (or related to) the businesses of such named Persons as carried on at the date of this Agreement. "Balance Sheet Leverage Ratio" has the meaning specified in Section ---------------------------- 5.04(a)(i). "Banks" has the meaning specified in the recital of parties to this ----- Agreement. "Bill" means a bill of exchange (but excluding checks) as defined in ---- the Australian Bills of Exchange Act 1909 (Cth) (the "Act") and each --- reference herein to drawing, accepting, indorsing or dealing with a Bill shall have the meaning ascribed thereto under the Act. "Bill Advance" has the meaning specified in Section 2.01(b). ------------ "Borrower" or "Borrowers" has the meaning specified in the recital of -------- --------- parties to this Agreement, except to the 8 extent any such Borrower is removed pursuant to Section 9.11. "Borrowing" means a Facility A Borrowing, a Facility B Borrowing or a --------- Facility C Borrowing. "BSkyB" means British Sky Broadcasting Limited, an English company. ----- "Business Day" means a day of the year on which banks are not required ------------ or authorized to close in New York City and (a) if the applicable Business Day relates to any Facility A Advances or any Facility C Advances in US Dollars, a day on which dealings are carried on in the London interbank market or (b) if the applicable Business Day relates to any Facility A Advances in Sterling, on which banks are open for business in London and on which dealings are carried on between banks in London in the domestic Sterling market or (c) if the applicable Business Day relates to any Facility B Advances or any Facility C Advances in Australian Dollars, a day other than a Saturday, Sunday or public holiday, on which banks are open for business in Sydney and Melbourne. "Capital Expenditure" means any expenditure for equipment, fixed ------------------- assets, real property or improvements, or for replacements or substitutions therefor or additions thereto, that have a useful life of more than one year. "Capital Expenditure Amount" means, with respect to any Person for any -------------------------- period, the sum of, without duplication, (i) all Capital Expenditures during such period plus (ii) the entire principal amount of any Debt ---- (including, without limitation, Obligations under Capitalized Leases) assumed or incurred in connection with any such Capital Expenditure less ---- (iii) the aggregate Net Cash Proceeds and the Value of Non-Cash Proceeds received in such period from sales or other dispositions of Replaced Assets (other than such sales or other dispositions of any business as a going concern). "Capitalized Leases" has the meaning specified in clause (e) of the ------------------ definition of Debt. "Cash Advance" has the meaning specified in Section 2.01(b). ------------ "Cash Dividends" means, all dividends, all purchases, redemptions, -------------- retirements, defeasances or other acquisitions of any capital stock or shares or any warrants, rights or options to acquire such capital stock or shares, in each 9 case to the extent paid in cash by or on behalf of the issuer thereof, all returns of capital to stockholders or shareholders as such and all returns in respect of loan stock or any similar Investment, in each case to the extent paid in cash. "Cash Equivalents" means any of the following, so long as they are ---------------- owned free and clear of all Liens and have a maturity of not greater than 180 days from the date of issuance thereof: (a) readily marketable direct obligations of the United States, the United Kingdom or Australia or, in each case, any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the United States or unconditionally guaranteed by the government of the United Kingdom or Australia, (b) repurchase agreements with respect to obligations of the type referred to in clause (a) above with any securities dealers that are fully collateralized by such obligations, (c) certificates of deposit of or time deposits or Eurodollar deposits with any commercial bank, that has a combined capital and surplus of at least US$1,000,000,000 or its equivalent in other currencies or (d) commercial paper that is rated at least "Prime-1" (or the equivalent grade) by Moody's or "A-1" (or the equivalent grade) by S&P. "Cash Tax Expense" means, for any period, the aggregate amount of ---------------- national, federal, state and local income taxes paid by the members of the Reporting Group during such period, other than (i) any such taxes ----- ---- attributable to minority interests in a member of the Reporting Group except to the extent that either the Reporting Group is legally obligated to pay the full amount of such taxes or the holders of such minority interests do not bear their ratable share of such taxes because of a tax sharing arrangement with any member of the Reporting Group and (ii) any such taxes paid during such period in respect of the sale or other disposition of any asset or business of any member of the Reporting Group during such period that is not in the ordinary course of business. "CERCLA" means the U.S. Comprehensive Environmental Response, ------ Compensation and Liability Act of 1980. "Closing Date" means the date of the initial Borrowing. ------------ "Co-Agents" has the meaning specified in the recital of parties to --------- this Agreement. 10 "Commitment" means a Facility A Commitment, a Facility B Commitment or ---------- a Facility C Commitment. "Compliance Certificate" means a certificate executed by the chief ---------------------- financial officer of TNCL in substantially the form of Exhibit C-1. "Confidential Information" means (a) forecasted financial information ------------------------ prepared by TNCL and delivered to the Administrative Agent or any Lender pursuant to this Agreement and (b) any other information that any Loan Party furnishes to the Administrative Agent or any Lender in a writing designated as confidential, but in each case does not include any such information that is or becomes generally available to the public or that is or becomes available to the Administrative Agent or such Lender from a source other than a Loan Party that has not, to the actual knowledge of the Administrative Agent or such Lender, as the case may be, breached a duty of confidentiality to any Loan Party. "Consolidated" refers to the consolidation of accounts in accordance ------------ with A-GAAP. "Constitutive Documents" means, as to any Person, such Person's ---------------------- certificate of incorporation or registration (including, if relevant, certificates of change of name), memorandum of association, articles of association or incorporation, charter, by-laws, trust deed, partnership, joint venture or shareholders' agreement or equivalent documents constituting such Person. "Debt" of any Person means, without duplication, (a) all indebtedness ---- of such Person for borrowed money or for money raised under a bill facility or similar facility, (b) all indebtedness of such Person for the deferred purchase price of property or services that would appear as a liability on a balance sheet of such Person prepared in accordance with A-GAAP (other than (i) payables incurred in the ordinary course of business with payment terms of not more than 180 days, (ii) royalties and (iii) Programming Liabilities), (c) all Obligations of such Person evidenced by notes, bonds (other than performance and similar bonds), debentures, loan stock or other similar instruments, (d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to 11 repossession or sale of such property), (e) the principal component of the Obligations of such Person as lessee under leases that are, in accordance with A-GAAP, capital or finance leases ("Capitalized Leases"), (f) all ------------------ Obligations, contingent or otherwise, of such Person under acceptance, letter of credit, note purchase facility or other discounting arrangement or similar facilities and any indemnity given in respect of any of them (other than any letter of credit in support of trade payables incurred in the ordinary course of business with an expiration date of not more than 180 days from the date of issuance thereof), (g) all Obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any capital stock or shares of or other ownership or profit interest in the equity of such Person or any of its Affiliates or any warrants, rights or options to acquire such capital stock or shares, valued, in the case of Redeemable Preferred Stock, at the greater of its voluntary or involuntary liquidation preference plus accrued dividends thereon that have not been paid on the stated date for payment thereof, but excluding any Obligation arising solely as a result of the declaration of a dividend on any capital stock or shares of such Person, (h) all Debt of others referred to in clauses (a) through (g) above guaranteed directly or indirectly in any legally binding manner by such Person, or in effect guaranteed in any legally binding manner directly or indirectly by such Person through an agreement (each such agreement, a "Debt Guaranty") (i) to ------------- pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss, (iii) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (iv) otherwise to assure a creditor against loss in a legally binding manner, and (i) all Debt referred to in clauses (a) through (h) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt, valued at the lesser of the amount of such Debt and the fair market value of such property. Notwithstanding anything stated herein to the contrary, for the purposes of this Agreement the TOPrS/SM/ Securities and any securities 12 substantially similar to the TOPrS/SM/ Securities shall not constitute "Debt". "Debt Guaranty" has the meaning specified in clause (h) of the ------------- definition of "Debt". "Default" means any Event of Default or any event that would ------- constitute an Event of Default but for the requirement that notice be given or time elapse or both. "Defaulted Advance" means, with respect to any Lender at any time, the ----------------- amount of any Advance required to be made by such Lender to a Borrower pursuant to Section 2.01 at or prior to such time that has not been so made as of such time; provided, however, any Advance made by an Appropriate -------- ------- Agent for the account of such Lender pursuant to Section 2.02(d) shall not be considered a Defaulted Advance even if, at such time, such Lender shall not have reimbursed the Appropriate Agent therefor as provided in Section 2.02(d). In the event that a portion of a Defaulted Advance shall be deemed made pursuant to Section 2.14(b), the remaining portion of such Defaulted Advance shall be considered a Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed made in part. "Defaulted Amount" means, with respect to any Lender at any time, any ---------------- amount required to be paid by such Lender to an Appropriate Agent or any other Lender hereunder at or prior to such time that has not been so paid as of such time, including, without limitation, any amount required to be paid by such Lender to (a) an Appropriate Agent pursuant to Section 2.02(d) to reimburse such Appropriate Agent for the amount of any Advance made by such Appropriate Agent for the account of such Lender, (b) any other Lender pursuant to Section 2.11 to purchase any participation in Advances owing to such other Lender or otherwise redistribute amounts to such other Lender and (c) the Administrative Agent pursuant to Section 7.05 to reimburse an Appropriate Agent for such Lender's share of any amount required to be paid by the Lenders to such Appropriate Agent as provided therein. In the event that a portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.14(b), the remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally required to be made hereunder on the same date as the Defaulted Amount so deemed paid in part. 13 "Defaulting Lender" means, at any time, any Lender that, at such time, ----------------- (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take or be the subject of any action or proceeding of the type described in Section 6.01(f). "Discount Amount" means, in respect of a Bill Advance or Cash Advance --------------- of a Facility B Lender or Facility C Lender, as the case may be, to be made in respect of a Facility B Borrowing or a Facility C Borrowing in Australian Dollars, respectively, an amount in Australian Dollars determined as follows: FVA - FVA x 36500 --------------- 36500 + (D x R) where: (a) FVA equals the Face Value Amount of such Bill Advance or Cash Advance, as the case may be, (b) R equals the Australian Dollar Rate applicable on the first day of the Interest Period for such Borrowing (expressed as a decimal number) and (c) D equals the number of days in the Interest Period for such Borrowing. "Dollar Equivalent" means, on any day on which the Appropriate Agent ----------------- calculates the relative amounts of the Facilities or any amount payable in respect thereof, in respect of an amount stated in US Dollars, that amount in US Dollars, and, in respect of an amount in either Sterling or Australian Dollars, such amount of US Dollars as could be purchased with such amount of Sterling or Australian Dollars, as the case may be, at the spot rate of exchange quoted by the Appropriate Agent at 11:00 A.M. (New York City time, in the case of Sterling, and Sydney time, in the case of Australian Dollars) on such day for the purchase of US Dollars with Sterling or Australian Dollars, as the case may be, for delivery two Business Days thereafter. For purposes of this Agreement, the Dollar Equivalent of any amount received by the Appropriate Agent for distribution to any Lenders shall be determined as of the date of such receipt. "Dollar LIBOR Advance" means an Advance that bears interest as -------------------- provided in Section 2.06(a)(i)(A). 14 "Dollar LIBOR" means, for any Interest Period for all Dollar LIBOR ------------ Advances comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate of interest determined by the Administrative Agent to be the average (rounded upward to the nearest whole multiple of 1/32 of 1% per annum, if such rate is not such a multiple) of the rate per annum at which deposits in US Dollars are offered by the principal office of each of the Dollar Reference Lenders in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount substantially equal to each such Dollar Reference Lender's Advance in US Dollars comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Dollar LIBOR Reserve Percentage for such Interest Period. Dollar LIBOR for any Interest Period shall be determined by the Administrative Agent on the basis of applicable rates furnished to and received by the Administrative Agent from the Dollar Reference Lenders two Business Days before the first day of such Interest Period. "Dollar LIBOR Reserve Percentage" for any Interest Period for all ------------------------------- Dollar LIBOR Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Dollar LIBOR Advances is determined) having a term equal to such Interest Period. "Dollar Reference Lenders" means Citibank, N.A., Chemical Bank, Bank ------------------------ of America National Trust and S.A., London Branch, NationsBank of Texas, N.A. and The Bank of New York. "Dollars", "US Dollars" and the sign "$" or "US$" each means lawful ------- ---------- - --- money of the United States. "Eligible Assignee" means with respect to any Facility, (a) a ----------------- commercial bank organized under the laws of the United 15 States, the United Kingdom or Australia, or any other country that is a member of the OECD or a political subdivision of any such country, and having total assets in a Dollar Equivalent amount in excess of US$5,000,000,000, so long as such bank is acting through a branch or agency located in the country in which it is organized or another country that is described in this clause (a); (b) the central bank of any country that is a member of the OECD; and (c) any other commercial bank approved by the Administrative Agent and TNCL, such approval not to be unreasonably withheld; provided, however, that an Affiliate of any member of the -------- ------- Reporting Group shall not qualify as an Eligible Assignee. "Environmental Action" means any administrative, regulatory or -------------------- judicial action, suit, demand, demand letter, claim, notice of non- compliance or violation, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law or any Environmental Permit including, without limitation, (a) any claim by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any Environmental Law and (b) any claim by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment. "Environmental Law" means any national, federal, state, or local law, ----------------- rule, regulation, order, writ, judgment, injunction, decree, determination or award relating to the environment, health, safety or Hazardous Materials applicable in any jurisdiction in which any member of the Reporting Group conducts operations or maintains properties. "Environmental Permit" means any permit, approval, identification -------------------- number, license or other authorization required under any Environmental Law. "ERISA" means the U.S. Employee Retirement Income Security Act of ----- 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" of any Person means any other Person that for --------------- purposes of Title IV of ERISA is a member of such Person's controlled group, or under common control with such Person, within the meaning of Section 414 of the Internal Revenue Code. 16 "ERISA Event" with respect to any Person means (a) the occurrence of a ----------- reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan of such Person or any of its ERISA Affiliates, unless the 30- day notice requirement with respect to such event has been waived by the PBGC; (b) the provision by the administrator of any Plan of such Person or any of its ERISA Affiliates of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a facility of such Person or any of its ERISA Affiliates in the circumstances described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any of its ERISA Affiliates from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (e) the failure by such Person or any of its ERISA Affiliates to make a payment to a Plan required under Section 302(f)(1) of ERISA; (f) the adoption of an amendment to a Plan of such Person or any of its ERISA Affiliates requiring the provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to terminate a Plan of such Person or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that might be reasonably expected to constitute grounds for the termination of, or the appointment of a trustee to administer, such Plan. "Eurocurrency Liabilities" has the meaning specified in Regulation D ------------------------ of the Board of Governors of the U.S. Federal Reserve System, as in effect from time to time. "Events of Default" has the meaning specified in Section 6.01. ----------------- "Excess Amount" has the meaning specified in Section 2.11. ------------- "Excess Amount Lender" has the meaning specified in Section 2.11. -------------------- "Excess Guaranty Debt" means, at any time, the excess, if any, of the -------------------- aggregate Dollar Equivalent amount of all Debt Guaranties by members of the Reporting Group of Debt of Persons which are not members of the Reporting Group, over $US 800,000,000. 17 "Excess Sterling Borrowing" means any Facility A Borrowing in Sterling ------------------------- or part thereof that exceeds the Sterling Sublimit. "Exchangeable Preferred Stock" means the exchangeable Preferred Stock ---------------------------- set forth on Part V of Schedule 3. "Existing Debt" has the meaning specified in Section 4.01(u). ------------- "Existing Liens" has the meaning specified in Section 4.01(w). -------------- "Face Value Amount" means (a) in the case of a Bill Advance by a ----------------- Facility B Lender or a Facility C Lender comprising a Facility B Borrowing or a Facility C Borrowing in Australian Dollars, as the case may be, the aggregate of the amounts stated on the Bills comprising the Bill Advance by that Facility B Lender or Facility C Lender as the maximum amount payable thereunder and (b) in the case of a Cash Advance comprising a Facility B Borrowing or a Facility C Borrowing in Australian Dollars, as the case may be, an amount equal to the Facility B Lender's or Facility C Lender's Pro Rata Share of such Facility B Borrowing or Facility C Borrowing, as the case may be, before giving effect to any deductions therefrom with respect to the Discount Amount and Usage Fee applicable thereto. "Facility" means Facility A, Facility B or Facility C. -------- "Facility A" means, at any time, the aggregate amount of the Facility ---------- A Commitments at such time. "Facility A Advance" has the meaning specified in Section 2.01(a)(i). ------------------ "Facility A Borrowers" means HarperCollins Publishers Inc., News -------------------- America FSI, Inc., NAHI and News America Publications, Inc., each a Delaware, U.S. corporation, and the Sterling Borrowers. "Facility A Borrowing" means a borrowing consisting of simultaneous -------------------- Facility A Advances in either US Dollars or in Sterling made by the Facility A Lenders. "Facility A Commitment" means, with respect to any Facility A Lender --------------------- at any time, the amount set forth opposite such Facility A Lender's name on Schedule 1 hereto under the caption "Facility A Commitment" or, if such Facility A 18 Lender has entered into one or more Assignments and Acceptances, set forth for such Facility A Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(c) as such Facility A Lender's "Facility A Commitment", as such amount may be reduced at or prior to such time pursuant to Section 2.04. "Facility A Lender" means a Lender with a Facility A Commitment. ----------------- "Facility B" means, at any time, the aggregate amount of the Facility ---------- B Commitments at such time. "Facility B Advance" has the meaning specified in Section 2.01(b). ------------------ "Facility B Borrowing" means a borrowing consisting of simultaneous -------------------- Facility B Advances made by the Facility B Lenders. "Facility B Commitment" means, with respect to any Facility B Lender --------------------- at any time, the amount set forth opposite such Facility B Lender's name on Schedule 1 hereto under the caption "Facility B Commitment" or, if such Facility B Lender has entered into one or more Assignments and Acceptances, set forth for such Facility B Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(c), as such Facility B Lender's "Facility B Commitment", as such amount may be reduced at or prior to such time pursuant to Section 2.04. "Facility B Lender" means a Lender with a Facility B Commitment. ------------------ "Facility C" means, at any time, the aggregate amount of the Facility ---------- C Commitments at such time. "Facility C Advance" has the meaning specified in Section 2.01(c). ------------------ "Facility C Borrowers" means HarperCollins Publishers Inc., News -------------------- America FSI, Inc., NAHI and News America Publications, Inc., each a Delaware, U.S. corporation, and the Australian Dollar Borrower. "Facility C Borrowing" means a borrowing consisting of simultaneous -------------------- Facility C Advances in either US Dollars or in Australian Dollars made by the Facility C Lenders. 19 "Facility C Commitment" means, with respect to any Facility C Lender --------------------- at any time, the amount set forth opposite such Facility C Lender's name on Schedule 1 hereto under the caption "Facility C Commitment" or, if such Facility C Lender has entered into one or more Assignments and Acceptances, set forth for such Facility C Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(c) as such Facility C Lender's "Facility C Commitment", as such amount may be reduced at or prior to such time pursuant to Section 2.04. "Facility C Lender" means a Lender with a Facility C Commitment. ----------------- "Federal Funds Rate" means, for any period, a fluctuating interest ------------------ rate per annum equal for each day during such period to the weighted average of the rates on overnight U.S. Federal funds transactions with members of the U.S. Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "Film Special Purpose Vehicle" means any Special Purpose Vehicle ---------------------------- established for the sole purpose of financing, producing, marketing or distributing films or television programs. "Financing Subsidiary" means each Subsidiary of TNCL organized solely -------------------- for the purpose of providing financing for the members of the Reporting Group and holding no assets other than loans or advances to other members of the Reporting Group, ordinary shares of Pearson plc, cash and Cash Equivalents and immaterial amounts of other assets. "Fiscal Year" means the fiscal year of TNCL ending on the Sunday ----------- closest to June 30 in each year. "Fox Film" means Twentieth Century Fox Film Corporation, a Delaware, -------- U.S. corporation. "Guarantor" or "Guarantors" has the meaning specified in the recital --------- ---------- of parties to this Agreement. "Guaranty" has the meaning specified in Section 8.01. -------- 20 "Hazardous Materials" means (a) petroleum or petroleum products, natural or ------------------- synthetic gas, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and radon gas, (b) any substances defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials," "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants" or "pollutants", or words of similar import, under any Environmental Law and (c) any other substance exposure to which is regulated under any Environmental Law. "Indemnified Party" has the meaning specified in Section 9.04(b). ----------------- "Information Memorandum" means the information memorandum dated March ---------------------- 1993, as amended, modified or supplemented on or prior to the date hereof, prepared by TNCL for use in connection with the syndication of the Commitments. "Insufficiency" means, with respect to any Plan, the amount, if any, ------------- of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA. "Interest Coverage Ratio" has the meaning specified in Section ----------------------- 5.04(b). "Interest Expense" means, for any period, (a) net interest expense ---------------- determined in accordance with A-GAAP for such period, other than any amount thereof not paid in cash during such period (including, without limitation, amortization of capitalized interest and financing fees during such period), plus (b) Cash Dividends paid during such period on Preferred Stock ---- that constitutes Debt (other than Investment Preferred Stock), less (c) to ---- the extent not otherwise deducted in calculating such net interest expense, the sum of cash interest received on loans to Affiliates (other than Subsidiaries) during such period and cash interest received on balances at banks and on Investments in Cash Equivalents during such period, and less ---- (d) to the extent otherwise included in calculating such net interest expense, interest and financing fees that are capitalized during such period. "Interest Period" means, (a) for each Facility A Advance or Facility C --------------- Advance in US Dollars comprising part of the same Facility A Borrowing or Facility C Borrowing, respectively, the period commencing on the date of such 21 Advance and ending on the last day of the period selected by a Facility A Borrower or Facility C Borrower (other than the Australian Dollar Borrower), as the case may be, pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by such Borrower pursuant to the provisions below. The duration of each such Interest Period shall be approximately one, two, three or six months, and, subject to clause (v) below, approximately nine or twelve months, as such Borrower may, upon notice received by the Administrative Agent not later than 11:00 A.M. (New York City time in the case of a Borrowing in US Dollars or London time in the case of a Borrowing in Sterling) on, in the case of an Interest Period of approximately one, two, three or six months, the third Business Day, and, in the case of an Interest Period of approximately nine or twelve months, the fifth Business Day, prior to the first day of such Interest Period, select; provided, -------- however, that: ------- (i) such Borrower may not select any Interest Period that ends after any Reduction Date unless, after giving effect to such selection, the aggregate principal amount of Advances having Interest Periods that end on or prior to such Reduction Date shall be at least equal to the aggregate principal amount of Advances due and payable on or prior to such date after giving effect to such reduction; (ii) Interest Periods commencing on the same date for Advances comprising part of the same Borrowing shall be of the same duration; (iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall, in the case of Advances in Sterling, occur on the immediately preceding Business Day and shall, in the case of Advances in US Dollars, be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause -------- ------- the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the immediately preceding Business Day; (iv) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar 22 month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month; (v) such Borrower shall not be entitled to select an Interest Period having a duration of nine months or twelve months unless, by the close of business (New York City time, in the case of a US Dollar Borrowing, or London time, in the case of a Sterling Borrowing) on the third Business Day prior to the first day of such Interest Period, each Appropriate Lender notifies the Administrative Agent that such Lender will be providing funding for such Borrowing, failing which the Advance by each Appropriate Lender shall be for an Interest Period of approximately one, two, three or six months, as the case may be, as set forth in the Notice of Borrowing with respect to such Borrowing as an alternative to an Interest Period of nine or 12 months; (vi) all Facility A Advances or Facility C Advances in US Dollars, as the case may be, comprising part of the same Facility A Borrowing or Facility C Borrowing, respectively, shall consist of either Dollar LIBOR Advances or Sterling LIBOR Advances; and (vii) if such Borrower shall fail to select the duration of any Interest Period for any outstanding Borrowing, such Borrowing will be continued for an Interest Period of one month; and (b) for each Facility B Advance or Facility C Advance in Australian Dollars comprising part of the same Facility B Borrowing or Facility C Borrowing in Australian Dollars, as the case may be, the period commencing on the date of such Advance and ending on the last day of the period selected by the Australian Dollar Borrower pursuant to the provisions below. The Australian Dollar Borrower may select an Interest Period of up to 185 days (or such other period of time as the Australian Agent and the Australian Dollar Borrower may agree) prior to the first day of such Interest Period upon notice received by the Australian Agent not later than 11:00 A.M. (Sydney time) on the third Business Day prior to the first day of such Interest Period; provided, however, that: -------- ------- (i) the Australian Dollar Borrower may not select any Interest Period that ends after any Reduction Date unless, after giving effect to such selection, the 23 aggregate Face Value Amount of Facility B Advances or Facility C Advances in Australian Dollars, as the case may be, having Interest Periods that end on or prior to such Reduction Date shall be at least equal to the aggregate Face Value Amount of Facility B Advances or Facility C Advances in Australian Dollars, respectively, due and payable on or prior to such date after giving effect to such Facility B reduction or Facility C reduction, respectively; (ii) Interest Periods commencing on the same date for Advances comprising part of the same Facility B Borrowing or Facility C Borrowing, as the case may be, shall be of the same duration; and (iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause -------- ------- the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the immediately preceding Business Day. "Internal Revenue Code" means the U.S. Internal Revenue Code of 1986, --------------------- as amended from time to time, and the regulations promulgated and rulings issued thereunder. "Investment" in any Person means any loans or advances to such Person, ---------- any purchase or other acquisition of a business or assets of such Person as a going concern or of any capital stock or shares, warrants, rights, options, obligations or other securities of such Person, any capital contribution to such Person or any other similar investment in such Person, including, without limitation (but without duplication), any arrangement --------- pursuant to which the investor issues any Debt Guaranty or incurs any Debt of the type referred to in clause (i) of the definition of Debt in respect of such Person, but excluding (a) any Negative Pickup Arrangement and (b) --- --------- advances made to suppliers in respect of assets purchased or services contracted for in the ordinary course of business, or the acquisition of receivables owing to any member of the Reporting Group from and the making of advances to, suppliers, producers, customers and individuals constituting the "talent" of such Person to the extent that such advance or acquisition is made (A) in the ordinary course of business of such Person and is consistent with the commercial practices of such 24 Person prior to the date hereof or (B) is consistent with commercially reasonable practices at such time and is payable or dischargeable in accordance with customary terms. "Investment Preferred Stock" means Preferred Stock issued by any -------------------------- Financing Subsidiary of TNCL and guaranteed by TNCL that would be classified as equity of TNCL under A-GAAP and under generally accepted accounting principles in the United States and that is issued with an aggregate liquidation preference not exceeding US$345,000,000. "IRS" means the U.S. Internal Revenue Service. --- "Lead Managers" has the meaning specified in the recital of parties to ------------- this Agreement. "Lenders" means the Banks listed on the signature pages hereof and ------- each Eligible Assignee or Affiliate of any Lender that shall become a party hereto pursuant to Section 9.07. "LIBOR Lending Office" means, with respect to any Facility A Lender or -------------------- Facility C Lender making Advances in US Dollars, in respect of transfers of funds or Advances in US Dollars the office or offices of such Lender specified as its "Dollar LIBOR Lending Office" or, in respect of transfers of funds or Advances in Sterling, the office of such Lender specified as its "Sterling LIBOR Lending Office", opposite its name on Schedule 1 hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other offices as such Lender may from time to time specify to TNCL and the Administrative Agent. "Lien" means any lien, security interest or other charge or ---- encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any mortgage, easement, right of way or other encumbrance on title to real property or any interest or power over any flawed asset under Australian law or similar arrangement in respect of any deposit or other monetary obligation. "Loan Parties" means the Borrowers and the Guarantors. ------------ "Margin Stock" has the meaning specified in Regulation U. ------------ "Material Adverse Change" means any material adverse change in the ----------------------- business, condition (financial or otherwise), 25 operations, performance, properties or prospects of the Reporting Group taken as a whole. "Material Adverse Effect" means a material adverse effect on (a) the ----------------------- business, condition (financial or otherwise), operations, performance, properties or prospects of the Reporting Group taken as a whole, (b) the rights and remedies of the Appropriate Agents or any Lender under this Agreement or (c) the ability of the members of the Reporting Group taken as a whole to perform their Obligations under this Agreement. "Moody's" means Moody's Investors Service, Inc. ------- "Multiemployer Plan" of any Person means a multiemployer plan, as ------------------ defined in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA Affiliates is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions. "Multiple Employer Plan" of any Person means a single employer plan, ---------------------- as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of such Person or any of its ERISA Affiliates and at least one Person other than such Person and its ERISA Affiliates or (b) was so maintained and in respect of which such Person or any of its ERISA Affiliates could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. "NAHI" means News America Holdings Incorporated, a Delaware, U.S. ---- corporation. "NAHI Public Debt" means the senior unsecured Debt of NAHI with a ---------------- tenor of not less than seven years issued pursuant to a registration statement under the U.S. Securities Act of 1933, as amended, and guaranteed by the Guarantors. "Negative Pickup Arrangements" means arrangements entered into in the ---------------------------- ordinary course of business for the acquisition of some or all of the rights to television programming or films. "Net Pro Rata Share" has the meaning specified in Section ------------------ 2.02(a)(iii). 26 "News Group" means, for purposes of Section 4.01(bb) only, (a) TNCL; ---------- (b) each Related Corporation of TNCL; (c) each entity (as defined in Section 243C of the Australian Corporations Law) that TNCL or its Related Corporations control (as defined in Section 243E of the Australian Corporations Law); and (d) each Loan Party. "Non-Excluded Taxes" has the meaning specified in Section 2.10(a). ------------------ "Non-U.S. Facility A/C Lender" means any Facility A Lender or Facility ---------------------------- C Lender organized under the laws of a jurisdiction outside the United States. "Notice of Borrowing" has the meaning specified in Section 2.02(a). ------------------- "Notice of Election" has the meaning specified in Section 2.02(a). ------------------ "Obligation" means, with respect to any Person, any obligation of such ---------- Person of any kind, including, without limitation, any liability of such Person on any claim, fixed, contingent or otherwise, whether or not such claim is discharged, stayed or otherwise affected by any proceeding of the type referred to in Section 6.01(f). Without limiting the generality of the foregoing, the Obligations of the Loan Parties under this Agreement include (a) the obligation to pay principal, interest, charges, expenses, fees, attorneys' fees and disbursements, indemnities and other amounts payable by any Loan Party under this Agreement and (b) the obligation to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party. "OECD" means the Organization for Economic Cooperation and ---- Development. "Operating Income Leverage Ratio" has the meaning specified in Section ------------------------------- 5.04(a)(ii). "Optional Reduction Amount" has the meaning specified in Section ------------------------- 2.04(a). "Original Dollar Equivalent" means, in respect of an amount stated in -------------------------- US Dollars, that amount in US Dollars, and, in respect of an amount stated in Sterling or Australian 27 Dollars, the Dollar Equivalent thereof determined as of the Allocation Date. "Other Taxes" has the meaning specified in Section 2.10(b). ----------- "PBGC" means the Pension Benefit Guaranty Corporation. ---- "Permitted AWAS Transactions" means any transaction for the --------------------------- acquisition and financing of an aircraft by a member of the AWAS Group for the purpose of leasing or disposing of the same in the ordinary course of its business, provided that (a) such acquisition is effected by means of a -------- lease or purchase; (b) the terms and conditions of such transaction, taken as a whole, are no less favorable to AWA or the relevant member of the AWAS Group and the Reporting Group than the terms and conditions of all similar transactions, taken as a whole, entered into by Fox Film or the members of the AWAS Group prior to the date of this Agreement; and (c) in any such case no support is required for the obligation of the relevant member or members of the AWAS Group in relation to such transaction from any member of the Reporting Group beyond, in the case of AWA only, a support undertaking of any or all of TNCL, News Air Nevada, Inc. and any other Special Purpose Vehicle in respect of not more than 50% of certain obligations of AWA in respect of such transaction, any such undertaking to be only in respect of obligations similar to those supported in similar transactions prior to the date of this Agreement and on terms no more onerous in any respect than similar undertakings given by TNCL, News Air Nevada, Inc. and/or Fox Film in relation to similar transactions prior to the date of this Agreement. "Permitted Film Financing" means Debt and equity financing ------------------------ arrangements with third parties for the production, distribution, acquisition and/or syndication of television programming or films by any Person in which any interest held by a member of the Reporting Group is held through a Film Special Purpose Vehicle and as to which no member of the Reporting Group has incurred any Debt other than through such Film Special Purpose Vehicle. "Permitted Liens" means any of the following: (a) any Lien that --------------- arises in favor of an unpaid seller in respect of goods, plant or equipment sold and delivered to any member of the Reporting Group in the ordinary course of its business until payment of the purchase price for such goods or plant or equipment or any other goods, plant or equipment 28 previously sold and delivered by that seller (except to the extent that such Lien secures Debt or arises otherwise than due to deferment of payment of purchase price); (b) Liens arising by operation of law and in the ordinary course of business, including Liens for taxes, assessments and governmental charges or levies that are either (i) not yet overdue or (ii) being contested in good faith and by appropriate proceedings and as to which appropriate reserves are being maintained; (c) any Lien or pledge created or subsisting in the ordinary course of business over documents of title, insurance policies or sale contracts in relation to commercial goods to secure the purchase price thereof; (d) any Lien with respect to a cash deposit that secures the payment or reimbursement obligation in favor of any financial institution or government or instrumentality thereof in connection with any letter of credit, guarantee or bond, issued by or, as the case may be, granted to any financial institution, or government or instrumentality thereof, in respect of any amount payable by any member of the Reporting Group pursuant to any agreement or arrangement (other than in respect of Debt described in clause (a) or (c) of the definition of Debt of any member of the Reporting Group) entered into by any member of the Reporting Group; (e) any Lien with respect to a cash deposit that is deposited in an account with any financial institution or firm of lawyers or title company to be held in escrow in such account pursuant to any agreement or arrangement (other than in respect of Debt described in clause (a) or (c) of the definition of Debt of any member of the Reporting Group); (f) any Lien with respect to documents of title to any asset or over cash paid to purchase such asset, to the extent arising from the delivery thereof to any financial institution or firm of lawyers or title company to be held in escrow pursuant to any agreement or arrangement for the purchase or sale of such asset, provided that (i) such agreement or arrangement is -------- not in respect of Debt described in clause (a) or (c) of the definition of Debt of any member of the Reporting Group, (ii) such documents of title are held in escrow only pending the satisfaction of conditions precedent to the purchase or sale of such asset and (iii) such agreement or arrangement and the related purchase or sale are not otherwise prohibited under this Agreement; (g) Liens to secure performance bonds incurred in the ordinary course of business; (h) any Lien with respect to any asset (including, without limitation, securities, documents of title and source codes), to the extent arising from the delivery of such asset to any financial institution, firm of lawyers, title company or other entity that holds assets in escrow or custody, to be held in escrow pursuant to any 29 agreement or arrangement granted in the ordinary course of business; (i) statutory Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other like Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings, if a reserve or other appropriate provision has been made; (j) easements, rights of way and other encumbrances on title to real property that do not materially adversely affect the use of such property for its present purposes; provided that, in -------- the case of clause (a) and (c) of this definition, there is no default in the underlying obligation secured by such encumbrance or such obligation is being contested in good faith and by appropriate proceedings, and (k) any interest or power over any flawed asset or similar arrangement in respect of any deposit or other monetary obligation arising out of (i) any banker's right of set off or combination of accounts conferred in the ordinary course of banking arrangements or (ii) any sale or purchase of goods in the ordinary course of business to the extent such Lien does not secure Debt). "Permitted QPL Transactions" means (a) any subordination arrangements -------------------------- in relation to up to A$170,000,000 of moneys due or to become due by Queensland Press Limited, a Queensland, Australia corporation, or any Subsidiary thereof ("QPL"), to a Wholly Owned Subsidiary of TNCL and moneys --- due or to become due by QPL to the lenders refinancing the bank facilities of QPL outstanding on the date hereof; and (b) any subordination arrangements in relation to payments due or to become due under the proposed terms of a print center lease between QPL or one of its Subsidiaries as lessee and TNCL or one of its Subsidiaries as lessor with respect to the print center currently being constructed at Murrarie, Queensland, and moneys due or to become due by QPL to the lenders refinancing the above-referenced existing bank facilities of QPL. "Person" means an individual, partnership, corporation (including a ------ business trust), joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Plan" means a Single Employer Plan or a Multiple Employer Plan. ---- "Preferred Stock" means, with respect to any corporation, capital --------------- stock or shares issued by such corporation that is entitled to a preference or priority 30 over any other capital stock or shares issued by such corporation upon any distribution of such corporation's assets, whether by dividend or upon liquidation. "Programming Liabilities" means all Obligations incurred in the ----------------------- ordinary course of business to acquire, produce, license or distribute films or television programming, other than any such Obligations for Debt described in clause (a) of the definition of Debt and Debt Guaranties of such Debt. "Pro Rata Share" of any amount means the product of (a) such amount -------------- times (b) (x) with respect to any Facility A Lender at any time, a fraction ----- the numerator of which is such Lender's Facility A Commitment at such time and the denominator of which is Facility A at such time, or (y) with respect to any Facility B Lender at any time, a fraction the numerator of which is such Lender's Facility B Commitment at such time and the denominator of which is Facility B at such time, or (z) with respect to any Facility C Lender at such time, a fraction the numerator of which is such Lender's Facility C Commitment at such time and the denominator of which is Facility C at such time. "Public Senior Debt" means Senior Debt of any member of the Reporting ------------------ Group that is issued pursuant to a registration statement filed with the U.S. Securities and Exchange Commission or any comparable national or state regulatory or governmental body in any jurisdiction of the United States or otherwise, including, without limitation, the NAHI Public Debt. "Qualifying Lenders" has the meaning specified in Section 2.10(f)(ii). ------------------ "Redeemable" means, with respect to any capital stock or shares, any ---------- such capital stock or shares that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder, provided that no such capital stock or shares shall be considered to be -------- Redeemable, or to be Debt, solely pursuant to clause (a) or (b) hereof if the issuer's undertaking to redeem any such capital stock or shares may be satisfied in full, at its option, by the delivery to the holders thereof of ordinary shares of TNCL. 31 "Refinancing Preferred Stock" means Preferred Stock issued by TNCL or --------------------------- a Financing Subsidiary thereof to refinance the Exchangeable Preferred Stock and secured by or exchangeable into all or part of the ordinary shares of Pearson plc identified on Part V of Schedule 3. "Register" has the meaning specified in Section 9.07(c). -------- "Regulation U" means Regulation U of the Board of Governors of the ------------ U.S. Federal Reserve System, as in effect from time to time. "Related Corporation" means, in respect of a Person that is, or ------------------- becomes, subject to the Australian Corporations Law, a "related body corporate" as that expression is defined in the Australian Corporations Law (on the basis that the term "subsidiary" in that definition has the same meaning as in this Agreement). "Replaced Assets" means any equipment, fixed assets, real property or --------------- improvements that are sold or otherwise disposed of (including any trade- in) and replaced by assets that are identical or substantially similar to such replaced assets or that serve a substantially similar purpose as such replaced assets. "Reporting Group" means TNCL and its Subsidiaries. --------------- "Required Lenders" means, at any time, Lenders owed or holding at ---------------- least 60% of the sum of (a) the Original Dollar Equivalent of the sum of the aggregate principal amount of the Facility A Advances and the Facility C Advances made in US Dollars plus the aggregate Adjusted Face Value Amount ---- of the Facility B Advances and the Facility C Advances made in Australian Dollars outstanding at such time and (b) the Original Dollar Equivalent of the aggregate unused Facility A Commitments, unused Facility B Commitments and unused Facility C Commitments at such time; provided, however, if any -------- ------- Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (i) the Original Dollar Equivalent of the sum of the aggregate principal amount of the Facility A Advances and the Facility C Advances made in US Dollars plus the ---- aggregate Adjusted Face Value Amount of the Facility B Advances and the Facility C Advances made in Australian Dollars by such Lender and outstanding at such time and (ii) the Original Dollar Equivalent of the aggregate unused 32 Commitments of such Lender under all the Facilities at such time. "Responsible Officer" means any of the following Persons: the chief ------------------- financial officer, chief executive officer or the treasurer of each of TNCL, News Limited or NAHI, the chief financial officer, the managing director or the treasurer of News International plc, or the Group General Counsel of TNCL. "Rolling Period" means, for any fiscal quarter, such fiscal quarter -------------- and the preceding three fiscal quarters. Any reference in Section 5.04 of this Agreement to a Rolling Period ending on any specified date shall be construed as a reference to the Rolling Period ending closest in time to such date. "S&P" means Standard & Poor's Corporation. --- "Senior Debt" means all Debt of the Reporting Group that does not ----------- provide by its terms that it is subordinate in right of payment to the Obligations of the Loan Parties under this Agreement. "Single Employer Plan" of any Person means a single employer plan, as -------------------- defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of such Person or any of its ERISA Affiliates and no Person other than such Person and its ERISA Affiliates or (b) was so maintained and in respect of which such Person or any of its ERISA Affiliates could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated. "Solvent" and "Solvency" mean, with respect to any Person on any date, ------- -------- that on such date (a) in the case of any Person organized under the laws of a jurisdiction other than the United Kingdom, Hong Kong or any state or territory of Australia, (i) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (ii) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liabilities of such Person on its debts as they become absolute and matured, (iii) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature and (iv) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's 33 property would constitute an unreasonably small capital, (b) in the case of any Person organized under the laws of any state or territory of Australia, (i) such Person has not become unable to pay its debts generally as and when they become due and payable, (ii) such Person has not suspended payment, and has not taken steps to suspend payment, of its debts generally and (iii) such Person has not entered into or resolved to enter into, or taken steps to enter into, any arrangement, composition or compromise with its creditors or any class of them, (c) in the case of any Person organized under the laws of the United Kingdom, such Person has not become unable to pay its debts within the meaning of Section 123 of the United Kingdom Insolvency Act 1986 and (d) in the case of any Person organized under the laws of Hong Kong, such Person has not become unable to pay its debts within the meaning of Section 178 of the Companies Ordinance (CAP.32). The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Special Purpose Vehicle" means a Person that is, or was, established: ----------------------- (a) with a separate legal identity and limited liability; (b) as a member of the Reporting Group; and (c) for the sole purpose of a single transaction, or series of related transactions, and that has no assets and liabilities other than those directly acquired or incurred in connection with such transaction(s). "Sterling" and the sign "(Pounds)" each mean the lawful money of the -------- -------- United Kingdom. "Sterling Associated Costs Rate" means the cost of compliance with the ------------------------------ then existing requirements of the Bank of England in respect of Sterling LIBOR Advances, calculated by the Administrative Agent based on the rates supplied by each of the Sterling Reference Lenders by reference to the circumstances existing on the first day of each Interest Period in respect of such Advance and, if any such Interest Period in respect of such Advance exceeds three months, at three calendar monthly intervals from the first day of such Interest Period during its duration in accordance with the formula set forth on Schedule 2. "Sterling Borrowers" means Newscorp Investments Limited, News ------------------ International plc, News Securities B.V. and HarperCollins (UK). 34 "Sterling LIBOR" means, for any Interest Period for all Sterling LIBOR -------------- Advances comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by adding (a) the rate of interest determined by the Administrative Agent to be the average (rounded upward to the nearest whole multiple of 1/32 of 1% per annum, if such rate is not such a multiple) of the rate per annum at which deposits in Sterling are offered by each of the Sterling Reference Lenders to prime banks in the London interbank market at 11:00 A.M. (London time) on the first day of such Interest Period in an amount substantially equal to each such Sterling Reference Lender's Advance in Sterling comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period and (b) the Sterling Associated Costs Rate. Sterling LIBOR for any Interest Period shall be determined by the Administrative Agent on the basis of applicable rates furnished to and received by the Administrative Agent from the Sterling Reference Lenders on the first day of such Interest Period. "Sterling LIBOR Advance" means an Advance that bears interest as ---------------------- provided in Section 2.06(a)(i)(B). "Sterling Overnight Rate" means, on any date of determination, the ----------------------- rate per annum at which the Administrative Agent offers overnight deposits in Sterling to prime banks in the London interbank market at 11:00 A.M. (London time) on such day. "Sterling Reference Lenders" means Midland Bank plc, Lloyds Bank plc, -------------------------- Barclays Bank Australia Ltd., National Westminster Bank plc and Bank of Nova Scotia. "Sterling Sublimit" means, at any time, the Dollar Equivalent in ----------------- Sterling of US$1,147,500,000. "Subsidiary" of any Person means (a) any corporation, partnership, ---------- joint venture, trust or estate of which (or in which) more than 50% of (i) the issued and outstanding capital stock, voting shares or ordinary shares having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (ii) the interest in the capital or profits of such partnership or joint venture or (iii) the beneficial interest in such trust or estate, is at the time directly or indirectly owned or controlled by such 35 Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person's other Subsidiaries, (b) in the case of TNCL, Fox, Inc. and any other member of the Reporting Group of which Fox Inc. is a Subsidiary, includes Twentieth Holdings Corporation and its Subsidiaries, (c) in the case of any member of the Reporting Group, any Person in which such member holds an interest that owns Television Stations the capital structure of which is substantially similar to that of Twentieth Holdings Corporation and (d) in relation to any Person that is, or becomes, subject to the Australian Corporations Law, (i) a "subsidiary" of such Person as defined in and for the purposes of the Australian Corporations Law, (ii) if such Person has appointed or is in a position to appoint one or more directors of another corporation and that director or those directors are in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a meeting of directors of that other corporation, such other corporation, and (iii) where the expression is used in this Agreement in connection with the content or preparation of consolidated accounts (as defined in the Australian Corporations Law) in respect of a financial year ending on or after 31 December 1991, any "Entity" (as defined in Parts 3.6 and 3.7 of the Australian Corporations Law) that such Person is taken to control for the purposes of Parts 3.6 and 3.7 of the Australian Corporations Law and (e) in the case of a Person that is an English company, any other Person that is a "subsidiary" of such Person as defined pursuant to Section 736 of the English Companies Act 1985. "Surviving Debt" has the meaning specified in Section 4.01(v). -------------- "Tangible Assets" of any Person is defined as, as of any date, the --------------- amount of total assets of such Person and its Subsidiaries on a Consolidated basis at such date less goodwill, trade names, patents, ---- unamortized debt discount expense and other like intangibles, all determined in accordance with A-GAAP. "Tax" means any tax, levy, impost, duty, withholding, assessment, fee --- or other charge which is assessed, levied, imposed or collected by any government, or any governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity (including, without limitation, any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same). 36 "Termination Date" means the earlier of June 30, 2002 and the date of ---------------- termination in whole of the Facility A Commitments, the Facility B Commitments and the Facility C Commitments pursuant to Section 2.04 or 6.01. "TNCL" means The News Corporation Limited, a South Australia, ---- Australia corporation. "TOPrS/SM/ Securities" means (i) the 5% Exchangeable Trust Originated -------------------- Preferred Securities issued by News Corporation Exchange Trust pursuant to the terms of an Amended and Restated Declaration of Trust dated as of November 12, 1996 (the "Exchange Securities"), (ii) the 5% Trust Originated Preferred Securities issued by News Corporation Finance Trust pursuant to the terms of an Amended and Restated Declaration of Trust dated as of November 12, 1996 (the "Finance Securities"), (iii) the 5% Subordinated Discount Debentures due 2016 issued by NAHI pursuant to the terms of an Indenture dated as of November 12, 1996 and the guarantees thereof provided for therein, (iv) the guarantee of the Exchange Securities provided by TNCL pursuant to the terms of a Preferred Securities Guarantee Agreement dated as of November 12, 1996, (v) the guarantee of the Finance Securities provided by TNCL pursuant to the terms of a Preferred Securities Guarantee Agreement dated as of November 12, 1996 and (vi) NAHI's obligations under the Warrant Agreement dated as of November 12, 1996 and the guarantees thereof provided for therein. "U.K. Borrower" has the meaning specified in Section 2.10(f)(i). ------------- "U.S." and "US" and "United States" each mean the United States of ---- -- ------------- America and for purposes of Section 2.10 shall have the meaning specified in Section 7701 of the Internal Revenue Code. "U.S. Facility A/C Borrower" means each Facility A Borrower or each -------------------------- Facility C Borrower organized under the laws of the United States or any political subdivision thereof. "Usage Fee" means, with respect to any Facility B Borrowing or any --------- Facility C Borrowing in Australian Dollars, as the case may be, a fee for the Interest Period in respect of such Borrowing equal to the product of Applicable Margin applicable on the first day of such Interest Period times ----- an amount equal to the aggregate Face Value Amount of all Bill 37 Advances and Cash Advances comprising such Borrowing, payable in advance on the date of each such Borrowing. "Voting Stock" means capital stock or shares issued by a corporation, ------------ or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or Persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency. "Weighted Average Life" means, as of any date, with respect to any --------------------- Debt, the period obtained by dividing (a) the sum of the products of the number of years from such date to the dates of each successive scheduled principal payment (including any sinking fund payment requirements) of such Debt times the amount of each such principal payment, by (b) the sum of all ----- such principal payments. "Wholly Owned Subsidiary" of any Person means any Subsidiary of such ----------------------- Person of which 100% of the Voting Stock is owned by such Person (either directly or indirectly through other Wholly Owned Subsidiaries) and, with respect to TNCL, Fox, Inc. and any other member of the Reporting Group of which Fox, Inc. is a Wholly Owned Subsidiary, shall include Twentieth Holdings Corporation and its Wholly Owned Subsidiaries and, with respect to TNCL and any member of the Reporting Group that is a Wholly Owned Subsidiary of TNCL, any other Person in which such member holds an interest that owns Television Stations the capital structure of which is substantially similar to that of Twentieth Holdings Corporation. "Withdrawal Liability" has the meaning specified in Part I of Subtitle -------------------- E of Title IV of ERISA. SECTION 1.02. Computation of Time Periods. In this Agreement in the --------------------------- computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding". SECTION 1.03. Accounting Terms. All accounting terms not ---------------- specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the equity consolidated financial statements referred to in Section 4.01(f) ("A-GAAP"). ------ 38 SECTION 1.04. General. References in this Agreement to payment, ------- repayment or prepayment of any amount to any Lender mean payment to the Appropriate Agent for the account of such Lender. References, direct or indirect, to the payment, repayment or prepayment of Advances or the amount owing or outstanding in respect thereof mean, in the case of Facility A Advances and Facility C Advances in US Dollars, the principal amount thereof and, in the case of Facility B Advances and Facility C Advances in Australian Dollars, unless otherwise specified, the Face Value Amount thereof. References to assignees or transferees include Persons taking or acquiring an interest by novation. ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES SECTION 2.01. The Advances. (a) The Facility A Advances. (i) Each ------------ ----------------------- Facility A Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each a "Facility A Advance") in US Dollars to any ------------------ Facility A Borrower, or, if requested by any Sterling Borrower in the Notice of Borrowing delivered pursuant to Section 2.02(a) in respect of such Advance, in Sterling to such Sterling Borrower, from time to time on any Business Day during the period from the date hereof until the Termination Date in a Dollar Equivalent amount for each such Advance not to exceed such Facility A Lender's Available Facility A Commitment on such Business Day and in an aggregate Dollar Equivalent amount for all Sterling Facility A Advances not to exceed the Sterling Sublimit except under circumstances specified in Section 2.02. (ii) Each US Dollar Facility A Borrowing shall be in an aggregate amount of US$25,000,000 or an integral multiple of US$5,000,000 in excess thereof, each Sterling Facility A Borrowing shall be in an aggregate amount of (Pounds)10,000,000 or an integral multiple of (Pounds)5,000,000 in excess thereof, and each shall consist of Facility A Advances in US Dollars or in Sterling, as the case may be, made by the Facility A Lenders according to their Pro Rata Shares, provided that, notwithstanding the foregoing limitations, any -------- Facility A Borrower may in any event borrow the entire amount of each Facility A Lender's Available Facility A Commitment. Within the limits of each Facility A Lender's Available Facility A Commitment and the Sterling Sublimit, the Facility A Borrowers may borrow under this Section 2.01(a), prepay pursuant to Section 2.05(a) and reborrow under this Section 2.01(a). 39 (b) The Facility B Advances. (i) Each Facility B Lender severally ----------------------- agrees, on the terms and conditions hereinafter set forth, to accept and discount a Bill or Bills or, at the election of such Lender, make an advance in cash in respect of any Facility B Borrowing (each acceptance and discounting of one or more Bills in respect of any Borrowing being a "Bill Advance" and each ------------ cash advance, as discounted, being a "Cash Advance", and each such Bill Advance ------------ or Cash Advance, as the case may be, being a "Facility B Advance") in Australian ------------------ Dollars to the Australian Dollar Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date in a Face Value Amount for each such Advance not to exceed such Facility B Lender's Available Facility B Commitment on such Business Day. (ii) Each Facility B Borrowing shall be in an aggregate Face Value Amount of A$20,000,000 or an integral multiple of A$5,000,000 in excess thereof and shall consist of Facility B Advances made by the Facility B Lenders according to their Pro Rata Shares, provided that, notwithstanding the foregoing -------- limitations, the Australian Dollar Borrower may in any event borrow the entire amount of each Facility B Lender's Available Facility B Commitment. Within the limits of each Facility B Lender's Available Facility B Commitment the Australian Dollar Borrower may borrow under this Section 2.01(b), repay pursuant to Section 2.03(b), prepay pursuant to Section 2.05 and reborrow under this Section 2.01(b). (c) The Facility C Advances. (i) Each Facility C Lender severally ----------------------- agrees, on the terms and conditions hereinafter set forth, to make advances in cash in US Dollars to any Facility C Borrower (other than the Australian Dollar Borrower), or, if requested by the Australian Dollar Borrower in the Notice of Borrowing delivered pursuant to Section 2.02(a) in respect of such Advance, to make Bill Advances or, at the election of such Lender, Cash Advances in Australian Dollars (each such Advance, whether in US Dollars or Australian Dollars, being a "Facility C Advance") to the Australian Dollar Borrower, from ------------------ time to time on any Business Day during the period from the date hereof until the Termination Date in a Dollar Equivalent amount for each such Advance (such amount to be determined by reference to the principal amount of such Advance in the case of a Borrowing in US Dollars and the Face Value Amount in the case of a Borrowing in Australian Dollars) not to exceed such Facility C Lender's Available Facility C Commitment on such Business Day. (ii) Each US Dollar Facility C Borrowing shall be in an aggregate amount of US$25,000,000 or an integral multiple of US$5,000,000 in excess thereof, each Australian Dollar Facility C Borrowing shall be in an aggregate Face Value Amount of 40 A$20,000,000 or an integral multiple of A$5,000,000 in excess thereof, and each shall consist of Facility C Advances in US Dollars or in Australian Dollars, as the case may be, made by the Facility C Lenders according to their Pro Rata Shares, provided that, notwithstanding the foregoing limitations, any Facility C -------- Borrower may in any event borrow the entire amount of each Facility C Lender's Available Facility C Commitment. Within the limits of each Facility C Lender's Available Facility C Commitment, the Facility C Borrowers may borrow under this Section 2.01(c), repay pursuant to Section 2.03(b), prepay pursuant to Section 2.05 and reborrow under this Section 2.01(c). SECTION 2.02. Borrowings. (a) Notice of Borrowing; Making the ---------- ------------------------------- Advances, Etc. (i) Each Borrowing shall be made on notice, given not later than - ------------- 11:00 A.M. (New York City time, in the case of a Facility A Borrowing or a Facility C Borrowing in US Dollars, London time, in the case of a Facility A Borrowing in Sterling, or Sydney time, in the case of a Facility B Borrowing or a Facility C Borrowing in Australian Dollars) on the third Business Day prior to the date of the proposed Borrowing; provided that, in the case of any of (A) a -------- proposed Facility A Borrowing or Facility C Borrowing in US Dollars for a nine- or 12-month Interest Period, (B) a proposed Excess Sterling Borrowing or (C) a proposed Facility A Borrowing or Facility C Borrowing, if (x) in the case of Facility A, the aggregate principal amount of the Advances outstanding in US Dollars after giving effect to such Borrowing shall exceed 65% of Facility A or the Dollar Equivalent of the aggregate principal amount of the Advances outstanding in Sterling after giving effect to such Borrowing shall exceed 35% of Facility A or (y) in the case of Facility C, the aggregate principal amount of the Advances outstanding in US Dollars after giving effect to such Borrowing shall exceed 50% of Facility C or the Dollar Equivalent of the aggregate Face Value Amount of the Advances outstanding in Australian Dollars after giving effect to such Borrowing shall exceed 50% of Facility C, the fifth Business Day prior to the date of such proposed Borrowing, by a Borrower to the Appropriate Agent, which shall give to each Appropriate Lender prompt notice thereof by telex or telecopier specifying therein each Appropriate Lender's Pro Rata Share of such Borrowing. Each such notice of a Borrowing (a "Notice of Borrowing") ------------------- shall be by telex or telecopier, confirmed immediately in writing in substantially the form of Exhibit A-1 hereto, signed by an Authorized Officer of the requesting Borrower, specifying therein the requested (A) date of such Borrowing and the name of the Borrower that will make such Borrowing, (B) Facility under which such Borrowing is to be made, (C) currency of the Advances comprising such Borrowing, (D) aggregate principal amount or aggregate Face Value Amount of such Borrowing, (E) initial Interest Period for each 41 such Advance and, in the case of a Facility A Borrowing or a Facility C Borrowing in US Dollars requested for a nine- or 12-month Interest Period, the alternate Interest Period requested by the Borrower in the event one or more of the Appropriate Lenders will not be able to fund Advances for such nine- or 12- month Interest Period and (F) in the case of a Facility A Borrowing by a Sterling Borrower of which all or a portion is an Excess Sterling Borrowing, the amount thereof that constitutes an Excess Sterling Borrowing. In the case of a Facility B Borrowing or Facility C Borrowing in Australian Dollars, such Notice of Borrowing shall direct the Australian Agent to prepare and complete Bills in accordance with this Section 2.02 except to the extent that Appropriate Lenders have elected to make Cash Advances. Notwithstanding anything to the contrary set forth in this Section 2.02(a)(i), no Facility A Advances by any Facility A Lender shall be made in respect of an Excess Sterling Borrowing unless, by 5:00 P.M. (London time) on the third Business Day prior to the first day of such Excess Sterling Borrowing, each Facility A Lender notifies by telex or telecopier the Administrative Agent that such Facility A Lender will be able to obtain funding for its Pro Rata Share of such Excess Sterling Borrowing. (ii) The Appropriate Agent shall, (A) promptly after the determination thereof notify the requesting Borrower and each Appropriate Lender of the applicable interest rate under Section 2.06(a), in the case of Advances in US Dollars or Sterling, or the Discount Amount and the Usage Fee, in the case of Advances in Australian Dollars, (B) in the case of a request for a nine- or 12-month Interest Period in respect of a Facility A Borrowing or a Facility C Borrowing in US Dollars, send written confirmation to the Appropriate Lenders by telex or telecopier not later than 11:00 A.M. (New York time, in the case of US Dollars, and London time, in the case of Sterling) on the second Business Day prior to the date of such Borrowing confirming the actual Interest Period determined in accordance with paragraph (a)(v) of the definition of "Interest Period" having regard to the notifications referred to in that paragraph (a)(v). (C) in the case of a Facility A Borrowing in Sterling that in whole or in part constitutes an Excess Sterling Borrowing, send written confirmation by telex or telecopier not later than 11:00 A.M. (London City time) on the second Business Day prior to the date of such proposed Facility A 42 Borrowing to the requesting Facility A Borrower and to each Facility A Lender confirming the aggregate amount of such Facility A Borrowing and the portion thereof, if any, that constitutes an Excess Sterling Borrowing, and (D) unless it receives a Notice of Election from a Facility B Lender or Facility C Lender, as the case may be, pursuant to Section 2.02(a)(iii)(B) indicating such Lender's election to make its Advance in respect of any Facility B Borrowing or Facility C Borrowing in Australian Dollars as a Cash Advance, promptly prepare, complete and execute a Bill or Bills in respect thereof in accordance with Section 2.02(f) having an aggregate Face Value Amount equal to such Lender's Pro Rata Share of such Borrowing and deliver such Bill or Bills to such Lender. (iii) Each Appropriate Lender shall, (A) in the case of a Facility A Borrowing or a Facility C Borrowing in US Dollars, before 11:00 A.M. (New York City time), and in the case of a Facility A Borrowing in Sterling, before 11:00 A.M. (London time), on the date of such Borrowing, make available from its Appropriate Lending Office to the Administrative Agent at the Appropriate Agent's Account, in same day funds, such Facility A Lender's or Facility C Lender's Pro Rata Share of such Borrowing, and (B) (x) if an Appropriate Lender elects to make a Cash Advance in respect of a Facility B Borrowing or a Facility C Borrowing in Australian Dollars, before 11:00 A.M. (Sydney time) on the second Business Day prior to the date of such Borrowing, give the Australian Agent and the Australian Dollar Borrower irrevocable notice (a "Notice of Election") in writing in ------------------ substantially the form of Exhibit A-2 hereto by telex or telecopier of its election, which election shall be at the sole discretion of such Lender, to make available its Pro Rata Share of such Borrowing as a Cash Advance; (y) unless such Lender has elected to make a Cash Advance in respect of such Borrowing, accept the Bill or Bills delivered to such Lender by the Australian Agent pursuant to Section 2.02(a)(ii)(D) and insert as payee itself (if not already done) or such other person as it has arranged to purchase such Bill or Bills; and (z) before 11:00 A.M. (Sydney time) or, if later, within 45 minutes after being notified by the Australian Agent of the Discount Amount in respect of such Bill or Bills on the date of such Borrowing, make such Bill Advance or Bill Advances by discounting such Bill or Bills or make such Cash Advance, in each case by making available from its Appropriate Lending Office to the 43 Australian Agent at the Appropriate Agent's Account, in same day funds, such Lender's Pro Rata Share of such Borrowing less the sum of (1) the ---- Discount Amount for each Bill Advance or each Cash Advance made by such Lender comprising such Borrowing, plus (2) such Lender's Pro Rata Share of ---- the Usage Fee (such Pro Rata Share after taking into account the deductions specified in clauses (1) and (2) being its "Net Pro Rata Share"); provided ------------------ -------- that, if the day of such Facility B Borrowing or Facility C Borrowing in Australian Dollars is also the last Business Day of the Interest Period for an outstanding Facility B Borrowing or Facility C Borrowing in Australian Dollars, respectively, each Appropriate Lender shall deduct from the amount that it is to make available the aggregate Face Value Amount of the Facility B Advances or Facility C Advances in Australian Dollars, as the case may be, payable by the Australian Dollar Borrower to such Lender on such day. (iv) After the Appropriate Agent's receipt of funds pursuant to clause (iii) above, and upon fulfillment of the applicable conditions set forth in Article III, the Appropriate Agent will forthwith make such funds available to the requesting Borrower by crediting the Appropriate Borrower's Account. (b) Number of Borrowings. Anything in subsection (a) above to the -------------------- contrary notwithstanding, the Borrowers may make one or more separate Borrowings on any Business Day; provided that there shall be no more than an aggregate of -------- 60 separate Borrowings outstanding at any time. (c) Notice of Borrowing Irrevocable; Etc. Each Notice of Borrowing ------------------------------------ shall be irrevocable and binding on the relevant Borrower, and such Borrower shall indemnify each Appropriate Lender against any loss, cost or expense incurred by such Lender as a result of such Borrower's failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (including loss of anticipated profits, other than any amount thereof attributable to the Applicable Margin or Usage Fee, as the case may be, that would have been payable on or discounted from the Advances comprising such Borrowing), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date. (d) Advances Made Available by Appropriate Agent. Unless the -------------------------------------------- Appropriate Agent shall have received notice from an 44 Appropriate Lender prior to the date of any Borrowing under a Facility under which such Lender has a Commitment that such Lender will not make available to the Appropriate Agent such Lender's Pro Rata Share or Net Pro Rata Share, as the case may be, of such Borrowing, the Appropriate Agent may assume that such Lender has made such Pro Rata Share or Net Pro Rata Share, as the case may be, available to the Appropriate Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Appropriate Agent may, in reliance upon such assumption, make available to the relevant Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such Pro Rata Share or Net Pro Rata Share, as the case may be, available to the Appropriate Agent, such Lender and such Borrower severally agree, but without duplication, to repay to the Appropriate Agent forthwith on demand (x) in the case of Facility A Advances and Facility C Advances in US Dollars, the principal amount of such Pro Rata Share together with interest thereon or (y) in the case of Facility B Advances and Facility C Advances in Australian Dollars, the amount of such Net Pro Rata Share, together with interest thereon, for each day from the date such amount is made available to such Borrower until the date such amount is repaid to the Appropriate Agent, at (i) in the case of such Borrower, in the case of Facility A Borrowing or a Facility C Borrowing in US Dollars, the interest rate applicable at such time under clause (i) of Section 2.06(a) to Advances comprising such Borrowing and, in the case of a Facility B Borrowing or a Facility C Borrowing in Australian Dollars, the sum of the Australian Dollar Rate applicable to the discount of each Advance comprising such Borrowing plus the Applicable Margin relating thereto, and (ii) in the case of such Lender, the Appropriate Overnight Rate as determined for each day from the date such amount is made available to such Borrower until the date such amount is repaid by such Lender. If such Lender shall repay to the Appropriate Agent such corresponding amount, such amount so repaid shall constitute such Lender's Advance (which, in the case of a Facility B Lender or Facility C Lender, shall be a Bill Advance or Cash Advance determined by reference to such Lender's Notice of Election), as part of such Borrowing for purposes of this Agreement. (e) Lender Obligations. The failure of any Lender to make the Advance ------------------ to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing. 45 (f) Preparation of Bills, Etc. (i) The Australian Dollar Borrower ------------------------- irrevocably authorizes and appoints the Australian Agent and each officer of the Australian Agent as its attorney to prepare, complete and execute for and on behalf of, and in the name of, such Borrower all Bills required by such Borrower for a Facility B Borrowing or a Facility C Borrowing in Australian Dollars. The Australian Dollar Borrower hereby agrees to ratify and confirm anything done or caused to be done by the Australian Agent pursuant to such power and authority granted by such Borrower in respect of any Bill; provided that any failure of -------- the Australian Dollar Borrower to so ratify and confirm shall not affect the validity of any Bill prepared, completed and executed by the Australian Agent pursuant to such power and authority. The Australian Dollar Borrower and each Facility B Lender and Facility C Lender agree that the Australian Agent shall not be responsible for any loss or expense suffered by any Person as a result of any completion, preparation and execution of any Bill pursuant to this Section 2.02(f) or as a result of the Australian Agent's failure to effect any such completion, preparation and execution, except to the extent such loss or expense results from the gross negligence or willful misconduct of the Australian Agent. (ii) Each Bill in respect of a Bill Advance shall (A) be substantially in the form of Exhibit D with such changes therein as the Australian Agent may from time to time approve; (B) to the extent possible, have a Face Value Amount of A$500,000 or such other amount as required to reflect the Appropriate Lender's Pro Rata Share of such Borrowing; (C) be payable (so as to exclude days of grace for payment) on the last day of the designated Interest Period in respect of the requested Borrowing, which day shall be a Business Day prior to the Termination Date; (D) be drawn with (1) the Australian Dollar Borrower as drawer and the Appropriate Lender on whom it is drawn as acceptor such that such Lender will be the acceptor of a Bill or Bills having an aggregate Face Value Amount equal to such Lender's Pro Rata Share of the aggregate Face Value Amount of all Bill Advances and Cash Advances comprising such Borrowing; and (2) the Appropriate Lender as payee, or if such Lender, by notice to the Australian Agent and the Australian Dollar Borrower so requires, with the name of the payee left blank; and (E) be expressed to be payable at the Appropriate Lending Office of the Appropriate Lender or such other place in Sydney, Australia as such Lender may notify the Australian Agent and the Australian Dollar Borrower from time to time. To the extent the information specified in a Notice of Borrowing would result in a Bill or Bills being prepared and completed contrary to the foregoing, the Australian Agent may, after prior consultation with the Australian Dollar Borrower, modify such information to the extent necessary to cause such 46 Bill or Bills to be prepared and completed in accordance with the foregoing. (iii) The Australian Dollar Borrower acknowledges that, if the Australian Agent or a Facility B Lender or Facility C Lender, without actual notice to the contrary, relies on Bills that appear to have genuine signatures of officers of the Australian Dollar Borrower or signatures of officers of the Australian Agent on behalf of the Australian Dollar Borrower, then the Australian Agent or such Lender has no further duty to enquire as to the signatory's authority or any other matters in connection with execution of any Bill, and the indemnity in Section 9.04 will not be affected by any lack of authority, fraud or forgery by any Person, other than the Australian Agent or such Lender, as the case may be. (iv) The Australian Agent may, after prior consultation with the Australian Dollar Borrower, vary any of the times at or by which any thing is to be done under this Section 2.02(f) to ensure the effective operation of the procedures contemplated by this Section 2.02(f) and shall promptly notify each Appropriate Lender of any such variance. Any such variance will be binding on the Australian Dollar Borrower and each Appropriate Lender. (v) The Australian Agent and each Appropriate Lender must not use or deal with any Bill delivered to or prepared by it under this Section 2.02(f) except in accordance herewith. (vi) As between a Facility B Lender or Facility C Lender and the Australian Dollar Borrower, the Australian Dollar Borrower is primarily liable in respect of Bills accepted by such Lender for the purpose of making Facility B Advances or Facility C Advances in Australian Dollars, and, accordingly, the liability of the Australian Dollar Borrower with respect to any such Bill or Bills is not discharged if such Lender pays the Bill as acceptor or becomes the holder of the Bill at any time, whether before, on or after maturity thereof. (vii) The Australian Dollar Borrower, the Australian Agent and each Facility B Lender and Facility C Lender must observe the requirements of the Australian Bills of Exchange Act 1909 to ensure the validity of each Bill to which it is a party in respect of a Bill Advance. (g) Any Lender may designate an Affiliate to make any Advance hereunder instead of such Lender and, upon such designation, shall advise the Appropriate Agent of such Affiliate's Appropriate Lending Office. The Loan Parties agree that (i) in the event such Affiliate makes such Advance, all rights to payment under this Agreement in respect of such 47 Advance, including, without limitation, payments of principal, Face Value Amount, interest, increased costs, indemnities and similar amounts, shall inure to the benefit of such Affiliate, (ii) for purposes of the determination of the Available Facility A Commitment, Available Facility B Commitment and Available Facility C Commitment of such Lender, such Advance shall be considered to have been made by such Lender and (iii) such Affiliate shall be considered to be a "Lender" for purposes of Section 2.10 of this Agreement (but not, unless such Lender and such Affiliate enter into an Assignment and Acceptance in accordance with Section 9.07 of this Agreement, for any other purpose). Notwithstanding the foregoing provisions, in the event such Lender is entitled, on the effective date of such designation, to the benefits of a payment pursuant to Section 2.08 or subparagraph (a), (b) or (c) of Section 2.10 of this Agreement or to an indemnity or similar payment, such Affiliate shall be entitled to the same benefits of payment (in addition to any future benefits of payment that may arise with respect to such Affiliate) that would have been available to such Lender had such Lender not made such designation and then only to the extent the relevant amounts are incurred by such Affiliate. SECTION 2.03. Repayment. (a) Termination Date. On the Termination --------- ---------------- Date, each Borrower shall repay to the Appropriate Agent for the account of the Appropriate Lenders the aggregate outstanding principal amount or aggregate Face Value Amount, as the case may be, of the Advances made to such Borrower, together with all accrued interest to the date of such repayment on the principal amount repaid and all fees and other amounts due and unpaid as at such date. (b) Repayment and Netting. The Australian Dollar Borrower shall, not --------------------- later than 11:00 A.M. (Sydney time) on the last Business Day of the Interest Period for any Facility B Borrowing or Facility C Borrowing in Australian Dollars, pay to the Australian Agent for the account of the Facility B Lenders or the Facility C Lenders, as the case may be, an amount equal to the aggregate Face Value Amount of all Bill Advances and Cash Advances comprising such Borrowing; provided, however, that, if a Facility B Borrowing or Facility C -------- ------- Borrowing in Australian Dollars is to be made on the last Business Day of such Interest Period, then, subject to the satisfaction of the conditions set forth in Section 3.02 with respect to such Borrowing, the Australian Dollar Borrower shall pay only an amount equal to (i) in the case of a Facility B Borrowing, the remainder (if positive) of (x) the aggregate Face Value Amount of all such Facility B Advances due and payable on such day (after deducting therefrom the amounts, if any, in respect of such Advances then on deposit with the Australian Agent pursuant to Section 2.05(d)) 48 less (y) the aggregate Adjusted Face Value Amount of all Facility B Advances - ---- comprising the Facility B Borrowing to be made on such day or (ii) in the case of a Facility C Borrowing in Australian Dollars, the remainder (if positive) of (x) the aggregate Face Value Amount of all such Facility C Advances in Australian Dollars due and payable on such day (after deducting therefrom the amounts, if any, in respect of such Advances then on deposit with the Australian Agent pursuant to Section 2.05(d)) less (y) the aggregate Adjusted Face Value ---- Amount of all Facility C Advances in Australian Dollars comprising the Facility C Borrowing to be made on such day. Amounts repaid in respect of the Face Value Amount of Facility B Advances and Facility C Advances in Australian Dollars may be reborrowed in accordance with Sections 2.01(b) and 2.01(c), respectively. SECTION 2.04. Reduction of the Commitments. (a) Optional Commitment ---------------------------- ------------------- Reduction. (i) TNCL may, upon at least three Business Days' written notice to - --------- the Administrative Agent, terminate in whole or reduce in part the Available Facility A Commitments, the Available Facility B Commitments and the Available Facility C Commitments, ratably according to the proportion of the Original Dollar Equivalent of each Facility to the Original Dollar Equivalent amounts of the Facilities (as all such amounts shall be determined on the Business Day such reduction is made); provided, however, that each partial reduction of the -------- ------- Facilities shall be in an aggregate Dollar Equivalent amount, as determined on the day of such reduction, of US$25,000,000 or an integral multiple of US$5,000,000 in excess thereof (the amount of each such reduction of a Facility being its "Optional Reduction Amount"). ------------------------- (b) Upon each reduction of a Facility pursuant to this Section 2.04, the Commitment of each Appropriate Lender under such Facility shall be reduced by such Lender's Pro Rata Share of the amount by which such Facility is reduced. On the Termination Date, the Commitments of the Lenders shall reduce to zero. SECTION 2.05. Prepayments. (a) Optional Prepayments. Each Borrower ----------- -------- ----------- may, upon at least three Business Days' notice to the Administrative Agent and, in the case of Advances outstanding in Australian Dollars, the Australian Agent stating the proposed date and aggregate principal amount, in the case of Facility A Advances or Facility C Advances in US Dollars, or Face Value Amount, in the case of Facility B Advances or Facility C Advances in Australian Dollars, of the prepayment and the Facility to which such prepayment is to be applied, and if such notice is given such Borrower shall, prepay the outstanding principal amount of the Advances under such Facility comprising part of the same Borrowing in whole or in part among such Advances according 49 to each Appropriate Lender's Pro Rata Share of such Borrowing; provided, -------- however, that (A) each partial prepayment of Advances made in US Dollars shall - ------- be in an aggregate principal amount of US$25,000,000 or an integral multiple of US$5,000,000 in excess thereof, (B) each partial prepayment of Advances made in Sterling shall be in an aggregate principal amount of (Pounds)10,000,000 and in an integral multiple of (Pounds)5,000,000 in excess thereof and (C) each partial prepayment of Advances made in Australian Dollars shall be in an aggregate Face Value Amount of A$20,000,000 or an integral multiple of A$5,000,000 in excess thereof; and provided further that in the case of any such prepayment in respect -------- ------- of Facility B Advances or Facility C Advances in Australian Dollars, such prepayment shall be applied in accordance with Section 2.05(d). (b) Mandatory Prepayments. (i) Facility A and Facility C Prepayments. --------------------- ------------------------------------- (A) The Facility A Borrowers shall, on the last day of each Interest Period relating to each Facility A Borrowing, prepay an aggregate principal amount of the Facility A Advances then outstanding equal to the amount, if any, by which the Dollar Equivalent amount of all Facility A Advances then outstanding exceeds the amount of Facility A at such time and (B) the Facility C Borrowers shall on the last day of each Interest Period relating to each Facility C Borrowing in US Dollars prepay an amount equal to the sum of the Dollar Equivalent of the aggregate outstanding Face Value Amount of the Facility C Advances in Australian Dollars plus the aggregate principal amount outstanding of all Facility C ---- Advances in US Dollars to the extent that such amount exceeds the amount of Facility C at such time, provided that the amount of such prepayment, if any, of -------- Facility C Advances in Australian Dollars shall be applied in accordance with Section 2.05(d). The aggregate principal or Face Value Amount amount of Facility A Advances in Sterling and Facility C Advances in Australian Dollars shall be determined based on the Dollar Equivalent of the outstanding Advances in Sterling and the Dollar Equivalent of the Face Value Amount of the outstanding Advances in Australian Dollars, respectively, on the third Business Day prior to the last day of each Interest Period. (ii) Prepayment Upon Facility Reduction. Upon any optional ---------------------------------- reduction of Facility A, Facility B or Facility C pursuant to Section 2.04(a), (A) the Facility A Borrowers shall prepay an aggregate principal amount of the Facility A Advances then outstanding equal to the amount, if any, by which the Dollar Equivalent amount of such outstanding Advances exceeds Facility A after giving effect to such reduction, (B) the Australian Dollar Borrower shall prepay an aggregate Face Value Amount of the Facility B Advances then outstanding equal to the amount, if any, 50 by which the aggregate Face Value Amount of such Facility B Advances exceed Facility B after giving effect to such reduction and (C) the Facility C Borrowers shall prepay an amount equal to the Dollar Equivalent of the sum of the aggregate outstanding Face Value Amount of the Facility C Advances in Australian Dollars plus the aggregate principal amount outstanding of all ---- Facility C Advances in US Dollars to the extent that such amount exceeds Facility C after giving effect to such reduction; provided that, in the case of -------- prepayments of Facility B Borrowings and Facility C Borrowings under clauses (B) and (C), the amount of such prepayment, if any, shall be applied in accordance with Section 2.05(d). The aggregate principal or Face Value Amount amount of Facility A Advances in Sterling and Facility C Advances in Australian Dollars shall be determined by reference to the Dollar Equivalent of the outstanding Advances in Sterling and the Dollar Equivalent of the Face Value Amount of the outstanding Advances in Australian Dollars, respectively, on the third Business Day prior to the date of each such reduction of the Facilities. (iii) Minimum Outstanding Advances. On each date on which the ---------------------------- aggregate unpaid principal amount of Facility A Advances comprising any Facility A Borrowing, or the aggregate unpaid principal amount of Facility C Advances in US Dollars comprising any Facility C Borrowing in US Dollars, shall be reduced, by payment or prepayment or otherwise, to less than US$25,000,000 or (Pounds)10,000,000, as the case may be, such Facility A Advances or Facility C Advances, as the case may be, shall be prepaid in full. (c) Prepayments Made with Accrued Interest. All prepayments under -------------------------------------- this Section 2.05 in respect of Facility A Advances and Facility C Advances in US Dollars shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid. (d) Prepayments in Respect of Facility B and Facility C. The --------------------------------------------------- apportionment between Facility C Advances made in Australian Dollars and Facility C Advances made in US Dollars for the purposes of making the amount of any optional or mandatory prepayment of Facility C Advances pursuant to this Section 2.05, if any, shall be at the discretion of the relevant Borrower. In the case of all amounts in respect of any optional or mandatory prepayment that are required to be applied to Facility B Advances or to Facility C Advances made in Australian Dollars all such prepayment amounts shall be deposited to an interest bearing account of the Australian Agent and shall be paid in Australian Dollars to the Australian Agent and shall be paid by the Australian Agent to the Facility B Lenders or 51 Facility C Lenders, as the case may be, to pay the aggregate Face Value Amount of their Bill Advances and Cash Advances in Australian Dollars then outstanding on the last day of each successive Interest Period in respect thereof until all such amounts held therefor have been repaid. Any interest actually earned on such deposits shall be paid by the Australian Agent to the Australian Dollar Borrower monthly in arrears or, if sooner, upon the prepayment or repayment of all amounts (other than such interest that is needed to effect such prepayment or repayment) held in such deposit account. SECTION 2.06. Interest; Interest Rate Determination. (a) Ordinary ------------------------------------- -------- Interest. (i) Each Facility A Borrower and each Facility C Borrower (other than - -------- the Australian Dollar Borrower) shall pay interest on the unpaid principal amount of each Facility A Advance or Facility C Advance in US Dollars, as the case may be, made to it from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum: (A) If such Advance is made in US Dollars, at a rate per annum equal at all times during each Interest Period for such Advance to the sum of (x) the Dollar LIBOR for such Interest Period for such Advance plus (y) the ---- Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period that is three months from the first day of such Interest Period. (B) If such Advance is made in Sterling, at a rate per annum equal at all times during each Interest Period for such Advance to the sum of (x) the Sterling LIBOR for such Interest Period for such Advance plus (y) the ---- Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than six months, on each day that occurs during such Interest Period that is six months from the first day of such Interest Period. (ii) Subject to Section 2.06(b), no interest shall be payable in respect of a Bill Advance. Without prejudice to Section 2.06(b), the Australian Dollar Borrower shall pay interest on each Cash Advance made in Australian Dollars by making payment, pursuant to Section 2.03(b), of the Face Value Amount of such Cash Advance on the last day of the Interest Period relating thereto. 52 (b) Default Interest. Upon either any failure by any Loan Party to ---------------- make any payment under this Agreement on the date when due or the occurrence and during the continuance of an Event of Default described under Section 6.01(f), each of the Borrowers shall pay interest on (i) the unpaid principal amount of each Facility A Advance and Facility C Advance in US Dollars made to such Borrower payable in arrears on the dates referred to in clause (i)(A) or (B) or, in the case of Advances in Australian Dollars to the Australian Dollar Borrower, if not yet due, on the Face Value Amount thereof, in each case on the last day of the Interest Period applicable thereto, and in each case on demand (A) at a rate per annum equal at all times to 2% per annum above the rate per annum then required to be paid on such Advance pursuant to clause (i)(A) or (B), as the case may be, of Section 2.06(a), in the case of Facility A Advances and Facility C Advances in US Dollars, and (B) at a rate per annum equal at all times to 2% per annum of the Face Value Amount thereof in the case of Facility B Advances and Facility C Advances in Australian Dollars, and (ii) the amount of any interest, fees or other amounts payable hereunder, including, without limitation, the Face Value Amount of Facility B Advances and Facility C Advances in Australian Dollars, that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above (A) in the case of Facility A Advances and Facility C Advances in US Dollars, the Applicable Margin plus the average ---- (rounded upward to the nearest whole multiple of 1/32 of 1% per annum, if such average is not such a multiple) of the rate per annum at which deposits in US Dollars, in the case of such amounts payable in US Dollars or Sterling, in the case of such amounts payable in Sterling, are offered by each of the Dollar Reference Lenders or Sterling Reference Lenders, respectively, to prime banks in the London interbank market for such period and in an amount substantially equal to such overdue amount owed to such Dollar Reference Lender or Sterling Reference Lender, as the case may be, such rate to be determined from time to time by the Administrative Agent as provided in Section 2.06(a) as though such period selected by the Administrative Agent were an Interest Period and (B) in the case of Facility B Advances and Facility C Advances in Australian Dollars, the Applicable Margin plus the Australian Dollar Reference Rate determined for ---- each day payment was due or the occurrence of the Section 6.01(f) Event of Default, as the case may be, until the date of payment thereof. If, in the case of Facility A Advances and Facility C Advances in US Dollars, the Administrative Agent receives notice from three or more Dollar Reference Lenders or Sterling Reference Lenders, as the case may be, that deposits in US Dollars or Sterling, as the case may be, are not being offered by them to prime banks in 53 the London interbank market, for the applicable period or in the applicable amounts, then the rate under clause (i)(A) of the preceding sentence shall be 2% per annum above the cost to each Lender (as certified by such Lender and submitted to TNCL) of obtaining, from time to time, alternative funds for such period in the amount equal to such overdue amount owed to such Lender. SECTION 2.07. Fees. (a) Commitment Fee. TNCL shall pay to the ---- -------------- Appropriate Agent for the account of the Appropriate Lenders a commitment fee (the "Commitment Fee") on the average daily unused portion of each Facility A -------------- Lender's Available Facility A Commitment, each Facility B Lender's Available Facility B Commitment and each Facility C Lender's Available Facility C Commitment, which, in the case of Facility A and Facility C, shall be calculated using the Dollar Equivalent of Sterling or Australian Dollars, as the case may be, in respect of outstanding Advances in Sterling or Australian Dollars, respectively, as determined on the fifth Business Day prior to the initial Borrowing and thereafter on the fifth Business Day prior to the last Business Day of the quarter, from the date hereof in the case of each Bank and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date at the rate set forth below opposite the ratings on NAHI Public Debt given by S&P and Moody's, with the lower of such ratings to be determinative of the fee, provided that, if there is at least one rating of NAHI Public Debt from either - -------- S&P or Moody's that is categorized by such rating agency as an "investment grade" rating, then in the case of a "split" rating (including numerical modifiers and (+) or (-) as ratings), the fee at such time shall be based on the higher rating: Rate Per S&P Moody's Annum ------------------------------------------ BB or lower Ba2 or lower .3750% BB+ Ba1 .2250% BBB- Baa3 .1500% BBB Baa2 .1200% BBB+ or higher Baa1 or higher .1000% 54 In the event that the foregoing ratings change during the quarter, the Commitment Fee shall be determined based on the rate obtained by dividing (a) the sum of the products of each rate per annum applicable during such quarter times the average daily unused portion of each Facility A Lender's Available - ----- Facility A Commitment, each Facility B Lender's Available Facility B Commitment and each Facility C Lender's Available Facility C Commitment, as the case may be, by (b) each such average daily unused portion of the relevant Commitment. The Commitment Fee shall be payable in arrears on the date of the initial Borrowing hereunder, and thereafter quarterly on the last Business Day of each March, June, September and December, commencing June 30, 1993, and on the Termination Date; provided, however, that any Commitment Fee accrued with -------- ------- respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by TNCL so long as such Lender shall be a Defaulting Lender except to the extent that such Commitment Fee shall otherwise have been due and payable by TNCL prior to such time; and provided further that no Commitment Fee -------- ------- shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. (b) Administrative Agent. TNCL shall pay to the Administrative Agent -------------------- for its own account such annual fees as agreed between TNCL and the Administrative Agent in the letter dated April 18, 1994. SECTION 2.08. Increased Costs, Illegality, Substitute Rates, Etc. (a) -------------------------------------------------- If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the Dollar LIBOR Reserve Percentage) in or in the interpretation of any law or regulation which change or interpretation is issued after the date hereof or (ii) the compliance with any official directive, guideline or request from any central bank or other governmental authority (whether or not having the force of law) issued after the date hereof or any change in the interpretation or administration of any such official directive, guideline or request, there shall be any increase in the cost (except to the extent any increase in the cost is due to the effect of any Taxes or Other Taxes, or is included in the computation of the Sterling Associated Costs Rate for a Sterling LIBOR Advance made, funded or maintained by any Facility A Lender), to any Lender of agreeing to make or of making, funding or maintaining Advances, or performing any of its other obligations under or in relation to this Agreement, then TNCL shall from time to time, upon demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender additional 55 amounts sufficient to compensate such Lender for such increased cost. A certificate as to the amount of such increased cost, submitted to TNCL by such Lender, shall be conclusive and binding for all purposes, absent manifest error. (b) If any Lender determines that compliance with any law or regulation or any official directive, guideline or request from any central bank or other governmental authority (whether or not having the force of law) issued after the date hereof affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend or discount Bills hereunder and other commitments of such type, then, upon demand by such Lender (with a copy of such demand to the Administrative Agent), TNCL shall pay to the Administrative Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend hereunder. A certificate as to such amounts submitted to TNCL by such Lender shall be conclusive and binding for all purposes, absent manifest error. (c) (i) If, on or before any date on which Dollar LIBOR or Sterling LIBOR is to be determined, (A) the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful for any Facility A Lender or Facility C Lender or its Appropriate Lending Office to perform its obligations hereunder to make Facility A Advances or Facility C Advances in US Dollars, respectively, or to continue to fund or maintain Facility A Advances or Facility C Advances in US Dollars, respectively, hereunder; (B) (x) Facility A Lenders owed at least 60% of the then aggregate unpaid principal amount outstanding of the Facility A Advances notify the Administrative Agent that the Dollar LIBOR or the Sterling LIBOR for any Interest Period will not adequately reflect the cost to such Lenders of making, funding or maintaining their Facility A Advances in US Dollars or Sterling, respectively, for such Interest Period or (y) the Facility C Lenders owed at least 60% of the then aggregate unpaid principal amount outstanding of the Facility C Advances in US Dollars notify the 56 Administrative Agent that the Dollar LIBOR for any Interest Period will not adequately reflect the cost to such Lenders of making, funding or maintaining their Facility C Advances in US Dollars for such Interest Period; or (C) the Administrative Agent receives notice from three or more Dollar Reference Lenders or Sterling Reference Lenders, as the case may be, that deposits in US Dollars or Sterling, respectively, are not being offered by such Dollar Reference Lenders or Sterling Reference Lenders, as the case may be, to prime banks in the London interbank market for a period equal to the applicable Interest Period or in the applicable amounts; then the Administrative Agent shall forthwith give notice of such event to TNCL and each Facility A Lender and, in the case of Dollar LIBOR, each Facility C Lender. Within 15 days following the date of any such notice by the Administrative Agent, the Administrative Agent (after consultation with each Appropriate Lender) and TNCL shall enter into negotiations in good faith with a view to agreeing to an alternative basis acceptable to TNCL and (x) in the case of any event described in clause (A), (B) or (C) with respect to Dollar LIBOR, the Facility A Lenders and the Facility C Lenders (the "Required Facility A ------------------- Lenders" and the "Required Facility C Lenders", respectively) holding at least - ------- --------------------------- 60% of the Facility A Commitments or Facility C Commitments, as the case may be, at such time and (y) in the case of any event described in subclause (A), (B) or (C) of clause (i) with respect to Sterling LIBOR, the Required Facility A Lenders for determining the substitute rate (the "Substitute Rate") of interest --------------- that shall be applicable during such Interest Period to the Advances to which such Interest Period applies and which shall reflect the cost to the Facility A Lenders and Facility C Lenders (as agreed upon by the Required Facility A Lenders or the Required Facility C Lenders, as the case may be), in the case of Dollar LIBOR or to the Facility A Lenders (as agreed upon by the Required Facility A Lenders) in the case of Sterling LIBOR, of funding such Advances for such Interest Period from alternative sources plus the Applicable Margin ---- otherwise applicable to such Advances at such time; provided that, in each case, -------- if any such Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of "Required Facility A Lenders" or "Required Facility C Lenders", as the case may be, at such time the aggregate Commitments of such Lender at such time. If, at the expiration of 20 days from the giving of such notice by the Administrative Agent, the Administrative Agent and TNCL have agreed to such Substitute Rate, such Substitute Rate shall take effect with respect to such Interest Period from the beginning of such Interest Period. 57 (ii) If, at the expiration of 20 days from the giving of any notice by the Administrative Agent provided for in subsection (i) of this Section 2.08(c), the Administrative Agent and TNCL shall not have agreed to any Substitute Rate, the Administrative Agent shall (after consultation with each Facility A Lender and, in the case of Dollar LIBOR, each Facility C Lender) give notice to TNCL of that rate of interest (as agreed upon by the Required Facility A Lenders or Required Facility C Lenders, as the case may be), for the applicable Interest Period at which such Lenders are prepared to lend an amount equal to the then unpaid amount of the Advances to which such Interest Period applies. Such notice shall set forth the computations made by the Administrative Agent in determining such rate of interest, which computations shall reflect the cost to each such Lender of funding for such Interest Period said Advances from alternative sources plus the Applicable Margin for Dollar LIBOR and Sterling ---- LIBOR Advances. TNCL may, within ten days after the giving of any such notice by the Administrative Agent, give notice (the giving of which shall be irrevocable) to the Administrative Agent of its election to prepay such Advances in full on a date which shall be specified in such notice and which shall be a Business Day not less than seven nor more than 20 days after the date of such notice by TNCL to prepay such outstanding Advances. TNCL shall be obligated to pay on such date of prepayment the unpaid principal amount of such Advances to which such Interest Period applies, together with (x) an amount equal to the cost to such Lender of funding such Advance for the period from the last interest payment date applicable to such Advance to the date of prepayment pursuant to this subsection (ii) plus the Applicable Margin and (y) any other amounts required ---- hereunder (all such amounts as determined by such Lender and notified by the Administrative Agent to TNCL). If TNCL does not so elect to prepay such Advances, the rate of interest applicable to each such Advance in respect of such Interest Period shall be the rate as determined pursuant to the first sentence of this subsection (ii), and the Administrative Agent shall then promptly notify TNCL and each such Lender to such effect. Until agreement is reached among TNCL and the Facility A Lenders or the Facility C Lenders, as the case may be, pursuant to this Section 2.08(c), the obligation of such Lenders to make Advances in US Dollars or Sterling, as the case may be, shall be suspended. (iii) If, on or before any date on which the Australian Dollar Rate is to be determined, the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful for any Facility B Lender or Facility C Lender or its Appropriate Lending Office to 58 perform its obligations hereunder to make Facility B Advances or Facility C Advances in Australian Dollars, respectively, on such date, then the obligation of such Lenders to make Advances in Australian Dollars on such date shall be suspended. (d) Upon any Lender making a demand to TNCL for the payment of any amounts pursuant to subsection (a), (b) or (c) of this Section 2.08, TNCL may demand that such Lender assign and transfer or novate all or a portion of its rights and obligations under this Agreement in accordance with Section 9.07; provided that if, upon such demand by TNCL, such Lender elects to waive such - -------- demand hereunder, TNCL's demand for such Lender to assign and transfer or novate shall thereupon be deemed withdrawn. (e) In the event a Lender is entitled, on the effective date of an Assignment and Acceptance, to the benefits of a payment pursuant to this Section 2.08, the assignee or novatee of such Lender under such Assignment and Acceptance shall be entitled to the same benefits of payment (in addition to any future benefits of payment that may arise with respect to such assignee or novatee) that would have been available to such Lender had such Lender not entered into the related Assignment and Acceptance with such assignee or novatee and then only to the extent the relevant costs are incurred by such assignee or novatee. SECTION 2.09. Payments and Computations. (a) Each Loan Party shall ------------------------- make each payment required to be made by it hereunder, (i) in the case of an Advance or part thereof, in the currency in which such Advance is denominated at the time such Advance was made, (ii) in the case of interest, in the currency in which the Advance on which such interest is payable is denominated, and (iii) in the case of fees, costs and expenses, in the currency in which the same were incurred. (b) Each Loan Party shall make each payment hereunder not later than (i) in the case of a payment amount denominated in US Dollars, 11:00 A.M. (New York City time), (ii) in the case of a payment amount denominated in Sterling, 11:00 A.M. (London time) or (iii) in the case of a payment amount denominated in Australian Dollars, 11:00 A.M. (Sydney time), in each case to the Appropriate Agent at the Appropriate Agent's Account in same day funds. (c) The Appropriate Agent will promptly after the receipt of a payment by a Loan Party cause like funds to be distributed (i) if such payment by TNCL or such Borrower is in respect of principal, Face Value Amount, interest, fees or any other Obligation then payable hereunder to the Lenders under any 59 Facility, to the Appropriate Lenders for the account of their respective Appropriate Lending Offices ratably (based on the proportion of (A) the Dollar Equivalent amount of such Obligations due and payable to such Lender at such time to (B) the Dollar Equivalent amount of the Obligations due and payable to the Appropriate Lenders at such time) and (ii) if such payment by a Loan Party is in respect of any Obligation then payable hereunder to one Lender, to such Lender for the account of its Appropriate Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon the Administrative Agent's acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.07(c), from and after the effective date of such Assignment and Acceptance (or, in the case of a novation, such later date as may be set forth therein), the Appropriate Agent shall make all payments hereunder in respect of the interest assigned or novated thereby to the Lender assignee or novatee thereunder, and the parties to such Assignment and Acceptance shall, to the extent that the Assignment and Acceptance so requires, make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. (d) (i) All computations of interest and fees shall be made by the Appropriate Agent on the basis of a year of 360 days, in the case of amounts payable in US Dollars, or 365 days, in the case of amounts payable in Sterling or in Australian Dollars, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable. (ii) Each determination by an Appropriate Agent of a rate of interest or discount, fee or other amount hereunder shall be conclusive and binding for all purposes, absent manifest error. (e) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made (i) on the immediately preceding day, in the case of Advances in Sterling, or (ii) on the next succeeding Business Day, in the case of Advances in US Dollars or Australian Dollars (and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be), provided that, -------- if such extension would cause payment of interest on or principal of Facility A Advances or Facility C Advances in US Dollars, or the Face Value Amount of Facility B Advances or Facility C Advances in Australian Dollars, as the case may be, to be made in the next following calendar month, such payment shall be made on the immediately preceding Business Day. 60 (f) Unless the Appropriate Agent shall have received notice from a Loan Party prior to the date on which any payment is due to any Lender hereunder that such Loan Party will not make such payment in full, the Appropriate Agent may assume that such Loan Party has made such payment in full to the Appropriate Agent on such date and the Appropriate Agent may, in reliance upon such assumption, cause to be distributed to each such Lender on such due date an amount equal to the amount then due to such Lender. If and to the extent such Loan Party shall not have so made such payment in full to the Appropriate Agent, each such Lender shall repay to the Appropriate Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Appropriate Agent, at the Appropriate Overnight Rate. (g) If an Appropriate Agent receives funds for application to the Obligations under this Agreement under circumstances for which this Agreement does not specify the Advances or the Facility to which, or the manner in which, such funds are to be applied, then, if TNCL fails to promptly provide such direction upon the request of the Appropriate Agent, the Appropriate Agent may, but shall not be obligated to, elect to distribute such funds to each Lender in accordance with its ratable share (based on the proportion of (A) the Dollar Equivalent amount of such Obligations owing to such Lender at such time to (B) the Original Dollar Equivalent of the aggregate amount of the Obligations owing to the Lenders at such time), in repayment or prepayment of such of the outstanding Advances or other Obligations owed to such Lender, and for application to such scheduled reductions, as the Appropriate Agent shall direct. (h) To the extent that an Appropriate Agent receives funds for application to the Obligations under this Agreement in currencies other than the currencies required to enable the Appropriate Agent to distribute funds to the Lenders in accordance with this Section 2.09, the Appropriate Agent shall be entitled to convert or exchange such currencies into US Dollars, Sterling or Australian Dollars, as the case may be, to the extent necessary to enable the Appropriate Agent to distribute such funds in accordance with this Section 2.09; provided that each of the Loan Parties and the Lenders agrees that the - -------- Appropriate Agent shall not be responsible for any loss or expense suffered by any such Person as a result of any of the currency or exchange conversions effected pursuant hereto or as a result of the Appropriate Agent's failure to effect any such conversions or exchanges, except to the extent such loss or expense results from the gross negligence or willful misconduct of the Appropriate Agent. 61 SECTION 2.10. Taxes. (a) Payments Free of Withholdings; Gross-Up. ----- --------------------------------------- Except as otherwise provided in this Section 2.10, any and all payments by each Loan Party hereunder shall be made free and clear of and without deduction for any and all present or future Taxes, excluding, in the case of each --------- Lender and each Appropriate Agent, respectively, Taxes imposed on its overall net income (other than any such Taxes which are deductible or payable at the source and which are calculated on or by reference to the gross amount of any payment (without allowance for any deduction) derived by a Lender or the Appropriate Agent under this Agreement) and franchise taxes imposed on it by the jurisdiction under the laws of which such Lender or the Appropriate Agent (as the case may be) is organized (or any political subdivision thereof) and, in the case of each Lender, Taxes imposed on its overall net income (other than any such Taxes which are deductible or payable at the source and which are calculated on or by reference to the gross amount of any payment (without allowance for any deduction) derived by a Lender under this Agreement) and franchise taxes imposed on it by the jurisdiction of such Lender's Appropriate Lending Office (or any political subdivision thereof) (all such non-excluded Taxes being hereinafter referred to as "Non-Excluded Taxes"). If a Loan Party ------------------ shall be required by law to deduct any Non-Excluded Taxes from or in respect of any sum payable hereunder to any Lender or either Appropriate Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.10) and after payment of any Non-Excluded Taxes in respect of such additional sums such Lender or the Appropriate Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) Other Taxes. In addition, each Loan Party shall pay any present ----------- or future financial institutions duty, debits tax, stamp, documentary, excise, property or similar taxes, charges or levies that arise from any payment made hereunder by such Loan Party or from the execution, delivery, performance, release, discharge, amendment, enforcement, attempted enforcement or registration of, or otherwise with respect to, this Agreement, any agreement or document (including, without limitation, any Bill) entered into or signed under this Agreement or any transaction contemplated by this Agreement (hereinafter referred to as "Other Taxes"). ----------- 62 (c) Tax Indemnity. (i) Generally. Each Loan Party shall indemnify ------------- --------- each Lender and each Appropriate Agent for the full amount of Non-Excluded Taxes and Other Taxes paid by such Lender or the Appropriate Agent (as the case may be) in respect of either this Agreement or payments made by such Loan Party hereunder and any liability (including additions to tax and expenses) arising therefrom or with respect thereto. (ii) Non-Excluded Taxes Indemnity Limitation. With respect to each --------------------------------------- payment under this Agreement, the amount of Non-Excluded Taxes due pursuant to subparagraph (c)(i) of this Section 2.10 shall only be payable to the extent such amount exceeds the amount of Non-Excluded Taxes paid by the applicable Loan Party pursuant to subparagraph (a) of this Section 2.10 with respect to such payment. (iii) Tax Recovery Cooperation. The indemnification pursuant to this ------------------------ subparagraph (c) shall be made whether or not the Non-Excluded Taxes or Other Taxes were correctly or legally asserted; provided, however, that the applicable -------- ------- Lender or the Appropriate Agent (as the case may be) shall reasonably assist (consistent with its preexisting internal policies applied on a nondiscriminatory basis and legal and regulatory restrictions) such Loan Party to recover the amounts paid pursuant to this subparagraph (c) from the relevant taxation authority. (iv) Indemnification Period. The indemnification pursuant to this ---------------------- subparagraph (c) shall be made within 30 days from the date the applicable Lender or the Appropriate Agent (as the case may be) makes written demand therefor. (d) Tax Receipts. Within 30 days after the date of any payment of ------------ Non-Excluded Taxes or Other Taxes, the applicable Loan Party shall furnish to each Appropriate Agent, at its address referred to in Section 9.02, the original or a certified copy of a receipt evidencing payment thereof, to the extent such a receipt is issued therefor. (e) U.S. Facility A/C Borrowers. (i) Forms. (A) With respect to --------------------------- ----- each U.S. Facility A/C Borrower, each Non-U.S. Facility A/C Lender shall, on or prior to the date of its execution and delivery of this Agreement in the case of each such Non-U.S. Facility A/C Lender which is a signatory of this Agreement, and on the date of the Assignment and Acceptance pursuant to which it became a Lender in the case of each such Non-U.S. Facility A/C Lender which is not a signatory of this Agreement, and from time to time thereafter if reasonably requested in writing by the Administrative Agent or the applicable U.S. Facility A/C Borrower (but only so long 63 thereafter as such Non-U.S. Facility A/C Lender remains lawfully able to do so), provide the Administrative Agent and the applicable U.S. Facility A/C Borrower with IRS Form W-8, Form 1001 or Form 4224, as appropriate, or any successor form prescribed by the IRS, indicating that such Non-U.S. Facility A/C Lender is entitled to a complete or partial exemption from withholding on all interest to be received by such Non-U.S. Facility A/C Lender under this Agreement. (B) If the form provided by a Non-U.S. Facility A/C Lender at the time such Non-U.S. Facility A/C Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Non-Excluded Taxes unless and until such Non-U.S. Facility A/C Lender provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax only at such lesser rate shall be considered excluded from Non-Excluded Taxes for periods governed by such form. (C) If any form or document referred to in this subparagraph (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by IRS Form W-8, Form 1001 or Form 4224, that a Non-U.S. Facility A/C Lender reasonably considers to be confidential, such Non-U.S. Facility A/C Lender shall give notice thereof to the applicable U.S. Facility A/C Borrower and shall not be obligated to include in such form or document such confidential information. Within 30 days of receipt by the applicable Borrower of such notice, TNCL may, in the event TNCL reasonably determines that such IRS form is so incomplete that an increase in interest withholding tax would be required, demand that such Lender assign and transfer or novate all or a portion of its rights and obligations under this Agreement in accordance with Section 9.07; provided that -------- if, upon such demand by TNCL, such Lender elects to waive its right to demand or entitlement to the benefits hereunder in respect of such increase in interest withholding tax, TNCL's demand for such Lender to assign and transfer or novate shall thereupon be deemed withdrawn. (ii) Withdrawn Forms, etc. For any period with respect to which a -------------------- Non-U.S. Facility A/C Lender has failed to provide a U.S. Facility A/C Borrower with the appropriate form described in subparagraph (e)(i) of this Section 2.10 or is required to withdraw or cancel any such form previously submitted (other ----- than if such failure, withdrawal or cancellation is due to a change in - ---- applicable law, regulation or treaty, or in any official application or interpretation thereof, occurring after the date 64 on which such form originally was required to be provided or if such form otherwise is not required under subparagraph (e)(i)), such Non-U.S. Facility A/C Lender shall not be entitled to gross-up payments under subparagraph (a) or indemnity payments under subparagraph (c) of this Section 2.10 with respect to Non-Excluded Taxes imposed by the United States; provided, however, that should -------- ------- a Non-U.S. Facility A/C Lender become subject to Non-Excluded Taxes because of its failure to deliver a form required hereunder or be required to withdraw or cancel any such form previously submitted, such U.S. Facility A/C Borrower shall take such steps as such Non-U.S. Facility A/C Lender shall reasonably request to assist such Non-U.S. Facility A/C Lender (consistent with its preexisting internal policies applied on a nondiscriminatory basis and legal and regulatory obligations) to recover such Non-Excluded Taxes. (f) U.K. Facility A Borrowers. (i) No Facility A Borrower ------------------------- incorporated or resident for tax purposes in the United Kingdom or which receives an Advance in respect of a fixed place of business in the United Kingdom (the "U.K. Borrower") will be obligated, subject to the provisions of ------------- subparagraph (h) of this Section 2.10, to increase any payment to or indemnify any Facility A Lender under this Section 2.10 if such Lender is not or ceases to be a Qualifying Lender. (ii) For purposes of this subparagraph (f), "Qualifying Lender" ----------------- shall mean either (A) a Facility A Lender which is recognized by the United Kingdom Inland Revenue as carrying on a bona fide banking business in the United Kingdom for the purpose of Section 349 of the Income and Corporation Taxes Act 1988 and which brings payments to be received under this Agreement from the U.K. Borrower into its accounts as trading receipts for United Kingdom tax purposes, or (B) a Facility A Lender in respect of which there is a double tax treaty between such Lender's country of incorporation and the United Kingdom pursuant to which such Lender is entitled to claim and actually secures a complete exemption from tax in respect of payments of interest to be made by the U.K. Borrower to such Lender hereunder. Upon securing the aforementioned exemption, a Facility A Lender shall be treated as a Qualifying Lender. (iii) Any U.K. Borrower shall be obliged, upon request of a Facility A Lender which is not a Qualifying Lender for the purposes of this Section 2.10(f), to cooperate fully and promptly in the completion and filing of any documentation required by the United Kingdom Inspectorate of Foreign Dividends for the purposes of obtaining a direction that payments of interest may be made subject to a reduced rate of withholding tax or free of withholding tax pursuant to the provisions of an appropriate 65 United Kingdom double tax treaty or for the purpose of obtaining a refund of any Tax previously withheld. (g) Australian Dollar Borrower, etc. Neither the Australian Dollar ------------------------------- Borrower nor any Guarantor incorporated in or resident in Australia will be obligated, subject to the provisions of subparagraph (h)(i) of this Section 2.10, to increase any payment to or to indemnify the Appropriate Agent or any Facility B Lender or Facility C Lender in respect of Advances to the Australian Dollar Borrower under this Section 2.10 if such Lender does not or ceases to participate in Facility B or Facility C in respect of Advances to the Australian Dollar Borrower (as the case may be) through a lending office in Australia at or through a permanent establishment in Australia. (h) Change in Account, Branch or Law, etc. (i) Loan Party. (A) In ------------------------------------- ---------- the event any Loan Party is required by law to make any deductions from any payments under this Agreement due to (1) a change of account, permanent establishment or other branch through which such Loan Party makes the payments under this Agreement, (2) a change in the applicable law, regulation or treaty, or in any official application or interpretation thereof, or (3) any other reason, to the extent provided for in subparagraph (a) or (b) of this Section 2.10, such Loan Party shall promptly notify the applicable Lender and each Appropriate Agent of such change and shall make all payments under this Agreement in accordance with subparagraphs (a) and (b) of this Section 2.10. (B) In the event any Lender or either Appropriate Agent is required to make any payment of Non-Excluded Taxes or Other Taxes due to (1) a change of account, permanent establishment or branch through which the applicable Loan Party makes the payments under this Agreement, (2) a change in the applicable law, regulation or treaty, or in any official application or interpretation thereof, or (3) any other reason, to the extent provided for in subparagraph (c), the applicable Loan Party shall indemnify such Lender or the Appropriate Agent (as the case may be) in accordance with subparagraph (c) of this Section 2.10. (ii) Lender. Neither any Lender nor the Appropriate Agent (as the ------ case may be) shall be entitled to payment pursuant to subparagraph (a), (b) or (c) of this Section 2.10 with respect to any Non-Excluded Tax or Other Tax which resulted directly from a Lender's change in account, permanent establishment or other branch through which such Lender receives any payment pursuant to this Agreement. 66 (i) Lender Assignee. Notwithstanding the provisions of subparagraph --------------- (e), (f) or (g) of this Section 2.10, in the event a Lender is entitled, on the effective date of an Assignment or Acceptance, to the benefits of a payment pursuant to subparagraph (a), (b) or (c) of this Section 2.10, an assignee or novatee of such Lender shall be entitled to the same benefits of payment (in addition to any future benefits of payment that may arise with respect to such assignee) that would have been available to such Lender had such Lender not entered into the related Assignment and Acceptance with such assignee or novatee and then only to the extent the relevant amounts are incurred by such assignee or novatee. (j) Mitigation. (i) Lender. Except as provided in clause (i) of ---------- ------ subparagraph (h) of this Section 2.10, any Lender claiming any additional amounts payable pursuant to this Section 2.10 shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Appropriate Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the judgment of such Lender in its absolute discretion, be otherwise disadvantageous to such Lender. (ii) Loan Party. In the event any Loan Party would be required to ---------- make any payments to the applicable Lender or the Appropriate Agent (as the case may be) pursuant to this Section 2.10, such Loan Party shall use reasonable efforts (subject to such Loan Party's objective to minimize interest costs and legal and regulatory restrictions) to change the jurisdiction of the account, permanent establishment or other branch from which such payments are to be made if the making of such change would avoid the need for, or reduce the amount of, any such additional payments that may thereafter accrue. (k) Payments Characterization. All payments made by any Loan Party ------------------------- pursuant to subparagraph (a) or (c) of this Section 2.10 shall, to the extent permitted by law, be treated by such Loan Party as additional interest. (l) Replacement. Upon any Lender making a demand to TNCL or otherwise ----------- becoming entitled to the payment of any amount pursuant to this Section 2.10, TNCL may demand that such Lender assign and transfer or novate all or a portion of its rights and obligations under this Agreement in accordance with Section 9.07; provided that if, upon such demand by TNCL, such Lender elects to waive -------- such demand or entitlement hereunder, TNCL's demand for such Lender to assign and transfer or novate shall thereupon be deemed withdrawn. 67 (m) Survival of Obligations. Without prejudice to the survival of any ----------------------- other agreement of any Loan Party hereunder, the agreements and obligations of each Loan Party contained in this Section 2.10 shall survive the payment in full by the Loan Parties of all principal and interest and all other amounts due hereunder until six months after the applicable statute of limitation with respect to any Non-Excluded Taxes or Other Taxes expires. SECTION 2.11. Sharing of Payments and Losses. ------------------------------ (a) Sharing of Payments. If either: ------------------- (i) any Lender (an "Excess Amount Lender") shall obtain at any -------------------- time other than following the occurrence and during the continuance of an Event of Default any amount (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Obligations due and payable to such Excess Amount Lender under this Agreement at such time in excess of its ratable share (based on the proportion of (A) the Dollar Equivalent amount of such Obligations due and payable to such Lender under this Agreement at such time to (B) the Dollar Equivalent amount of the Obligations due and payable to all Lenders under this Agreement at such time) of payments on account of the Obligations due and payable to all Lenders under this Agreement at such time obtained by all Lenders at such time, or (ii) any Excess Amount Lender shall obtain at any time any amount (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Obligations owing (but not yet due and payable) to such Excess Amount Lender under this Agreement at such time in excess of its ratable share (based on the proportion of (A) the Original Dollar Equivalent amount of such Obligations owing (but not yet due and payable) to such Lender under this Agreement at such time to (B) the Original Dollar Equivalent amount of the Obligations owing (but not yet due and payable) to all Lenders under this Agreement at such time) of payments on account of the Obligations owing (but not yet due and payable) to all Lenders under this Agreement at such time obtained by all Lenders at such time, or (iii) upon either (A) the occurrence and during the continuance of any Event of Default under Section 6.01(a) or (f) and demand by any Lender to the Administrative Agent or (B) the occurrence and during the continuance of any Event of Default and the making of the request or the granting of 68 the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Advances due and payable pursuant to the provisions of Section 6.01 any Excess Amount Lender shall obtain at any time any amount (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Obligations due and payable to such Excess Amount Lender under this Agreement at such time in excess of its ratable share (based on the proportion of (A) the Original Dollar Equivalent amount of such Obligations due and payable to such Lender under this Agreement at such time to (B) the Original Dollar Equivalent amount of the Obligations due and payable to all Lenders under this Agreement at such time) of payments on account of the Obligations due and payable to all Lenders under this Agreement at such time obtained by all Lenders at such time (the amount by which such amount obtained by such Excess Amount Lender exceeds its ratable share thereof under clause (i), (ii) or (iii) above being an "Excess Amount"), then, in any such case, ------------- such Excess Amount Lender shall forthwith notify the Administrative Agent of the total amount received by such Excess Amount Lender and the Excess Amount thereof and shall promptly purchase from the other Lenders such participations in the Obligations due and payable or owing to them, as the case may be, or, in the case of any such Obligations owing by the Australian Dollar Borrower or a Guarantor incorporated in or resident in Australia, make such payments to the other Lenders in respect thereof, as shall be necessary to cause such Excess Amount Lender to share the Excess Amount ratably with each of them; provided, however, that, if all or any -------- ------- portion of such Excess Amount is thereafter recovered from such Excess Amount Lender, such purchase from, or payment to, each other Lender shall be rescinded and such other Lender shall repay to the Excess Amount Lender the purchase price or payment amount to the extent of such other Lender's ratable share (based on the proportion of (i) the purchase price or payment amount paid to such other Lender to (ii) the aggregate purchase price or payment amount paid to all Lenders) of such recovery together with an amount equal to such other Lender's ratable share (based on the proportion of (i) the amount of such other Lender's required repayment to (ii) the total amount so recovered from the Excess Lender) of any interest or other amount paid or payable by the Excess Amount Lender in respect of the total amount so recovered. The Loan Parties agree that any Lender so purchasing a participation from, or making a payment to, another Lender pursuant to this Section 2.11(a) may, to the fullest extent permitted by law, (i) exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as 69 if such Lender were the direct creditor of such Loan Party in the amount of such participation and (ii) in the case of such Obligations owed by the Australian Dollar Borrower or a Guarantor incorporated in or resident in Australia, exercise all its rights of payment (including the right of set- off) against the Loan Parties as fully as if the Australian Dollar Borrower or a Guarantor incorporated in or resident in Australia had made payments to the other Lenders in the amount of such Lender's payment amount. (b) Sharing of Losses. Upon either (i) the occurrence and during the ----------------- continuance of any Event of Default under Section 6.01(a) or (f) and demand by any Lender to the Administrative Agent or (ii) the occurrence and during the continuance of any Event of Default and the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Advances due and payable pursuant to the provisions of Section 6.01, and, in each case, the failure of the Loan Parties to pay in full the amounts so demanded, within five Business Days thereafter (A) the Administrative Agent shall notify the Lenders of the aggregate amount of the Obligations due and payable to all Lenders under this Agreement at such time (excluding Obligations due and payable to any Lender pursuant to Sections 2.08(a), 2.08(b), 2.10 and 9.04(c)) and of the amount payable by each Lender pursuant to clause (B) below and (B) within five Business Days after such notice, each Lender shall purchase from the other Lenders such participations in such Obligations or, in the case of any such Obligations owing by the Australian Dollar Borrower or a Guarantor incorporated in or resident in Australia, make such payments to the other Lenders in respect thereof, as shall be necessary to cause such Lender to be owed a ratable share (based on the proportion of (x) the Original Dollar Equivalent amount of the Commitments of such Lender under this Agreement on the date hereof to (y) the Original Dollar Equivalent amount of the Commitments of all Lenders under this Agreement on the date hereof) of such Obligations. The Loan Parties agree that any Lender so purchasing a participation from, or making a payment to, another Lender pursuant to this Section 2.11(b) may, to the fullest extent permitted by law, (i) exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of such Loan Party in the amount of such participation and (ii) in the case of any such Obligations owing by the Australian Dollar Borrower or a Guarantor incorporated in or resident in Australia, exercise all its rights of payment (including the right of set-off) against the Loan Parties as fully as if the Australian Dollar Borrower had made payments to the other Lenders in the amount of such Lender's payment amount. 70 SECTION 2.12. Use of Proceeds. The proceeds of the Advances shall be --------------- used for the general corporate purposes of the Reporting Group. SECTION 2.13. Evidence of Debt. (a) Each Lender shall maintain in ---------------- accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Advance owing to such Lender from time to time, including the amounts of principal, Face Value Amount, interest and fees payable and paid to such Lender from time to time hereunder. (b) The Register maintained by the Administrative Agent pursuant to Section 9.07(c) shall include a control account, and a subsidiary account for each Lender, in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the currency of the Advances comprising such Borrowing and any Interest Period applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal, Face Value Amount, interest and fees due and payable or to become due and payable from each Borrower to each Lender hereunder and (iv) the amount of any sum received by the Administrative Agent from TNCL or any Borrower hereunder and each Lender's share thereof. (c) The entries made in the Register shall be conclusive and binding for all purposes, absent manifest error. SECTION 2.14. Defaulting Lenders. (a) In the event that, at any one ------------------ time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to any Borrower and (iii) such Borrower or any other Borrower shall be required to make any payment hereunder to or for the account of such Defaulting Lender, then the paying Borrower may, so long as no Default shall occur or be continuing at such time and to the fullest extent permitted by applicable law, set off and otherwise apply the Dollar Equivalent of the Obligation of such Borrower to make such payment to or for the account of such Defaulting Lender against the Dollar Equivalent of the Obligation of such Defaulting Lender to make such Defaulted Advance to any other Borrower. In the event that a Borrower shall so set off and otherwise apply the Obligation of such Borrower to make any such payment against the Obligation of such Defaulting Lender to make any such Defaulted Advance to any other Borrower on any date, the amount so set off and otherwise applied by such Borrower shall constitute for all purposes of this Agreement an Advance by such Defaulting Lender made on such date under the Facility pursuant to which such Defaulted Advance was originally 71 required to have been made pursuant to Section 2.01 and shall satisfy such Borrower's Obligation to such Defaulting Lender to the extent of the amount so set off or otherwise applied. Such Advance shall be considered, for all purposes of this Agreement, to comprise part of the Borrowing in connection with which such Defaulted Advance was originally required to have been made pursuant to Section 2.01, provided that any such Advance deemed to have been made under -------- Facility B or Facility C in Australian Dollars shall be a Cash Advance. A Borrower shall notify each Appropriate Agent at any time such Borrower reduces the amount of the Obligation of such Borrower to make any payment otherwise required to be made by it hereunder as a result of the exercise by such Borrower of its right set forth in this subsection (a) and shall set forth in such notice (A) the name of the Defaulting Lender and the Defaulted Advance required to be made by such Defaulting Lender and (B) the Dollar Equivalent of the amount set off and otherwise applied in respect of such Defaulted Advance pursuant to this subsection (a). Any portion of such payment otherwise required to be made by a Borrower to or for the account of such Defaulting Lender which is paid by such Borrower, after giving effect to the amount set off and otherwise applied by such Borrower or any other Borrower pursuant to this subsection (a), shall be applied by the Appropriate Agent as specified in subsection (b) or (c) of this Section 2.14 after taking into account the effect of any currency exchange necessary to effect such application. (b) In the event that, at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to either Appropriate Agent or any of the other Lenders and (iii) any Borrower shall make any payment hereunder to either Appropriate Agent for the account of such Defaulting Lender, then the Appropriate Agent may, on its behalf or on behalf of such other Lenders and to the fullest extent permitted by applicable law, apply at such time the Dollar Equivalent of the amount so paid by such Borrower to or for the account of such Defaulting Lender to the payment of each such Defaulted Amount to the extent required to pay the Dollar Equivalent of such Defaulted Amount. In the event that the Appropriate Agent shall so apply any such amount to the payment of any such Defaulted Amount on any date, the amount so applied by the Appropriate Agent shall constitute for all purposes of this Agreement payment by such Lender, to such extent, of such Defaulted Amount on such date. Any such amount so applied by the Appropriate Agent shall be retained by the Appropriate Agent or distributed by the Appropriate Agent to such other Lenders in discharge of amounts due by such Borrower to such other Lenders, ratably in accordance with the respective portions of the Dollar Equivalent of such Defaulted Amounts payable at such time to the 72 Appropriate Agent and such other Lenders and, if the amount of such payment made by such Borrower shall at such time be insufficient to pay all Defaulted Amounts owing at such time to the Appropriate Agent and the other Lenders, in the following order of priority: (A) first, to the Appropriate Agents for any Defaulted Amount then ----- owing to the Appropriate Agents, each in such capacity; and (B) second, to any other Lenders for any Defaulted Amounts then owing ------ to such other Lenders, ratably in accordance with the Dollar Equivalent of such respective Defaulted Amounts then owing to such other Lenders. Any portion of such amount paid by such Borrower for the account of such Defaulting Lender remaining, after giving effect to the amount applied by the Appropriate Agent pursuant to this subsection (b), shall be applied by the Appropriate Agent as specified in subsection (c) of this Section 2.14. (c) In the event that, at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance or a Defaulted Amount and (iii) any Borrower, either Appropriate Agent or any other Lender shall be required to pay or distribute any amount hereunder to or for the account of such Defaulting Lender, then such Borrower or such other Lender shall pay such amount to the Appropriate Agent to be held by the Appropriate Agent, to the fullest extent permitted by applicable law, in escrow or the Appropriate Agent shall, to the fullest extent permitted by applicable law, hold in escrow such amount otherwise held by it. Any funds held by the Appropriate Agent in escrow under this subsection (c) shall be deposited by the Appropriate Agent in an account with the Appropriate Agent, in the name and under the control of the Appropriate Agent, but subject to the provisions of this subsection (c). The terms applicable to such account, including the rate of interest payable with respect to the credit balance of such account from time to time, shall be the Appropriate Agent's standard terms applicable to escrow accounts maintained with it. Any interest credited to such account from time to time shall be held by the Appropriate Agent in escrow under, and applied by the Appropriate Agent from time to time in accordance with the provisions of, this subsection (c). The Appropriate Agent shall, to the fullest extent permitted by applicable law, apply all funds so held in escrow from time to time to the extent necessary to make any Advances required to be made by such Defaulting Lender and to pay any amount payable by such Defaulting Lender hereunder to the Appropriate Agent or any other Lender, as and when such Advances 73 or amounts are required to be made or paid and, if the amount so held in escrow shall at any time be insufficient to make and pay all such Advances and amounts required to be made or paid at such time, in the following order of priority: (A) first, to the Appropriate Agents for any amount then due and ----- payable by such Defaulting Lender to the Appropriate Agents hereunder, each in such capacity; (B) second, to any other Lenders for any amount then due and payable ------ by such Defaulting Lender to such other Lenders hereunder, ratably in accordance with the Dollar Equivalent of such respective amounts then due and payable to such other Lenders; and (C) third, to any Borrower for any Advance then required to be made by ----- such Defaulting Lender to such Borrower pursuant to a Commitment of such Defaulting Lender, provided that any such Advance deemed to have been made -------- under Facility B or Facility C in Australian Dollars shall be a Cash Advance. In the event that such Defaulting Lender shall, at any time, cease to be a Defaulting Lender, any funds held by the Appropriate Agent in escrow at such time with respect to such Defaulting Lender shall be distributed by the Appropriate Agent to such Defaulting Lender and applied by such Defaulting Lender to the Obligations owing to such Lender at such time under this Agreement ratably in accordance with the respective amounts of such Obligations outstanding at such time. (d) The rights and remedies against a Defaulting Lender under this Section 2.14 are in addition to other rights and remedies that the Borrowers may have against such Defaulting Lender with respect to any Defaulted Advance and that the Appropriate Agents or any Lender may have against such Defaulting Lender with respect to any Defaulted Amount. ARTICLE III CONDITIONS OF LENDING SECTION 3.01. Conditions Precedent to Initial Borrowing. The ----------------------------------------- obligation of each Lender to make an Advance on the occasion of the initial Borrowing is subject to the following conditions precedent: 74 (a) There shall have occurred no Material Adverse Change since June 30, 1992. (b) There shall exist no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or, to the best knowledge of the Loan Parties, threatened before any court, governmental agency or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect or (ii) purports to materially adversely affect the Facilities or the consummation of the transactions contemplated hereby. (c) The Lenders shall be satisfied that all governmental and third party consents and approvals necessary in connection with the Facilities have been obtained (without the imposition of any conditions that are not reasonably acceptable to the Lenders) and are in effect; and no law or regulation shall be applicable that restrains, prevents or imposes materially adverse conditions upon the Facilities. (d) Contemporaneously with the initial Borrowing, all Existing Debt (other than the Surviving Debt) shall be paid in full. (e) TNCL shall have paid (i) all up-front fees to the Lenders as set forth in the Information Memorandum, (ii) all fees of the Administrative Agent and the Arrangers, in each case as agreed to between TNCL and the Administrative Agent or such Arranger and (iii) all reasonable expenses of the Administrative Agent, the Arrangers and the Lenders (including the reasonable accrued fees and expenses of Clifford Chance, Freehill Hollingdale & Page and Shearman & Sterling as counsel to the Administrative Agent and the Arrangers). (f) The Administrative Agent shall have received on or before the day of the initial Borrowing the following, each dated such day (unless otherwise specified), in form and substance reasonably satisfactory to the Administrative Agent (unless otherwise specified) and in sufficient copies for each Lender: (i) Certified copies of the resolutions of the Board of Directors of each Loan Party and, in the case of each Guarantor other than TNCL, resolutions of the shareholders of such Guarantor, in each case approving, among other things, this Agreement and the documents executed and delivered in connection herewith and 75 designating the Authorized Officers authorized to execute and deliver this Agreement and all other such documents, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement. (ii) A copy of the Constitutive Documents of each Loan Party and each amendment thereto, certified (as of a date reasonably near the date of the initial Borrowing) by, to the extent applicable, the Secretary of State of the jurisdiction of corporate organization of such Loan Party in the case of Loan Parties incorporated under the laws of a State of the United States, or by an appropriate Authorized Officer of such Loan Party in the case of the other Loan Parties as being a true and correct copy thereof or, in the case of each Loan Party that is subject to the Australian Corporations Law, certified by the company secretary as being a true and correct copy thereof. (iii) A certificate of TNCL, signed on behalf of TNCL by one of its directors, dated the date of the initial Borrowing (the statements made in which certificate shall be true on and as of the date of the initial Borrowing), certifying as to (A) the absence of any amendments to the Constitutive Documents of any Loan Party since the date of the certificate referred to in Section 3.01(f)(ii), (B) in the case of Loan Parties incorporated under the laws of a State of the United States, a true and correct copy of the bylaws of such Loan Party as in effect on the date of the initial Borrowing, (C) the due incorporation and, in the case of each Loan Party that is incorporated under the laws of a State of the United States, the good standing of such Loan Party as a corporation organized under the laws of its jurisdiction of incorporation, and the absence of any proceeding for the dissolution or liquidation of such Loan Party, (D) the truth of the representations and warranties contained in this Agreement as though made on and as of the date of the initial Borrowing and (E) the absence of any event occurring and continuing, or resulting from the initial Borrowing, that constitutes a Default. (iv) A certificate of an Authorized Officer of each Loan Party certifying the names and true signatures of the Authorized Officers of such Loan Party and, in the case of each Loan Party that is incorporated under the laws of a jurisdiction other than a State of the United States or the United Kingdom, a power of attorney granted by such Loan Party appointing the Person or Persons authorized to execute 76 and deliver this Agreement and all other documents executed in connection herewith. (v) A certificate of an Authorized Officer of TNCL, dated the date of the initial Borrowing, certifying that attached thereto is a substantially complete and accurate organizational chart of the Reporting Group showing as of the date of the initial Borrowing all Loan Parties and their Subsidiaries and the shareholders of such Persons. (vi) In relation to each Loan Party that is subject to the Australian Corporations Law: (A) such forms lodged with the Australian Securities Commission in accordance with Section 242(7) or Section 361(1) of the Australian Corporations Law notifying the Australian Securities Commission of the particulars or any change in the particulars of the officers of such Loan Party as will evidence the appointment of the current officers of such Loan Party; and (B) before, but not earlier than two Business Days before the execution of this Agreement, a certificate of a director and secretary of such Loan Party as Authorized Officers of such Loan Party substantially in the form of Exhibit C-4 from each such Loan Party that it is a public company for the purposes of Section 234 of the Australian Corporations Law and is a Guarantor and otherwise complying with Section 234(10) of the Australian Corporations Law. (vii) A favorable opinion of Arthur M. Siskind, Group General Counsel of TNCL, in substantially the form of Exhibit E-1 hereto and as to such other matters as any Lender through the Administrative Agent may reasonably request. (viii) A favorable opinion of Squadron, Ellenoff, Plesent, Sheinfeld & Sorkin, counsel to the Loan Parties in the United States, in substantially the form of Exhibit E-2 hereto and as to such other matters as any Lender through the Administrative Agent may reasonably request. (ix) Favorable opinions of Allen & Overy, counsel to the Loan Parties in the United Kingdom and in Hong Kong, in substantially the form of Exhibits E-3(1) and E-3(2) hereto, respectively, and as to such other matters as any Lender through the Administrative Agent may reasonably request. (x) A favorable opinion of Clayton Utz, counsel to the Loan Parties in Australia, in substantially the form 77 of Exhibit E-4 hereto and as to such other matters as any Lender through the Administrative Agent may reasonably request. (xi) A favorable opinion of Nauta Dutilh, counsel to the Loan Parties in the Netherlands, in substantially the form of Exhibit E-5 hereto and as to such other matters as any Lender through the Administrative Agent may reasonably request. (xii) A favorable opinion of Shearman & Sterling, counsel for the Appropriate Agents and the Arrangers, in substantially the form of Exhibit E-6 hereto. (xiii) Completed requests for information listing the financing statements, or other evidence of Liens, filed in the jurisdictions of the Loan Parties and each other Person identified on Part IV of Schedule 3 naming any such Loan Party as debtor. SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation -------------------------------------- of each Appropriate Lender to make an Advance on the occasion of each Borrowing (including the initial Borrowing) shall be subject to the further conditions precedent that on the date of such Borrowing (a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the requesting Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by such Borrower that on the date of such Borrowing such statements are true): (i) the representations and warranties contained in this Agreement are correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, other than any such representations and warranties that, by their terms, are stated to be true only as of a particular date; and (ii) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, that constitutes a Default; and (b) the Administrative Agent shall have received such other opinions, authorizations, documentation and information as any Appropriate Lender through the Administrative Agent may reasonably request. 78 SECTION 3.03. Determinations Under Section 3.01. For purposes of --------------------------------- determining compliance with the conditions specified in Section 3.01, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Appropriate Agent responsible for the transactions contemplated by this Agreement shall have received notice from such Lender prior to the initial Borrowing specifying its objection thereto and such Lender shall not have made available to such Appropriate Agent such Lender's Pro Rata Share of such Borrowing. ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01. Representations and Warranties of the Loan Parties. -------------------------------------------------- Each Loan Party represents and warrants as follows: (a) Such Loan Party (i) is a corporation duly organized, validly existing and, in the case of each Loan Party incorporated under the laws of a State of the United States, in good standing under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and, in the case of each Loan Party incorporated under the laws of a State of the United States, is in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed, except, in each case, to the extent the failure to be so qualified and in good standing would not have a Material Adverse Effect and (iii) has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (b) Attached to the certificate of an Authorized Officer of TNCL delivered on the date of the initial Borrowing is a substantially complete and accurate organizational chart of the Reporting Group showing as of such date all Loan Parties and their Subsidiaries and the shareholders of such Persons. (c) The execution, delivery and performance by each Loan Party of this Agreement and the other transactions contemplated hereby, are within such Loan Party's corporate powers, have been duly authorized by all necessary corporate 79 action, and do not (i) contravene such Loan Party's Constitutive Documents, (ii) violate any applicable law (including, without limitation, the U.S. Securities Exchange Act of 1934 and the U.S. Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule, regulation (including, without limitation, Regulation X of the Board of Governors of the U.S. Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which would be reasonably likely to have a Material Adverse Effect. (d) All authorizations or approvals and other actions by, and all notices to and filings with, any governmental authority or regulatory body or any other third party that are required to be obtained or made by the Loan Parties for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of this Agreement, or for the consummation of the other transactions contemplated hereby or (ii) the exercise by either Appropriate Agent or any Lender of its rights under this Agreement have been duly obtained, taken, given or made and are in full force and effect. (e) This Agreement has been duly executed and delivered by each Loan Party party hereto. This Agreement is the legal, valid and binding obligation of each Loan Party party hereto, enforceable against such Loan Party in accordance with its terms. (f) The Consolidated balance sheet of TNCL as at June 30, 1992, and the related Consolidated statements of income and cash flows of TNCL for the fiscal year then ended, accompanied by an opinion of Arthur Andersen, independent public accountants, copies of which have been furnished to each Lender, fairly present the Consolidated financial condition of TNCL as at such date and the Consolidated results of the operations of TNCL and its Subsidiaries for 80 the period ended on such date, all in accordance with generally accepted accounting principles applied on a consistent basis, and since June 30, 1993, there has been no Material Adverse Change. (g) The Consolidated forecasted balance sheet information of the Reporting Group delivered to the Lenders on or before the date of the initial Borrowing was prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in the light of conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, TNCL's best estimate of the Reporting Group's future financial performance. (h) Neither the Information Memorandum nor any other information, exhibit or report furnished by any Loan Party to either Appropriate Agent or any Lender in connection with the negotiation of this Agreement or pursuant to the terms of this Agreement contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading. (i) There is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of their Subsidiaries, including any Environmental Action, pending or, to the best knowledge of each Loan Party, threatened before any court, governmental agency or arbitrator that would be reasonably likely to have a Material Adverse Effect. (j) No Loan Party is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock. (k) Following application of the proceeds of each Advance, not more than 25 percent of the value of the assets (either of any Loan Party or of the Reporting Group on a Consolidated basis) subject to the provisions of Section 5.02(a) or subject to any restriction contained in any agreement or instrument between any Loan Party and any Lender or any Affiliate of any Lender relating to Debt and within the scope of Section 6.01(e) will be Margin Stock. (l) (i) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan of any Loan Party 81 or any ERISA Affiliate of any Loan Party, (ii) none of the Loan Parties and none of their ERISA Affiliates has incurred or is reasonably likely to incur any Withdrawal Liability to any Multiemployer Plan of any Loan Party or any ERISA Affiliate of any Loan Party, and (iii) none of the Loan Parties and none of their ERISA Affiliates has been notified by the sponsor of a Multiemployer Plan of any Loan Party or any ERISA Affiliate of any Loan Party that such Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, where in connection with any and all such ERISA Events, Withdrawal Liabilities and Multiemployer Plan reorganizations and terminations the Loan Parties and their ERISA Affiliates have incurred or are reasonably likely to incur liability that in the aggregate exceeds $100,000,000. (m) Neither the business nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that would be reasonably likely to have a Material Adverse Effect. (n) The operations and properties of each Loan Party and each of its Subsidiaries comply in all respects with all Environmental Laws, all necessary Environmental Permits have been obtained and are in effect for the operations and properties of each Loan Party and its Subsidiaries and each Loan Party and its Subsidiaries are in compliance in all respects with all such Environmental Permits, except to the extent the failure to so comply with Environmental Laws or to obtain and comply with all necessary Environmental Permits would not be reasonably likely to have a Material Adverse Effect, and no circumstances exist that would be reasonably likely to (i) form the basis of an Environmental Action against any Loan Party or any of its Subsidiaries or any of their properties that would be reasonably likely to have a Material Adverse Effect or (ii) cause any such property to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law that would be reasonably likely to have a Material Adverse Effect. (o) None of the properties of any Loan Party or any of its Subsidiaries is listed or proposed for listing on the National Priorities List under CERCLA or on the 82 Comprehensive Environmental Response, Compensation and Liability Information System maintained by the Environmental Protection Agency or any analogous state list of sites requiring investigation or cleanup or is adjacent to any such property, and no underground storage tanks, as such term is defined in 42 U.S.C.(S) 6991, are located on any property of any Loan Party or any of its Subsidiaries or, to the best of its knowledge, on any adjoining property to the extent that in each case the liability of the members of the Reporting Group in connection therewith would be reasonably likely to have a Material Adverse Effect. (p) Neither any Loan Party nor any of its Subsidiaries has transported or arranged for the transportation of any Hazardous Materials to any location that is listed or proposed for listing on the National Priorities List under CERCLA or on the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the Environmental Protection Agency or any analogous state list, Hazardous Materials have not been generated, used, treated, handled, stored or disposed of on, or released or transported to or from, any property of any Loan Party or any of its Subsidiaries or, to the best of its knowledge, any adjoining property, except in compliance with all Environmental Laws and Environmental Permits, and all other wastes generated at any such properties have been disposed of in compliance with all Environmental Laws and Environmental Permits, except, in each case, to the extent that the liability of the members of the Reporting Group for non-compliance therewith would not be reasonably likely to have a Material Adverse Effect. (q) Neither any Loan Party nor any of its Subsidiaries is a party to any indenture, loan or credit agreement or any lease or other agreement or instrument or subject to any charter or corporate restriction that would be reasonably likely to have a Material Adverse Effect. (r) Each Loan Party and each of its Subsidiaries has on a timely basis properly filed, caused to be filed or be included in all material tax returns, reports and statements (whether federal, provincial, state, local or otherwise) to the extent, in its best judgment, required by law as administered by applicable taxation authorities to be filed in all jurisdictions in which such returns, reports and statements are required to be filed and has on a timely basis paid all Taxes shown thereon to be due (taking into account any applicable extensions with respect thereto), 83 together with applicable interest and penalties or has provided sufficient reserve with respect to such Taxes due. (s) The aggregate unpaid amount, as of the date hereof, of adjustments to the Tax liability of the Loan Parties and their Subsidiaries proposed by all taxing authorities would not be reasonably likely to have a Material Adverse Effect. (t) Neither any Loan Party nor any of its Subsidiaries is an "investment company," or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the U.S. Investment Company Act of 1940, as amended. Neither the making of any Advances nor the application of the proceeds or repayment thereof by any Loan Party, nor the consummation of the other transactions contemplated hereby, will violate any provision of such Act or any rule, regulation or order of the U.S. Securities and Exchange Commission thereunder. (u) Set forth on Part I of Schedule 3 hereto is a complete and accurate list, as of the date hereof, of all existing Debt (the "Existing -------- Debt") of the Reporting Group, showing the principal amount outstanding ---- thereunder or, in the case of overdraft facilities, the commitment amount thereunder; provided that Existing Debt of the type described in clauses -------- (b), (d) and (i) of the definition of Debt and Debt of a type permitted by clauses (iii) through (vi) and (xi) through (xiii) of Section 5.02(b) shall not be set forth on such Schedule. (v) Set forth on Part III of Schedule 3 hereto is a complete and accurate list, as of the date hereof, of all Existing Debt of the Reporting Group that will not be refinanced (such Debt being the "Surviving Debt") -------------- with the proceeds of the Advances under this Agreement, showing the principal amount outstanding thereunder or, in the case of overdraft facilities, the commitment amount thereunder; provided that Surviving Debt -------- of the type described in clauses (b), (d) and (i) of the definition of Debt and Debt of a type permitted by clauses (iii) through (vi) and (xi) through (xiii) of Section 5.02(b) shall not be set forth on such Schedule. (w) Set forth on Part IV of Schedule 3 hereto is a complete and accurate list, as of the date hereof, of all existing Liens (such Liens being the "Existing Liens") revealed by searches of public records with -------------- respect to the Loan Parties and such of their Subsidiaries as to which 84 searches were performed (other than Permitted Liens and Liens permitted by clauses (v), (vi) and (vii) of Section 5.02(a)), showing as of the date hereof the property encumbered by such Lien. (x) Each Loan Party is Solvent. (y) The Obligations of each Loan Party under this Agreement constitute unconditional general obligations of such Loan Party ranking at least pari passu with all other Senior Debt of such Loan Party. ---- ----- (z) The proceeds of the Debt being refinanced under this Agreement in accordance with Section 2.12 were not used, when originally received, to acquire shares in any Guarantor that is subject to the Australian Corporations Law or in any holding company (as defined in the Australian Corporations Law) of any such Guarantor. (aa) The entry into and performance by TNCL of its obligations under this Agreement is for its commercial benefit and is in its commercial interests. (ab) As of the date hereof, the majority of the directors of each member of News Group and of its Related Corporations that is a public company for the purposes of Part 3.2A of the Australian Corporations Law have made no election under Section 1376(2) of the Australian Corporations Law. ARTICLE V COVENANTS OF THE LOAN PARTIES SECTION 5.01. Affirmative Covenants. So long as any Advance shall --------------------- remain unpaid or any Lender shall have any Commitment hereunder, each Loan Party will: (a) Compliance with Laws, Etc. Comply, and cause each of its ------------------------- Subsidiaries to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970. (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its --------------------- Subsidiaries to pay and discharge, before 85 the same shall become delinquent or overdue, (i) all Taxes imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property, except to the extent that, in respect of clauses (i) and (ii), the failure to pay and discharge such Taxes and claims would not be reasonably likely to have a Material Adverse Effect; provided, however, that neither any Loan Party nor any of its Subsidiaries -------- ------- shall be required to pay or discharge any such Tax or lawful claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, but only so long as such contest could not subject any Lender to (A) any criminal penalty or liability or (B) any material civil penalty or liability for which such Lender is not indemnified under Section 9.04. (c) Compliance with Environmental Laws. Comply, and cause each of its ---------------------------------- Subsidiaries and require all lessees and other Persons occupying its properties to comply, in all material respects, with all Environmental Laws and Environmental Permits applicable to its operations and properties; obtain and renew all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws, except, in each case, to the extent that the failure to so comply or otherwise to perform in accordance with the foregoing would not be reasonably likely to have a Material Adverse Effect; provided, however, that neither any Loan Party nor any of its -------- ------- Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances. (d) Maintenance of Insurance. Maintain, and cause each of its ------------------------ Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is consistent with prudent business practice for the industries in which such Loan Party or such Subsidiary operates. (e) Preservation of Corporate Existence, Etc. Preserve and maintain ---------------------------------------- its corporate existence, rights (per statute and its corporate Constitutive Documents) and 86 franchises; provided, however, that each Loan Party may consummate any -------- ------- merger or consolidation permitted under Section 5.02(c); and provided -------- further that no Loan Party shall be required to preserve any right or ------- franchise if the Board of Directors of such Loan Party shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Loan Party and that the loss thereof is not disadvantageous in any material respect to such Loan Party or the Lenders. (f) Visitation Rights. At any reasonable time and from time to time, ----------------- permit either Appropriate Agent or any of the Lenders or any agents or representatives thereof, to examine the records and books of account of, and visit during normal business hours the properties of, such Loan Party and any of its Subsidiaries, and to discuss the affairs, finances and accounts of such Loan Party and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants. (g) Keeping of Books. Keep, and cause each of its Subsidiaries to ---------------- keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of such Loan Party and each such Subsidiary in accordance with generally accepted accounting principles and laws applicable to such Person in effect from time to time. (h) Maintenance of Properties, Etc. Maintain and preserve, and cause ------------------------------ each of its Subsidiaries to maintain and preserve, all of its material properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted. (i) Transactions with Affiliates. Until such time as there is no ---------------------------- restriction or limitation under any NAHI Public Debt of the type contained in Section 4.06(iv) of the indenture relating to NAHI's 12% Senior Notes due 2001 or any other provision of similar import, conduct, and cause each of its Subsidiaries to conduct, all material transactions otherwise permitted under this Agreement with any of their Affiliates on terms that are fair and reasonable and no less favorable to such Loan Party or such Subsidiary than it would obtain in a comparable arm's-length transaction with a Person not an Affiliate, other than (i) transactions among TNCL and/or among the members of the Reporting Group that are Wholly Owned Subsidiaries of TNCL, (ii) Permitted AWAS Transactions, (iii) Permitted Film Financings, (iv) loans to employees of any member of the 87 Reporting Group, (v) the payment of dividends, (vi) existing investments, (vii) Investments by TNCL in an Affiliate in consideration for the issuance of ordinary shares or other equity capital (other than Redeemable Preferred Stock) of TNCL or any Investment Preferred Stock to such Affiliate, (viii) transactions with any of their Affiliates conducted in the ordinary course of business of such Loan Party or Subsidiary except to the extent that such transaction is in connection with (A) the creation, incurrence, assumption or existence of any Lien or Debt, (B) any merger or consolidation, (C) the making or holding of any Investment or (D) the prepayment, redemption, purchase, defeasement or other satisfaction of any Debt and (ix) Permitted QPL Transactions; provided, however, that, notwithstanding the foregoing, -------- ------- transactions entered into by any member of the Reporting Group with any Affiliate thereof (a "Subject Affiliate"), which transactions are entered ----------------- into by other shareholders or partners of such Subject Affiliate that are not otherwise themselves Affiliates of such member and on the same terms and for the same consideration (taking into account their relative percentage ownership of such Subject Affiliate) as such member of the Reporting Group shall be deemed to have been entered into on an arm's- length basis. (j) Additional Guarantors. (i) Promptly cause to become a Guarantor --------------------- under this Agreement in a writing satisfactory in form and substance to the Administrative Agent (A) each of its Subsidiaries (other than News U.S. Holdings Pty Ltd. and News Group Holdings Pty Ltd.) that, as determined by reference to the annual audited Consolidated statements of income and cash flows of TNCL for the Fiscal Year ended immediately prior to the date of determination, either individually, or together with such Subsidiary's Consolidated Subsidiaries, has Consolidated operating income equal to or greater than 5% or more of the Consolidated operating income of TNCL, provided that, if the Consolidated assets of TNCL attributable to the -------- Guarantors aggregate less than the aggregate principal amount of all Consolidated indebtedness of TNCL that is not by its terms subordinated to the Obligations of the Loan Parties under this Agreement, in each case as determined by reference to the annual audited Consolidated balance sheet of TNCL, then the Loan Parties shall promptly cause to become Guarantors such additional Subsidiaries as would cause the total assets of TNCL so attributable to the Guarantors hereunder to exceed the aggregate principal amount of such indebtedness, (B) any Subsidiary (other than a Subsidiary referred to in clause (ii) below) that is, immediately after the initial Borrowing, and any Subsidiary that thereafter becomes, a 88 guarantor of any Public Senior Debt and (C) any Subsidiary that is required to be added as a Guarantor pursuant to Section 8.05. (ii) Upon the earlier of the first anniversary of the date hereof and the occurrence of an Event of Default, cause to become a Guarantor under this Agreement in a writing satisfactory in form and substance to the Administrative Agent, each of Advertiser Newspapers Limited, B.B.A.C. Pty. Limited, Control Investments Pty. Limited, FoxVideo, Inc., News Air H.K. Limited, News Group Boston, Inc., News Publishers Limited, Ordinto Investments, TCF Distributing, Inc., TENC, Inc., Times Newspapers Limited, Twentieth Century Fox International Corporation, Twentieth Century-Fox TV International, Inc. and World Publishing Services, Inc.; provided, however, that no such Person shall be required -------- ------- to become a Guarantor under this clause (ii) if it is not, at such time, a guarantor of any Public Senior Debt. (iii) In the case of each Person that becomes a Guarantor under this Agreement, TNCL shall ensure that (x) before the execution of any guarantee under this Section 5.01(k), the Administrative Agent receives the items referred to in Section 3.01(f) in respect of the new Guarantor and its execution of the writing referred to above, and a certificate of an Authorized Officer of TNCL with respect to the representations and warranties in Section 4.01; (y) before, but not earlier than two Business Days before, execution of any guarantee under this Section 5.01(k) by any Guarantor that is a public company for the purposes of Section 234 of the Australian Corporations Law, such Guarantor executes and delivers to the Administrative Agent a certificate of a director and secretary of such Guarantor substantially in the form of Exhibit C-4 and in form and substance in compliance with Section 234(10) of the Australian Corporations Law; and (z) all laws (including, without limitation, if applicable, Part 3.2A of the Australian Corporations Law) in connection with the execution, validity and enforceability of a new guarantee under this Section 5.01(k) have been complied with; provided that clause (y) will not apply if (1) -------- Section 234 of the Australian Corporations Law has been repealed before the time of execution of the relevant new guarantee under this Section 5.01(k) or (2) the Administrative Agent is satisfied that, as a result of one or more elections made under Section 1376(2) of the Australian Corporations Law, Part 3.2A of the Australian Corporations Law applies to the exclusion of Section 234 of the Australian Corporations Law, 89 before execution of the relevant new guarantee under this Section 5.01(k). SECTION 5.02. Negative Covenants. So long as any Advance shall ------------------ remain unpaid or any Lender shall have any Commitment hereunder, no Loan Party will: (a) Liens, Etc. Create, incur, assume or suffer to exist, or permit ---------- any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file, or permit any of its Subsidiaries to sign or file, under the Uniform Commercial Code of any jurisdiction of the United States or under the laws of any other jurisdiction, a financing statement or other similar document that names such Loan Party or any of its Subsidiaries as debtor, or sign, or permit any of its Subsidiaries to sign, any security agreement authorizing any secured party thereunder to file such financing statement or other similar document, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, excluding, however, from the operation of the foregoing --------- ------- restrictions the following: (i) Existing Liens, and Liens replacing, extending or renewing any such Existing Liens upon or in the same property theretofore subject to such Existing Lien or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Debt secured by such Existing Lien; (ii) Permitted Liens; (iii) Liens securing Permitted AWAS Transactions; (iv) Liens securing Debt permitted pursuant to Section 5.02(b) and other Obligations that are not otherwise permitted to be secured pursuant to this Section 5.02(a) and Attributable Debt, provided that the value of the aggregate assets of the Reporting Group -------- encumbered by all such Liens shall not exceed 10% of the Consolidated Tangible Assets of the Reporting Group; (v) Liens on the assets of Film Special Purpose Vehicles securing Debt incurred for the purpose of effecting Permitted Film Financings; 90 (vi) Liens created in favor of (x) a producer or supplier of television programming or films or (y) any other Person in connection with the financing of the production, distribution, acquisition and/or syndication of television programming or films, in each case above on or with respect to distribution revenues and/or distribution rights which arise from or are attributable to such television programming or films; (vii) Liens under construction, performance and similar bonding arrangements entered into in the ordinary course of business; (viii) Liens on property purchased after the date of this Agreement provided that (A) any such Lien is created solely for the purpose of securing Debt incurred to finance the cost (including the cost of construction) of the item of property subject thereto and such Lien is created prior to, at the time of, or within 270 days after the later of, the acquisition, the completion of construction or the commencement of the full operation of such property, or for the purpose of securing Debt incurred to refinance any Debt previously so secured, (B) the principal amount of Debt secured by such Lien does not exceed 100% of such cost, (C) such Lien does not extend to or cover any other property other than such item or property and any improvements on such item, and (D) the incurrence of such Debt is permitted by Section 5.02(b); (ix) in the case of a Person becoming a member of the Reporting Group after the date of this Agreement, any Lien with respect to the assets of such Person at the time it became a member of the Reporting Group, provided that such Lien is not created in -------- contemplation of, or in connection with, such Person becoming a member of the Reporting Group; (x) Liens on accounts receivable in connection with any financing permitted pursuant to Section 5.02(b); and (xi) any extensions, renewals or replacements of any of the Liens referred to in the foregoing clauses (v), (viii) and (ix), provided such extensions, renewals or replacements are limited to all or part of the property securing the original Lien or any replacement of such property. 91 (b) Debt. Create, incur, assume or suffer to exist, any Debt, ---- unless, immediately after giving effect thereto, no Default shall have occurred and be continuing. For purposes of this covenant, the calculation of the Balance Sheet Leverage Ratio shall give pro forma effect only to both the incurrence of such Debt and the application of the proceeds thereof to the repayment of any other Debt, in each case to the extent includible in the calculation of such ratio. (c) Mergers, Etc. Merge into or consolidate with any Person or permit ------------ any Person to merge into it, or permit any of its Subsidiaries to do so, unless (i) to the extent such merger or consolidation is with any Borrower, such Borrower shall be the surviving corporation, provided that if such -------- merger or consolidation is among one or more Borrowers, any of such Borrowers may be the surviving corporation, (ii) to the extent such merger or consolidation is with TNCL, the surviving Person shall be a corporation organized under the laws of Australia or any political subdivision thereof, or under the laws of any State of the United States or under the laws of the United Kingdom, and (iii) to the extent such merger or consolidation is with a Guarantor other than TNCL, the surviving Person shall be a corporation organized in the same country of incorporation as such Guarantor prior to the merger or consolidation; provided, however, that, in -------- ------- each case, (A) after giving pro forma effect to such merger or consolidation, the Loan Parties could incur at least $1.00 of additional Debt pursuant to Section 5.02(b), (B) in the case of any merger or consolidation in which a Guarantor is a party, or, in the case of a merger or consolidation among one or more Borrowers, the corporation formed by such consolidation or into which such Guarantor or Borrower, as the case may be, shall be merged shall, at the effective time of such merger or consolidation, assume such Guarantor's or Borrower's Obligations under this Agreement and the performance of its covenants hereunder in writing satisfactory in form and substance to the Required Lenders and (C) there shall be no event at the time of or immediately after giving effect to such merger or consolidation that constitutes a Default. (d) Change in Nature of Business. Change, or permit any of its ---------------------------- Subsidiaries to change, the nature of the business of the Reporting Group taken as a whole as carried on at the date hereof. (e) Accounting Changes. Make or permit, or permit any of its ------------------ Subsidiaries to make or permit, any change in 92 accounting policies or reporting practices, except as required by (i) the generally accepted accounting principles applicable in the jurisdiction in which such Person is organized on the date of this Agreement or (ii) as required by law, provided that TNCL may change its accounting policies or -------- reporting practices to conform to generally accepted accounting principles as in effect in the United States but, in such event, each Compliance Certificate delivered to the Lenders pursuant to Sections 5.03(b) and (c) shall be provided together with a reconciliation to A-GAAP in respect of the information reported therein. SECTION 5.03. Reporting Requirements. So long as any Advance shall ---------------------- remain unpaid or any Lender shall have any Commitment hereunder, TNCL will furnish to the Lenders: (a) Default Notice. As soon as possible and in any event within five -------------- days after a Responsible Officer becomes aware of a Default that is continuing on the date of such statement, a statement of the Chief Financial Officer or Group General Counsel of TNCL setting forth details of such Default and the action that the Reporting Group has taken and proposes to take with respect thereto. (b) Quarterly Financials. As soon as available and in any event -------------------- within 60 days after the end of each of the first three quarters of each Fiscal Year, a Consolidated balance sheet of TNCL as of the end of such quarter and Consolidated statements of income and cash flows of TNCL for the period commencing at the end of the previous Fiscal Year and ending with the end of such quarter, setting forth in comparative form, in the case of the balance sheet, the figures for the corresponding fiscal quarter in the preceding Fiscal Year from the audited balance sheet for such Fiscal Year and, in the case of the statements of income and cash flow, the corresponding figures for the corresponding period of the preceding Fiscal Year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the chief financial officer of TNCL as having been prepared in accordance with A-GAAP, together with a Compliance Certificate with respect to the period commencing at the end of the previous Fiscal Year and ending with the end of such quarter. (c) Annual Financials. As soon as available and in any event within ----------------- 120 days after the end of each Fiscal Year (i) a copy of the annual audit report for such year for TNCL, including therein a Consolidated balance sheet of TNCL as of the end of such fiscal year and Consolidated 93 statements of income and cash flows of TNCL for such Fiscal Year, in each case accompanied by an unqualified (except to the extent any qualification stated therein relates solely to the effect of any change in generally accepted accounting principles applicable to TNCL) opinion of Arthur Andersen or other independent public accountants of recognized standing acceptable to the Required Lenders, and (ii) a Compliance Certificate with respect to the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Year. In addition, concurrent with the delivery of the reports required by this Section 5.03(c) (or promptly upon such later date as such information becomes publicly available), TNCL shall deliver to the Lenders statutory accounts for BSkyB and its Subsidiaries. (d) [Intentionally Omitted] (e) ERISA Events; Plan Terminations; Notices, Etc. (i) Promptly and --------------------------------------------- in any event within 10 days after any Loan Party or any of its ERISA Affiliates knows or has reason to know that any ERISA Event with respect to any Loan Party or any of its ERISA Affiliates has occurred, a statement of the chief financial officer of TNCL describing such ERISA Event and the action, if any, that such Loan Party or such ERISA Affiliate has taken and proposes to take with respect thereto; (ii) promptly and in any event within two Business Days after receipt thereof by any Loan Party or any of its ERISA Affiliates, copies of each notice from the PBGC stating its intention to terminate any Plan of any Loan Party or any of its ERISA Affiliates or to have a trustee appointed to administer any such Plan; (iii) promptly and in any event within five Business Days after receipt thereof by any Loan Party or any of its ERISA Affiliates from the sponsor of a Multiemployer Plan of any Loan Party or any of its ERISA Affiliates, copies of each notice concerning (A) the imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that may be incurred, by such Loan Party or any of its ERISA Affiliates in connection with any event described in clause (A) or (B) provided, however, that there shall be no obligation -------- ------- to notify the Administrative Agent and the Lenders and/or send copies of any notices referenced under this Section 5.03(e) unless in connection with any or all such events specified hereunder, the Loan Parties and their ERISA Affiliates have incurred or are reasonably likely to incur liability that in the aggregate exceeds $100,000,000. 94 (f) Litigation. Promptly and in any event within 10 days after a ---------- Responsible Officer becomes aware of the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (i) affecting any Loan Party or any of its Subsidiaries of the type described in Section 4.01(i) or (ii) that challenge the transactions contemplated by this Agreement (including, without limitation, the rights of any Borrower to borrow hereunder, the use of the proceeds of any Borrowing hereunder or the performance by any Loan Party of its Obligations hereunder) or that base any claim against any Loan Party on such transactions. (g) Securities Reports. Promptly and in any event within 15 days ------------------ after the sending or filing thereof, copies of all material regular, periodic and special reports, and all registration statements, that any member of the Reporting Group files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange. (h) Environmental Conditions. Promptly and in any event within 10 ------------------------ days after a Responsible Officer becomes aware of the occurrence thereof, notice of any condition or occurrence on any property of any member of the Reporting Group that results in noncompliance by any member of the Reporting Group with any Environmental Law or Environmental Permit to the extent such noncompliance would be reasonably likely to have a Material Adverse Effect or would be reasonably likely to (i) form the basis of an Environmental Action against any member of the Reporting Group or such property that would be reasonably likely to have a Material Adverse Effect or (ii) cause any such property to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law, which restrictions would be reasonably likely to have a Material Adverse Effect. (i) Tax Reporting. To the extent any amount or adjustment of Taxes ------------- described herein would be reasonably likely to have a Material Adverse Effect, promptly and in any event within 20 days after the receipt of notice thereof or taking of such action, as the case may be, notice of (i) the amount of, the alleged basis for, and the determination of any adjustment in Taxes, which determinaton is proposed in writing by any taxing authority; (ii) the disclosure by 95 any Loan Party of any amount of Taxes associated with any U.S. tax return, which disclosure was made for the purpose of avoiding penalties or additions to tax because of one or more aggressive tax return positions; and (iii) the determination of any request for a ruling or determination letter, which determination involves an amount of Taxes from any taxing authority, and an amount of Taxes that is the subject of a request for a ruling or a determination letter from a taxing authority. (j) Other Information. Such other information respecting the ----------------- business, condition (financial or otherwise), operations, performance, properties or prospects of each member of the Reporting Group as any Lender may, through the Administrative Agent, from time to time reasonably request. SECTION 5.04. Financial Covenants. So long as any Advance shall ------------------- remain unpaid or any Lender shall have any Commitment hereunder, the Reporting Group will: (a) Leverage Ratios. Maintain (i) at all times during each Fiscal --------------- Year a ratio (the "Balance Sheet Leverage Ratio") of Consolidated total ---------------------------- liabilities plus Excess Guaranty Debt of TNCL to Consolidated total assets ---- -- of TNCL, each determined in accordance with A-GAAP, of not more than 0.65, provided that the determination of Consolidated total assets shall reflect -------- any revaluation of intangible assets after June 30, 1992 only to the extent of 70% of the incremental increase in the valuation thereof after such date as such valuation is determined by a qualified independent appraiser, and (ii) a ratio (the Operating Income Leverage Ratio") determined -------------------------------- on the last day of each fiscal quarter of TNCL for the Rolling Period then ended of the aggregate principal amount, without duplication, of Consolidated Debt of the Reporting Group described in clauses (a), (c) and (e) of the definition of Debt, Excess Guaranty Debt, all Obligations, contingent or otherwise, of the Reporting Group under acceptance, letter of credit, note purchase or other discounting arrangement or similar facilities and any indemnity given in respect of any of such facilities or arrangements (other than any letter of credit in support of trade payables incurred in the ordinary course of business) that either do not represent solely a contingent Obligation of any member of the Reporting Group or represent a contingent Obligation of a member of the Reporting Group in respect of a letter of credit 96 issued in support of Obligations that constitute Debt of any Person described in clauses (a) or (c) of such definition of Debt, and preference shares that constitute debt under Australian or United States generally accepted accounting principles to Consolidated -- Adjusted Operating Income of TNCL for such Rolling Period of not more than 5.75. For purposes of calculating the aggregate principal amount of Consolidated Debt of TNCL on any such date, (A) there shall be excluded from such calculation any amount in respect of Investment Preferred Stock, Permitted Film Financings, Permitted AWAS Transactions and Negative Pickup Arrangements and Capitalized Lease Obligations incurred in connection with the leasing of satellite transponders and (B) the currency exchange rate used for such calculation shall be the rate used in the annual or quarterly balance sheet for such date; provided, however, that, if TNCL determines that an average exchange rate is a - -------- ------- more accurate reflection of the value of such currency over such Rolling Period, the currency exchange rate used may be, at the option of TNCL, the currency exchange rate used for the income statements of TNCL for such fiscal quarter. (b) Interest Coverage Ratio. Maintain a ratio (the "Interest Coverage ----------------------- ----------------- Ratio") of Consolidated Adjusted Operating Income of TNCL for each Rolling - ----- Period set forth below to Consolidated Interest Expense of TNCL for such Rolling -- Period of not less than 2.25. ARTICLE VI EVENTS OF DEFAULT SECTION 6.01. Events of Default. If any of the following events ----------------- ("Events of Default") shall occur and be continuing: - ------------------- (a) any Loan Party shall fail to pay (i) any principal or Face Value Amount, as the case may be, of any Advance when the same becomes due and payable or (ii) any amount of interest on any Advance or any other payment under this Agreement within five (5) days after the same becomes due and payable; or (b) any representation or warranty made by any Loan Party (or any of its officers) under or in connection with this Agreement shall prove to have been incorrect in any material respect when made; or 97 (c) any member of the Reporting Group shall fail to perform or observe any term, covenant or agreement contained in clause (k) of Section 5.01, Section 5.02, clauses (a) through (c) and (e) through (i) of Section 5.03, or Section 5.04; or (d) any member of the Reporting Group shall fail to perform any other term, covenant or agreement contained in this Agreement on its part to be performed or observed if such failure shall remain unremedied for 15 days after the date on which written notice thereof shall have been given to TNCL by the Administrative Agent or any Lender; or (e) any member or members of the Reporting Group shall fail to pay any principal of, premium or interest on or any other amount payable in respect of any Debt that is outstanding in a Dollar Equivalent principal amount equal to or greater than US$100,000,000 (but excluding Debt outstanding under this Agreement) of such member or members, when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder thereof to cause, such Debt to mature; or any such Debt shall be declared by the holders thereof to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required by the holders thereof to be made, in each case prior to the stated maturity thereof; or (f) any Loan Party shall not pay its debts generally as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Loan Party seeking (otherwise than for the purpose of a solvent amalgamation or reconstruction) to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to 98 bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, receiver and manager, trustee, administrator, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of 60 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, receiver and manager, trustee, administrator, custodian or other similar official for, it or any substantial part of its property) shall occur; or any Loan Party shall take any corporate action to authorize or any shareholder resolution shall be taken to effect any of the actions set forth above in this subsection (f); or any event analagous to or having a substantially similar effect to any of the events specified in this subsection (f), other than any solvent reorganization, shall occur under the laws of any applicable jurisdiction with respect to any Loan Party; or (g) any judgments or orders shall be rendered against any member or members of the Reporting Group for the payment of money in a Dollar Equivalent amount in excess of US$150,000,000 in the aggregate and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of any such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (h) any non-monetary judgment or order shall be rendered against any member of the Reporting Group that would be reasonably likely to have a material adverse effect on the business, condition (financial or otherwise), operations, performance or properties of the Reporting Group taken as a whole, and there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (i) this Agreement shall for any reason cease to be valid and binding on or enforceable against any Loan Party in any material respect, or any such Loan Party shall so state in writing; or 99 (j) (A) K. Rupert Murdoch, while alive and not mentally or physically incapacitated, ceases to be actively involved in the management of the Reporting Group; or (B) the Murdoch Family ceases to hold or control, in the aggregate, shares or other stock representing at least 20% of the voting rights of TNCL; or (C) any Person not controlled by the Murdoch Family shall control or be entitled to control by contract or otherwise a percentage of the equity voting capital of TNCL greater than that held by the Murdoch Family at such time. For the purposes of this clause (j): (1) a share shall be deemed held by the Murdoch Family if it is held by or on behalf of any one or more of the following: (x) K. Rupert Murdoch, his wife, parent or more remote forebear, child or more remote issue, or brother or sister or child or more remote issue of a brother or sister; or (y) any Person directly or indirectly controlled by one or more of the members of the Murdoch Family described above (a "Controlled Person"); and ----------------- (2) a trust and the trustees of such trust shall be deemed to be controlled by any one or more members of the Murdoch Family if a majority of the trustees of such trust are members of the Murdoch Family or may be removed or replaced by any one or more of the members of the Murdoch Family and/or Controlled Persons; or (k) (i) any ERISA Event shall have occurred with respect to a Plan of any Loan Party or any ERISA Affiliate of any Loan Party or (ii) any Loan Party or any ERISA Affiliate of any Loan Party shall have been notified by the sponsor of a Multiemployer Plan of any Loan Party or any ERISA Affiliate of any Loan Party (A) that it has incurred Withdrawal Liability to such Multiemployer Plan or (B) that such Multiemployer Plan is in reorganization or is being terminated within the meaning of Title IV of ERISA, and the sum of (x) the Insufficiencies of all such Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and their ERISA Affiliates related to such ERISA Event), (y) the aggregate of amounts required to be paid to Multiemployer Plans by the Loan Parties and their ERISA Affiliates as Withdrawal Liability (determined as of the date of notification by the sponsor) and (z) the present value of any increases in the aggregate annual contributions of the Loan Parties and their ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated over the amounts contributed to such Multiemployer Plans for the plan year immediately preceding the plan year in which reorganization or termination occurs, exceeds $150,000,000; or 100 then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to TNCL, declare the obligation of each Appropriate Lender to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to TNCL, declare the principal amount or Face Value Amount, as the case may be, of the Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party; provided, however, that in the event of an actual or -------- ------- deemed entry of an order for relief with respect to any Loan Party under the U.S. Federal Bankruptcy Code, (x) the obligation of each Lender to make Advances shall automatically be terminated and (y) the principal amount or the Face Value Amount, as the case may be, of the Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by each Loan Party. SECTION 6.02. Cash Cover in Event of Default. (a) Where the ------------------------------ principal amount or the Face Value Amount, as the case may be, of the Advances is declared to be, or becomes payable, pursuant to Section 6.01, the obligation to pay Facility B Advances and Facility C Advances in Australian Dollars shall be satisfied by the Australian Dollar Borrower paying to the Australian Agent cash cover in an amount equal to the Face Value Amount of all Bill Advances and Cash Advances in Australian Dollars then outstanding to such Borrower under Facility B and Facility C, and the Australian Dollar Borrower shall immediately pay the cash cover specified in such notice to the Australian Agent in same day funds in Australian Dollars. (b) All amounts paid by the Australian Dollar Borrower to the Australian Agent pursuant to this Section 6.02 shall be deposited in an account of the Australian Agent and shall be paid by the Australian Agent to each Facility B Lender and Facility C Lender ratably (based on the proportion of (A) the Original Dollar Equivalent amount of such Facility B Advances and Facility C Advances in Australian Dollars owed to such Facility B Lender or Facility C Lender, as the case may be, under this Agreement at such time to (B) the Original Dollar Equivalent amount of the Advances in Australian Dollars owed to all Facility B Lenders and Facility C Lenders at such time) to pay the aggregate Face Value Amount of their Bill Advances and Cash Advances in Australian Dollars then outstanding on the last day of each successive 101 Interest Period in respect thereof until all such amounts held therefor have been repaid. Any interest actually earned on such deposits shall be held by the Australian Agent and may be applied by the Australian Agent to discharge amounts due to any Lenders under this Agreement until the Australian Agent is satisfied that every Advance under this Agreement has been paid in full and no other amounts are due and payable or are to, or may, become due and payable, and upon such time the Australian Agent shall pay such amount to the Australian Dollar Borrower. (c) All amounts paid by the Australian Dollar Borrower and otherwise held for the Facility B Lenders and Facility C Lenders pursuant to this Section 6.02 shall be subject to the provisions of Section 2.11. ARTICLE VII THE ADMINISTRATIVE AGENT THE AUSTRALIAN AGENT SECTION 7.01. Authorization and Action. Each Lender hereby appoints ------------------------ and authorizes each Appropriate Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to such Appropriate Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Debt resulting from the Advances), the Appropriate Agents shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lenders; provided, however, that the Appropriate Agents shall not be required to take any - -------- ------- action that exposes the Appropriate Agents to personal liability or that is contrary to this Agreement or applicable law. Each Appropriate Agent agrees to give to each Lender prompt notice of each notice given to it by the Loan Parties pursuant to the terms of this Agreement. SECTION 7.02. Appropriate Agent's Reliance, Etc. Neither Appropriate --------------------------------- Agent nor any of their directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, each Appropriate Agent: (i) may treat the Lender that 102 made any Advance as the holder of the Debt resulting therefrom until the Appropriate Agent receives and accepts an Assignment and Acceptance entered into by such Lender, as assignor or novator, and an Eligible Assignee, as assignee or novatee, as provided in Section 9.07; (ii) may consult with legal counsel (including counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations made in or in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of any Loan Party or to inspect the property (including the books and records) of any Loan Party; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, telecopy or telex) believed by it to be genuine and signed or sent by the proper party or parties. SECTION 7.03. Citibank, Citisecurities and Affiliates. With respect --------------------------------------- to its Commitments and the Advances made by it, Citibank and Citisecurities shall each have the same rights and powers under this Agreement as any other Lender and may exercise the same as though they were not the Appropriate Agents; and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include Citibank in its individual capacity. Citibank, Citisecurities and their affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, any Loan Party, any of its Subsidiaries and any Person who may do business with or own securities of any Loan Party or any such Subsidiary, all as if Citibank and Citisecurities were not the Appropriate Agents and without any duty to account therefor to the Lenders. SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that ---------------------- it has, independently and without reliance upon the Appropriate Agents or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and 103 without reliance upon the Appropriate Agents, any Arranger, Agent, Co-Agent, Lead Manager or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. SECTION 7.05. Indemnification. (a) Each Lender severally agrees to --------------- indemnify the Appropriate Agents (to the extent not promptly reimbursed by the Loan Parties) from and against such Lender's ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Appropriate Agents in any way relating to or arising out of this Agreement or any action taken or omitted by the Appropriate Agents under this Agreement; provided, however, that no Lender shall be liable for any portion of -------- ------- such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from an Appropriate Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Appropriate Agents promptly upon demand for its ratable share (which share shall be equal to the ratio of (x) the Dollar Equivalent of the sum of (A) such Lender's aggregate unused Commitments under Facility A, Facility B and Facility C and (B) the aggregate principal amount or Adjusted Face Value Amount, as the case may be, outstanding of the Advances made by such Lender under Facility A, Facility B and Facility C to (y) the Dollar Equivalent of the sum of (A) the aggregate unused Commitments of the Lenders under Facility A, Facility B and Facility C and (B) the aggregate principal amount or Adjusted Face Value Amount, as the case may be, outstanding of the Advances made by the Lenders under Facility A, Facility B and Facility C; provided that, in the event that any Defaulted Advance shall be owing by any - -------- Defaulting Lender at any time, such Lender's Commitment with respect to the Facility under which such Defaulted Advance was required to have been made shall be considered to be unused for purposes of the determination of such Lender's ratable share (determined as provided above to the extent of such Defaulted Advance) of any costs and expenses payable by the Borrowers under Section 9.04, to the extent that the Appropriate Agents are not promptly reimbursed for such costs and expenses by the Loan Parties. The failure of any Lender to reimburse an Appropriate Agent promptly upon demand for its ratable share of any amount required to be paid by the Lenders to such Appropriate Agent as provided herein shall not relieve any other Lender of its obligation hereunder to reimburse such Appropriate Agent for its ratable share of such amount, but no Lender shall be responsible for the failure of any other Lender 104 to reimburse such Appropriate Agent for such other Lender's ratable share of such amount. (b) Notwithstanding anything to the contrary in Section 7.05(a), in the event an Appropriate Agent submits to a Loan Party a request for an indemnity for Other Taxes pursuant to Section 2.10(c) and such Loan Party notifies such Appropriate Agent that no payment is due pursuant to Section 2.10(h)(ii) of this Agreement, the applicable Lender shall indemnify such Appropriate Agent for any payment of such Other Taxes which resulted directly from such Lender's change in account, permanent establishment or other branch through which such Lender receives any payment pursuant to this Agreement and which Other Taxes were paid by such Appropriate Agent to the relevant taxation authority. SECTION 7.06. Successor Agents. An Appropriate Agent may resign as ---------------- to one or more of the Facilities at any time by giving written notice thereof to the Lenders and the Borrowers and may be removed as to any of the Facilities at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Appropriate Agent as to such of the Facilities as to which such Appropriate Agent has resigned or been removed. If no successor Appropriate Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Appropriate Agent's giving of notice of resignation or the Required Lenders' removal of the retiring Appropriate Agent, then the retiring Appropriate Agent may, on behalf of the Lenders, appoint a successor Appropriate Agent, which shall be a commercial bank having a combined capital and surplus of at least $5,000,000,000. Upon the acceptance of any appointment as Appropriate Agent hereunder by a successor Appropriate Agent as to any of the Facilities, such successor Appropriate Agent shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Appropriate Agent, and the retiring Appropriate Agent shall be discharged from its duties and obligations under this Agreement. Upon the acceptance of any appointment as Appropriate Agent hereunder by a successor Appropriate Agent as to only one of the Facilities, such successor Appropriate Agent shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Appropriate Agent as to such Facility, other than with respect to funds transfers and other similar aspects of the administration of Borrowings under such Facility and payments by the Borrowers in respect of such Facility, and the retiring Appropriate Agent shall be discharged from its duties and obligations under this Agreement as to such Facility, other than 105 as aforesaid. After any retiring Appropriate Agent's resignation or removal hereunder as Appropriate Agent as to any of the Facilities, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Appropriate Agent as to any Facility under this Agreement. SECTION 7.07. The Australian Agent. Each of the Loan Parties and the -------------------- Lenders agree that the Australian Agent shall be entitled to the same rights and benefits under this Agreement as are afforded to the Administrative Agent. ARTICLE VIII GUARANTY SECTION 8.01. Guaranty; Limitation of Liability; Taxes. (a) Each ---------------------------------------- Guarantor hereby jointly and severally unconditionally guarantees (the undertaking by each Guarantor contained in this Article VIII being the "Guaranty") the punctual payment when due, whether at stated maturity, by -------- acceleration or otherwise, of all Obligations of all other Loan Parties now or hereafter existing under this Agreement, whether for principal, interest, fees, expenses or otherwise (such Obligations being the "Guaranteed Obligations"), and ---------------------- agrees to pay any and all expenses (including counsel fees and expenses) incurred by the Administrative Agent or the Lenders in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, each Guarantor's liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any Borrower to the Administrative Agent or the Lenders under this Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such Borrower. (b) The liability of each Guarantor that is organized under the laws of any State of the United States (each such Guarantor, a "U.S. Guarantor") -------------- under this Guaranty, other than in respect of the Guaranteed Obligations of any Borrower that is a Subsidiary of such U.S. Guarantor, shall not exceed the greater of (i) 95% of the Adjusted Net Assets of such U.S. Guarantor on the date of delivery hereof and (ii) 95% of the Adjusted Net Assets of such U.S. Guarantor on the date of any payment hereunder. "Adjusted Net Assets" of any ------------------- U.S. Guarantor at any date means the lesser of (x) the amount by which the fair value of the property of such U.S. Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities, but excluding liabilities under this Agreement, of 106 such U.S. Guarantor at such date and (y) the amount by which the present fair salable value of the assets of such U.S. Guarantor at such date exceeds the amount that will be required to pay the probable liability of such U.S. Guarantor on its debts, excluding debt in respect of this Agreement, as they become absolute and matured. SECTION 8.02. Guaranty Absolute. Each Guarantor guarantees that the ----------------- Guaranteed Obligations will be paid strictly in accordance with the terms of this Agreement, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or the Lenders with respect thereto. The Obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Borrowers or whether the Borrowers are joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of this Agreement or any other agreement or instrument relating to this Agreement; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from this Agreement, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to the Borrowers or any of their Subsidiaries or otherwise; (c) any taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of or consent to departure from this Agreement for all or any of the Guaranteed Obligations; (d) any change, restructuring or termination of the corporate structure or existence of the Borrowers or any of their Subsidiaries; (e) any other circumstance (including, without limitation, any statute of limitations) that might otherwise constitute a defense available to, or a discharge of, the Borrowers or any Guarantor; or 107 (f) any manner of application of collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any of the Guaranteed Obligations or any other assets of any Borrower. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all as though such payment had not been made. SECTION 8.03. Waivers. (a) Each Guarantor hereby waives promptness, ------- diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Agreement. (b) Each Guarantor hereby irrevocably waives any claim or other rights that it may now or hereafter acquire against any Borrower that is organized under the laws of any State of the United States (a "U.S. Borrower") or U.S. ------------- Guarantor that arise from the existence, payment, performance or enforcement of each Guarantor's Obligations under this Agreement or any other related agreement, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Administrative Agent or any Lender against any U.S. Borrower or U.S. Guarantor, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any U.S. Borrower or any U.S. Guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right. If any amount shall be paid to the Guarantors in violation of the preceding sentence at any time prior to the later of the indefeasible cash payment in full of the Guaranteed Obligations and all other amounts payable under this Agreement and the Termination Date, such amount shall be held in trust for the benefit of the Administrative Agent and the Lenders and shall forthwith be paid to the Administrative Agent to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Agreement, whether matured or unmatured, in accordance with the terms of this Agreement. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Agreement and that the waiver set forth in this subsection is knowingly made in contemplation of such benefits. Notwithstanding the foregoing, the obligation to hold amounts in trust shall not have 108 effect to the extent that it would otherwise create or take effect as a charge or security interest over such amounts. SECTION 8.04. Continuing Guaranty; Assignments Under this Agreement. ----------------------------------------------------- This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the later of the indefeasible cash payment in full of the Guaranteed Obligations and all other amounts payable under this Agreement and the Termination Date, (b) be binding upon each Guarantor, its successors and assigns permitted hereunder and (c) inure to the benefit of and be enforceable by the Lenders, each Appropriate Agent and their successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may assign or otherwise transfer all or any portion of its rights and obligations under this Agreement to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise, as more fully set forth in Section 9.07. SECTION 8.05. Release of Guarantors. A Guarantor shall be released --------------------- from its Obligations under this Guaranty (i) upon the unconditional and full release of such Guarantor by the Required Lenders in a writing in form and substance satisfactory to the Required Lenders, provided that TNCL shall not be -------- released as a Guarantor without the consent of all of the Lenders or (ii) so long as no Event of Default has occurred and is continuing, automatically, without any further action on the part of the Lenders, upon the request of TNCL and immediately prior to the release of such Guarantor as a guarantor of all Public Senior Debt of which such Guarantor is a guarantor, if the Consolidated operating income of such Guarantor is less than 5% of the Consolidated operating income of TNCL as determined by reference to (A) the audited statements of income and cash flow of TNCL for the Fiscal Year ended immediately prior to such date of determination, and (B) the unaudited statements of income and cash flow of such Guarantor for the Rolling Period ended on the last day of the fiscal quarter ended immediately prior to the date of determination, duly certified by the Chief Financial Officer of TNCL as having been prepared in accordance with generally accepted accounting principles applicable to TNCL, which certificate shall also certify (x) the percentage of TNCL's Consolidated operating income represented by such Guarantor and (y) that there are no other Subsidiaries of TNCL that as of such date have Consolidated operating income of 5% or greater of the Consolidated operating income of TNCL or, to the extent that there are such Subsidiaries, such Subsidiaries shall be added as Guarantors pursuant to Section 5.01(k), provided that, if at any time and for any reason such Subsidiary is -------- deemed to be or otherwise becomes reinstated as a guarantor under any such Public 109 Senior Debt, such Subsidiary shall automatically be reinstated as a Guarantor under this Guaranty without any further action on the part of such Guarantor or the Lenders; and provided further that no Guarantor that is also a Borrower -------- ------- shall be released unless it is simultaneously removed as a Borrower in accordance with Section 9.11. ARTICLE IX MISCELLANEOUS SECTION 9.01. Amendments, Etc. No amendment or waiver of any --------------- provision of this Agreement, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that (a) no amendment, waiver or consent shall, unless -------- ------- in writing and signed by all the Lenders (other than any Lender that is, at such time, a Defaulting Lender), do any of the following at any time: (i) waive any of the conditions specified in Section 3.01 or, in the case of the initial Borrowing, 3.02, (ii) change the percentage of the Commitments or of the aggregate unpaid principal amount or Face Value Amount of the Advances, or the number of Lenders, that shall be required for the Lenders or any of them to take any action hereunder, (iii) amend this Section 9.01, (iv) increase the Commitments of any Lender or subject any Lender to any additional obligations, (v) reduce the interest payable on the Advances or any fees or other amounts (other than the principal or Face Value Amount of the Advances) or (vi) postpone any date fixed for any payment of principal or Face Value Amount of the Advances or any fees or other amounts payable hereunder and (b) no amendment, waiver or consent shall, unless in writing and signed by the Required Lenders and each Lender that holds or is owed Obligations that are modified by such amendment, waiver or consent, (i) reduce the principal or Face Value Amount of the Advances payable to such Lender or (ii) change the order of application of any prepayment set forth in Section 2.05 in any manner that materially affects such Lender; provided further that no amendment, waiver or consent shall, unless in writing - -------- ------- and signed by the Appropriate Agents in addition to the Lenders required above to take such action, affect the rights or duties of the Appropriate Agents under this Agreement. SECTION 9.02. Notices, Etc. All notices and other communications ------------ provided for hereunder shall be in writing (including telegraphic, telecopy or telex communication) and 110 mailed by certified mail return receipt requested, telegraphed, telecopied or telexed or delivered, if to any Loan Party, to the telecopy or telex number or at its address specified opposite its name on Part III of Schedule 1 hereto, with a copy to the Group General Counsel of TNCL at 1211 Avenue of the Americas, New York, NY 10036; if to any Facility A Lender or Facility C Lender, at its LIBOR Lending Offices, or if to any Facility B Lender or Facility C Lender, at its Australian Dollar Lending Office; if to any Guarantor, to the telecopy or telex number or at its address specified opposite its name on Part III of Schedule 1 hereto, with a copy to the Group General Counsel of TNCL at 1211 Avenue of the Americas, New York, NY 10036; and if to the Administrative Agent, at its address at 399 Park Avenue, New York, New York 10043, Attention: Judith Fishlow, or to the Australian Agent, at its address at 10th Level, Citibank Centre, 1 Margaret Street, Sydney, NSW 2000, Australia, Attention: Celle Raguine; or, as to each party, at such other address or, in the case of any Loan Party, at such telecopy or telex number, as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or confirmed by telex answerback, respectively, except that notices and communications to either Appropriate Agent pursuant to Article II, III or VII shall not be effective until received by the Administrative Agent. SECTION 9.03. No Waiver; Remedies. No failure on the part of any ------------------- Lender or the Administrative Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION 9.04. Costs and Expenses. (a) TNCL agrees to pay on demand ------------------ (i) all reasonable costs and expenses, together with, in each case, value added tax or similar tax thereon, of each Appropriate Agent and the Arrangers in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement (including, without limitation, (A) all reasonable due diligence, syndication, meals, lodging, transportation and all other reasonable out-of-pocket expenses and (B) the reasonable fees and expenses of counsel (which shall include only one counsel in each jurisdiction together with one additional intellectual property counsel and one additional communications counsel in such jurisdiction) for the Appropriate Agents and the Arrangers, collectively, with respect thereto, with respect to advising each Appropriate Agent and Arranger as 111 to its rights and responsibilities, or the perfection, protection or preservation of rights or interests, under this Agreement, with respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors' rights generally and any proceeding ancillary thereto) and (ii) all costs and expenses of each Appropriate Agent and the Lenders in connection with the enforcement of this Agreement, whether in any action, suit or litigation, any bankruptcy, insolvency or other similar proceeding affecting creditors' rights generally or otherwise (including, without limitation, the reasonable fees and expenses of counsel (which shall include only one counsel in each jurisdiction together with one additional intellectual property counsel and one additional communications counsel) for the Appropriate Agents and the Lenders, collectively, with respect thereto and, in the event any Lender elects to pursue its remedies under this Agreement for nonpayment of any amounts due and payable hereunder in a proceeding separate from that of the other Lenders, shall include one additional counsel in each jurisdiction for each such Lender). (b) Each Loan Party agrees to indemnify and hold harmless each Appropriate Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an "Indemnified ----------- Party") from and against any and all claims, damages, losses, liabilities and reasonable expenses (including, without limitation, reasonable fees and expenses of counsel, which shall include only one counsel in each jurisdiction together with one additional intellectual property counsel and one additional communications counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of, or in connection with the preparation for a defense of, any investigation, litigation or proceeding arising out of, related to or in connection with the Facilities, including, but not limited to, (i) the actual or proposed use of the proceeds of the Advances and (ii) the actual or alleged presence of Hazardous Materials on any property of any member of the Reporting Group or any Environmental Action relating in any way to any member of the Reporting Group, in each case whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnified Party or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent 112 jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. Upon any payment hereunder to any Indemnified Party, the Loan Parties shall be subrogated to all rights of such Indemnified Party to seek reimbursement from any other Person. Each Loan Party also agrees that no Indemnified Party shall have any liability (in contract or tort or otherwise) to any of the Loan Parties or to their respective security holders or creditors arising out of, related to or in connection with this Agreement, except to the extent that such liability is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. Notwithstanding the foregoing, in the event of any litigation or proceeding between or among the Indemnified Parties, no Loan Party shall be obligated to indemnify and hold harmless an Indemnified Party for any such claims, damages, losses, liabilities and expenses except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from the participation or contribution of any Loan Party, their affiliates, officers, directors, employees, agents or advisors, and then only to the extent of their participation or contribution. (c) If any payment of principal of any Facility A Advance or Facility C Advance in US Dollars is made by any Borrower to or for the account of a Lender other than on the last day of the Interest Period for such Advance, as a result of acceleration of the maturity of the Advances pursuant to Section 6.01 or for any other reason, such Borrower shall, upon demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that it may reasonably incur as a result of such payment, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Advance. (d) If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Loan Party by either Appropriate Agent or any Lender, in its sole discretion. (e) The Australian Dollar Borrower agrees to indemnify and hold harmless each of the Administrative Agent and the Australian Agent and each Facility B Lender and each Facility C 113 Lender against any claim, action, damage, loss, liability, cost, expense or payment (including, but not limited to, any Tax (other than Tax on its overall net income) that it suffers, incurs or is liable for by reason of or arising out of or in consequence of it signing, drawing, accepting or endorsing any Bill or otherwise dealing with any Bill in the manner contemplated by this Agreement (but not including dishonor of any Bill by any such Lender), except in each case to the extent any such claim, action, damage, loss, liability, cost, expense or payment is found in a final non-appealable judgment by a court of competent juristiction to have resulted from such Person's gross negligence or willful misconduct. SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during ---------------- the continuance of any Event of Default and (b) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the principal amount or Face Value Amount, as the case may be, of the Advances due and payable pursuant to the provisions of Section 6.01, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of any Loan Party against any and all of the Obligations of any Loan Party now or hereafter existing under this Agreement, and to make any such currency exchange as may be necessary to effect such application, irrespective of whether such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. Each Lender agrees promptly to notify the Appropriate Agents and TNCL after any such set-off and application; provided, however, that the failure to give such notice -------- ------- shall not affect the validity of such set-off and application. The rights of each Lender under this Section are in addition and without prejudice to other rights and remedies (including, without limitation, other rights of set-off) that such Lender may have. Notwithstanding the foregoing, this Section 9.05 shall not have effect to the extent that it would otherwise create or take effect as a charge or security interest over any such deposits or indebtedness. SECTION 9.06. Binding Effect. This Agreement shall become effective -------------- when it shall have been executed by the Loan Parties and each Appropriate Agent and when the Administrative Agent shall have been notified by each Bank that such Bank has executed it and thereafter shall be binding upon and inure to the benefit of the Loan Parties, the Administrative Agent and each Lender and their respective successors and assigns, except that 114 the Loan Parties shall not have the right to assign their rights hereunder or any interest herein without the prior written consent of the Lenders. SECTION 9.07. Assignments, Novations and Participations. (a) Each ----------------------------------------- Lender may and, if demanded by TNCL (following a demand by such Lender or other entitlement to payment arising pursuant to Section 2.08 or 2.10, which demand or entitlement is not waived by such Lender) upon at least 30 days' notice to such Lender and the Administrative Agent, will assign and transfer or novate to one or more banks or other entities all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment or Commitments and the Advances owing to it). Each assignment and transfer shall be effected by executing and delivering an Assignment and Acceptance substantially in the form of Exhibit B-1; provided that, in the case -------- of a novation of Commitments under Facility B or Facility C in respect of Advances of Australian Dollars then outstanding, such novation shall be effected by the execution and delivery of a novation substantially in the form of Exhibit B-2. Notwithstanding anything to the contrary set forth above in this Section 9.07(a), (i) each such assignment and transfer or novation shall be of a uniform, and not a varying, percentage of all rights and obligations under and in respect of one or more Facilities, (ii) except in the case of an assignment and transfer or novation to a Person that, immediately prior to such assignment and transfer or novation, was a Lender or an assignment and transfer or novation of all of a Lender's rights and obligations under this Agreement, the amount of the Commitment of the assigning and transferring or novating Lender being assigned and transferred or novated pursuant to each such assignment and transfer or novation (determined as of the date of the Assignment and Acceptance with respect to such assignment or novation) shall in no event be less than US$15,000,000 in the case of each of Facility A and Facility C and A$20,000,000 in the case of Facility B, (iii) each such assignment and transfer or novation shall be to an Eligible Assignee or an Affiliate of the Lender assignor or novator, (iv) each such assignment and transfer or novation made as a result of a demand by TNCL pursuant to this Section 9.07(a) shall be arranged by TNCL after consultation with the Administrative Agent and shall be either an assignment and transfer or novation of all of the rights and obligations of the assigning or novating Lender under the Facility or Facilities giving rise to a demand or entitlement to payment arising pursuant to Section 2.08 or 2.10 or an assignment and transfer or novation of a portion of such rights and obligations made concurrently with another such assignment and transfer or novation or other such assignments and transfers or novations that together cover all of the rights and 115 obligations of the assigning or novating Lender thereunder, (v) (A) in the case of an assignment and transfer, no Lender shall be obligated to make any such assignment and transfer as a result of a demand by TNCL pursuant to this Section 9.07(a) unless and until such Lender shall have received one or more payments from one or more Eligible Assignees or, in the case of a novation, the relevant Borrower in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender that are being assigned and transferred, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under the Commitments and Advances of such Lender that are being assigned and transferred, and (B) in the case of a novation, the Lender shall not be obligated to make any such novation unless an Assignment and Acceptance is entered into by all the parties thereto providing in accordance with its terms for such Lender to be repaid by or at the direction of the Australian Dollar Borrower the outstanding Face Value Amount of the Facility B Advances and Facility C Advances in Australian Dollars made by such Lender together with all fees and other amounts payable to such Lender under the Commitments and Advances in relation to such Lender that are being novated; and (vi) the parties to each such assignment and transfer or novation shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, the appropriate Assignment and Acceptance together with a processing and recordation fee of US$3,000, provided -------- that, in the case of an assignment and transfer or novation demanded by TNCL, TNCL shall pay such processing and recordation fee. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance, (x) the assignee or novatee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned and transferred or novated to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender assignor or novator thereunder shall, to the extent that rights and obligations hereunder have been assigned and transferred or novated by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning or novating Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto). (b) By executing and delivering an Assignment and Acceptance, the Lender assignor or novator thereunder and the assignee or novatee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as 116 provided in such Assignment and Acceptance, such assigning and transferring or novating Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning and transferring or novating Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee or novatee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee or novatee will, independently and without reliance upon either Appropriate Agent, such assigning and transferring or novating Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee or novatee confirms that it is an Eligible Assignee or an Affiliate of the assignor; (vi) such assignee or novatee appoints and authorizes the Appropriate Agents to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Appropriate Agents by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; (vii) such assignee or novatee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender; (viii) such assignee or novatee agrees and acknowledges that such assignor or novator shall not be under any obligation to accept a re- transfer from such assignee or novatee of the whole or any part of the rights and obligations transferred or novated to such assignee or novatee pursuant to such assignment or novation or to indemnify such assignee or novatee for any losses directly or indirectly sustained or incurred by such assignee or novatee for any reason whatsoever, including, without limitation, the non-performance by any Loan Party of its Obligations under this Agreement and (ix) such assignee or novatee agrees and acknowledges that, as of the date of such assignment and transfer or novation, it is not entitled to receive or demand any amounts payable pursuant to Section 2.08 or 2.10, except to the extent such assignor or novator was entitled to receive or demand any such amounts and 117 then only to the extent the relevant amounts are incurred by such assignee or novatee. (c) The Administrative Agent shall maintain at its address referred to in Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment under each Facility of, and principal amount or Face Value Amount, as the case may be, of the Advances owing under each Facility to, each Lender from time to time (the "Register"). The entries in the -------- Register shall be conclusive and binding for all purposes, absent manifest error, and the Loan Parties, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Loan Parties or any Lender at any reasonable time and from time to time upon reasonable prior notice. (d) Each Lender assignor or novator shall use its reasonable efforts to give notice to TNCL of its intention to effect an assignment and transfer or novation pursuant to this Section 9.07 as soon as practicable, provided that -------- such assignor's or novator's failure to give such notice shall not restrict such assignor's or novator's ability to make such assignment and transfer or novation. Upon its receipt of an Assignment and Acceptance executed by an assigning and transferring or novating Lender and an assignee or novatee, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit B-1 (in the case of an assignment and transfer) or Exhibit B-2 (in the case of a novation) hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to TNCL and each of the other Loan Parties. (e) In the case of a novation (i) the Australian Agent is irrevocably authorized by all parties to this agreement other than the Lender novator, to execute on their behalf an Assignment and Acceptance delivered to the Australian Agent under Section 9.07(a); (ii) subject to the terms of the Assignment and Acceptance, when the Australian Agent executes an Assignment and Acceptance, the substituted rights and obligations set out therein no longer apply to the Lender novator and the Lender novatee is bound by this agreement as detailed in the Assignment and Acceptance; (iii) while a Notice of Borrowing is current, a novation may not be made without the prior written consent of the Australian Agent; and (iv) for the purposes of each Assignment and Acceptance, the Australian Dollar Borrower irrevocably directs the Australian Agent and the Lender novatee, in relation 118 to each date of Borrowing in relation to Facility B Advances and Facility C Advances in Australian Dollars that coincides with the last day of an Interest Period or other date on which Face Value Amounts or other amounts are or become due and payable to the Lender novator in relation to Facility B Advances or Facility C Advances in Australian Dollars respectively, to pay the Net Pro Rata Share in relation to such Lender novatee for Facility B Advances or Facility C Advances in Australian Dollars respectively made by such Lender novatee on that date to the Lender novator to the extent necessary to discharge, and in discharge of, the Australian Borrower's liability to the Lender novator in respect of the Face Value Amounts and all other amounts due to the Lender novator on that date with respect to Facility B Advances and Facility C Advances in Australian Dollars respectively. (f) Each Lender may grant participations in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments and the Advances owing to it); provided, -------- however, that (i) such Lender's obligations under this Agreement (including, - ------- without limitation, its Commitments) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Loan Parties, the Appropriate Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, (iv) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of this Agreement, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, Face Value Amount of or interest on the Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, postpone any date fixed for any payment of principal of, Face Value Amount of or interest on the Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation and (v) except in the case of a participation to an Affiliate of such Lender, such participation shall in no event be less than US$50,000,000 in the case of each of Facility A and Facility C and A$65,000,000 in the case of Facility B. (g) Any Lender may, in connection with any assignment and transfer, novation or participation or proposed assignment, novation or participation pursuant to this Section 9.07, disclose to the assignee, novatee or participant or proposed assignee, novatee or participant, any information relating to the Loan Parties furnished to such Lender by or on behalf of the Loan 119 Parties; provided, however, that, prior to any such disclosure, the assignee, -------- ------- novatee or participant or proposed assignee, novatee or participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender in accordance with Section 9.10. (h) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the principal or Face Value Amount Advances owing to it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System. (i) Notwithstanding anything contained in Section 2.10 to the contrary, the Loan Parties and the Lenders hereby agree that the Loan Parties shall not indemnify any Lender for or make any payment in respect of Other Taxes on assignments and transfers or novations or participations except to the extent any such assignment and transfer or novation is demanded by TNCL or such participation is effected pursuant to Section 2.11. SECTION 9.08. Governing Law; Submission to Jurisdiction; Service of ----------------------------------------------------- Process; Judgment. (a) This Agreement shall be governed by, and construed in - ----------------- accordance with, the laws of the State of New York, U.S. (b) Each Loan Party hereby irrevocably submits to the non-exclusive jurisdiction of any New York State, U.S. or U.S. Federal Court sitting in New York County, State of New York, U.S., for any action or proceeding arising out of or relating to this Agreement, and each Loan Party hereby irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State Court or, to the extent permitted by law, in such U.S. Federal Court. Each Loan Party hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of any such action or proceeding. For the benefit of the Appropriate Agents and the Lenders, in addition to the foregoing, each of the Loan Parties hereby irrevocably submits to the jurisdiction of the courts of England and to the non-exclusive jurisdiction of the states and territories of Australia for any action or proceeding arising out of or relating to this Agreement, and each Loan Party hereby irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in any such court to the extent permitted by the law of the respective jurisdiction. Nothing herein shall affect the right of the Appropriate Agents 120 or the Lenders to commence legal proceedings or otherwise proceed against any Loan Party in any other jurisdiction. (c) Each Loan Party hereby irrevocably designates, appoints and empowers NAHI, in the case of any suit, action or proceeding brought in the United States, News International plc, in the case of any suit, action or proceeding brought in the United Kingdom, News Limited in the case of any suit, action or proceeding brought in Australia (each such Person designated, appointed and empowered, and any successor thereto, being a "Process Agent"), as ------------- its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and in respect of its property, service of any and all legal process, summons, notices and documents that may be served in any action or proceeding arising out of or in connection with this Agreement. Such service may be made by mailing or delivering a copy of such process to the relevant Loan Party in care of the appropriate Process Agent at the Process Agent's above address, and the each Loan Party hereby irrevocably authorizes and directs the appropriate Process Agent to accept such service on its behalf. As an alternative method of service, each Loan Party also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to such Loan Party at its address specified in Section 9.02. Each Loan Party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. (d) (i) If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in US Dollars, Sterling or Australian Dollars, as the case may be, into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase US Dollars, Sterling or Australian Dollars, as the case may be, with such other currency at the spot rate of exchange quoted by the Administrative Agent at 11:00 A.M. (New York time) on the Business Day preceding that on which final judgment is given, for the purchase of US Dollars, Sterling or Australian Dollars, as the case may be, for delivery two Business Days thereafter. (ii) The obligation of each Loan Party in respect of any sum due from it to any Lender or either Appropriate Agent hereunder shall, notwithstanding any judgment in a currency other than US Dollars, Sterling or Australian Dollars, as the case may be, be discharged only to the extent that on the Business Day following receipt by such Lender or such Appropriate Agent, as 121 the case may be, of any sum adjudged to be so due in such other currency such Lender or such Appropriate Agent, as the case may be, may in accordance with normal banking procedures purchase US Dollars, Sterling or Australian Dollars, as the case may be, with such other currency. If the US Dollars, Sterling or Australian Dollars, as the case may be, so purchased are less than the sum originally due to such Lender or such Appropriate Agent, as the case may be, in US Dollars, Sterling or Australian Dollars, as the case may be, the relevant Loan Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or such Appropriate Agent, as the case may be, against such loss, and if the US Dollars, Sterling or Australian Dollars, as the case may be, so purchased exceed the sum originally due to the Lenders and the Appropriate Agents in US Dollars, Sterling or Australian Dollars, as the case may be, such Lender or such Appropriate Agent, as the case may be, agrees to remit to such Loan Party such excess. SECTION 9.09. Execution in Counterparts. This Agreement may be ------------------------- executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement. SECTION 9.10. Confidentiality. Neither the Appropriate Agents nor --------------- any Lender shall disclose any Confidential Information to any Person without the consent of the Borrowers, other than (a) to such Appropriate Agent's or such Lender's Affiliates and their officers, directors, employees, agents and advisors and to actual or prospective Eligible Assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, with notice thereof to TNCL as promptly as practicable to the extent permissable in accordance therewith and (c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking. SECTION 9.11. Removal of Borrowers. So long as no Default shall have -------------------- occurred and be continuing, TNCL may, upon 30 days' prior written notice to the Administrative Agent, elect to terminate the entitlement of any Borrower to borrow under this Agreement and, if, upon the effective date specified in such notice, such Borrower shall have repaid in full the principal amount or Face Value Amount, as the case may be, of all Advances made to such Borrower, together with all interest and other Obligations then owing by such Borrower to each Lender and the 122 Appropriate Agents hereunder, such Borrower shall no longer be entitled to borrow under this Agreement, shall automatically be released from its Obligations as a Borrower under this Agreement and shall no longer constitute a "Borrower" hereunder. For the purpose of this Section 9.11, Advances will not be regarded as having been paid in full if such payment is only to the Appropriate Agent pursuant to Section 2.05(d) or Section 6.02. SECTION 9.12. WAIVER OF JURY TRIAL; IMMUNITIES. (a) EACH OF THE LOAN -------------------------------- PARTIES, EACH APPROPRIATE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ADVANCES OR THE ACTIONS OF SUCH APPROPRIATE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF. (b) To the extent that any Loan Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such Loan Party hereby irrevocably waives such immunity in respect of its obligations under this Agreement and, without limiting the generality of the foregoing, agrees that the waivers set forth in this subsection (b) shall have the fullest scope permitted under the U.S. Foreign Sovereign Immunities Act of 1976 and are intended to be irrevocable for purposes of such Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. BORROWERS: --------- HARPERCOLLINS PUBLISHERS INC. By /s/ Neil Topham ------------------------------------- CFO HARPERCOLLINS (UK) By /s/ D. DeVoe ------------------------------------- Authorised Officer 123 NEWS AMERICA HOLDINGS INCORPORATED By /s/ Arthur M. Siskind -------------------------------------- Executive Vice President NEWS AMERICA FSI, INC. By /s/ Arthur M. Siskind -------------------------------------- Executive Vice President NEWS AMERICA PUBLICATIONS, INC. By /s/ Arthur M. Siskind -------------------------------------- Executive Vice President NEWSCORP INVESTMENTS LIMITED By /s/ Arthur M. Siskind -------------------------------------- Attorney NEWS INTERNATIONAL plc By /s/ Arthur M. Siskind -------------------------------------- Attorney NEWS LIMITED (ACN 007871178) By /s/ Arthur M. Siskind -------------------------------------- Attorney NEWS SECURITIES B.V. By /s/ D. Devoe -------------------------------------- Managing Director 124 GUARANTORS: ---------- FOX BROADCASTING COMPANY By /s/ Dean Ferris -------------------------------------- Senior Vice President FOX, INC. By /s/ Larry Jacobson -------------------------------------- Senior Vice President FOX TELEVISION STATIONS, INC. By /s/ Larry Jacobson -------------------------------------- Senior Vice President FOXVIDEO INC. By /s/ David E. Miller -------------------------------------- Treasurer HARPERCOLLINS PUBLISHERS INC. By /s/ Neil Topham -------------------------------------- CFO HARPERCOLLINS (UK) By /s/ D. DeVoe -------------------------------------- Director THE HERALD AND WEEKLY TIMES LIMITED (ACN 004113937) By /s/ Arthur M. Siskind -------------------------------------- 125 Attorney NATIONWIDE NEWS PTY. LIMITED (ACN 008438828) By /s/ Arthur M. Siskind -------------------------------------- Attorney NEWS AMERICA FSI, INC. By /s/ Arthur M. Siskind -------------------------------------- Executive Vice President NEWS AMERICA HOLDINGS INCORPORATED By /s/ Arthur M. Siskind -------------------------------------- Executive Vice President NEWS AMERICA PUBLICATIONS, INC. By /s/ Arthur M. Siskind -------------------------------------- Executive Vice President NEWS AMERICA PUBLISHING INCORPORATED By /s/ Arthur M. Siskind -------------------------------------- Executive Vice President THE NEWS CORPORATION LIMITED (ACN 007910330) By /s/ Arthur M. Siskind -------------------------------------- Director 126 NEWSCORP INVESTMENTS LIMITED By /s/ Arthur M. Siskind -------------------------------------- Attorney NEWS INTERNATIONAL PLC By /s/ Arthur M. Siskind -------------------------------------- Attorney NEWS LIMITED By /s/ Arthur M. Siskind -------------------------------------- Attorney NEWS PUBLISHING AUSTRALIA LIMITED By /s/ Paula Wardynski -------------------------------------- Vice President NEWS SECURITIES B.V. By /s/ D. DeVoe -------------------------------------- Managing Director NEWS GROUP NEWSPAPERS LIMITED By /s/ Arthur M. Siskind -------------------------------------- Attorney TWENTIETH CENTURY FOX FILM CORPORATION By s/ Larry Jacobson -------------------------------------- Senior Vice President 127 TWENTIETH HOLDINGS CORPORATION By /s/ Larry Jacobson -------------------------------------- Senior Vice President ARRANGERS/MANAGING AGENTS: ------------------------- CHEMICAL BANK By /s/ Eileen M. Burke -------------------------------------- Vice President CITIBANK, N.A. By /s/ Judith C. Fishlow -------------------------------------- Vice President COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) By /s/ John E. O'Brien -------------------------------------- Head of Lending NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937) By /s/ Peter G. Murdoch -------------------------------------- Senior Relationship Manager SAMUEL MONTAGU & CO. LIMITED By /s/ Brian Merfield -------------------------------------- Director WESTPAC BANKING CORPORATION 128 By /s/ Peter M. Simpson -------------------------------------- Chief Manager, Corporate Banking NSW CITIBANK, N.A., as Administrative and Documentation Agent By /s/ Judith C. Fishlow -------------------------------------- Vice President CITISECURITIES LIMITED, as Australian Agent By /s/ Susan D. Forbes -------------------------------------- Vice President Director AGENTS: ------ COMMONWEALTH BANK OF AUSTRALIA, (ACN 123 123 124) By /s/ John E. O'Brien -------------------------------------- Head of Lending NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937) By /s/ Peter G. Murdoch -------------------------------------- Senior Relationship Manager WESTPAC BANKING CORPORATION (ARBN 007 457 141) By /s/ Peter M. Simpson -------------------------------------- Chief Manager, Corporate Banking NSW LLOYDS BANK PLC 129 By /s/ Christopher Simon Palmer -------------------------------------- Manager CO-AGENTS: --------- CITIBANK, N.A. By /s/ Judith C. Fishlow -------------------------------------- Vice President MIDLAND BANK PLC By /s/ S. J. Williams -------------------------------------- Corporate Banking Manager NATIONSBANK OF TEXAS, N.A. By /s/ Laura B. Whitley -------------------------------------- Senior Vice President THE BANK OF NOVA SCOTIA By /s/ I. A. Hodgart -------------------------------------- Account Officer CHEMICAL BANK By /s/ Eileen M. Burke -------------------------------------- Vice President BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By /s/ Charles S. Francavilla -------------------------------------- Senior Vice President 130 THE BANK OF NEW YORK By /s/ Bart J. Partington -------------------------------------- Vice President THE FIRST NATIONAL BANK OF BOSTON By /s/ Mary Etta Schneider -------------------------------------- Managing Director CANADIAN IMPERIAL BANK OF COMMERCE By /s/ Cynthia Hockenhull -------------------------------------- Vice President CREDIT LYONNAIS By /s/ A. P. Revill -------------------------------------- Head of Corporate Banking CREDIT SUISSE By /s/ J. Maitland -------------------------------------- Senior Relationship Manager By /s/ I. Guertles -------------------------------------- Relationship Manager THE TORONTO-DOMINION BANK By /s/ Karen W. Hennessy -------------------------------------- Director 131 LEAD MANAGERS: ------------- BARCLAYS BANK PLC By /s/ P. E. Hall -------------------------------------- Manager THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY By /s/ Junri Oda -------------------------------------- Senior Vice President and Senior Manager MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Deborah A. Brodheim -------------------------------------- Vice President NATIONAL WESTMINSTER BANK PLC By /s/ M. M. Oakley -------------------------------------- Senior Corporate Banking Executive BANKS: ----- ABN AMRO BANK N.V. By /s/ Laura G. Fazio -------------------------------------- Vice President By /s/ Nancy F. Watkins -------------------------------------- Vice President 132 BANCO CENTRAL HISPANOAMERICANO, S.A. LONDON BRANCH By /s/ Fernando Alonso -------------------------------------- General Manager By /s/ W. Kenneth Scott -------------------------------------- Deputy General Manager BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By /s/ Charles S. Francavilla -------------------------------------- Senior Vice President THE BANK OF NEW YORK By /s/ Bart J. Partington -------------------------------------- Vice President THE BANK OF NOVA SCOTIA By /s/ I.A. Hodgart -------------------------------------- Account Officer BANK OF SCOTLAND By /s/ J. Craig Wilson -------------------------------------- Vice President BANQUE NATIONALE DE PARIS By /s/ Paul Ryan -------------------------------------- Senior Manager - Corporate 133 BARCLAYS BANK PLC By /s/ P.E. Hall -------------------------------------- Manager BARCLAYS BANK AUSTRALIA LTD By /s/ Jennifer Robyn Clark -------------------------------------- Attorney By /s/ Malcolm J. McDermott -------------------------------------- Attorney CANADIAN IMPERIAL BANK OF COMMERCE By /s/ Cynthia Hockenhull -------------------------------------- Vice President CHEMICAL BANK By /s/ Eileen M. Burke -------------------------------------- Vice President CHEMICAL AUSTRALIA LIMITED By /s/ Bruce R. Message -------------------------------------- Managing Director By /s/ George N. Markou -------------------------------------- General Manager CITIBANK, N.A. By /s/ Judith C. Fishlow -------------------------------------- Vice President 134 CITIBANK LIMITED By /s/ T. J. Fancourt -------------------------------------- General Manager COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) By /s/ John E. O'Brien -------------------------------------- Head of Lending CREDIT LYONNAIS By s/ A. P. Revill -------------------------------------- Head of Corporate Banking CREDIT SUISSE By /s/ J. Maitland -------------------------------------- Senior Relationship Manager By /s/ I. Guertler -------------------------------------- Relationship Manager THE FIRST NATIONAL BANK OF BOSTON By /s/ Mary Etta Schneider -------------------------------------- Managing Director THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY By /s/ Junri Oda -------------------------------------- Senior Vice President and Senior Manager 135 LLOYDS BANK PLC By /s/ Christopher Simon Palmer ----------------------------- Manager MELLON BANK, N.A. By /s/ W. R. Browne -------------------------------------- Vice President MIDLAND BANK PLC By /s/ S. J. Williams -------------------------------------- Corporate Banking Manager MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Deborah A. Brodheim -------------------------------------- Vice President NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937) By /s/ Peter G. Murdoch -------------------------------------- Senior Relationship Manager NATIONAL WESTMINSTER BANK PLC By /s/ M. M. Oakley -------------------------------------- Senior Corporate Banking Executive NATWEST AUSTRALIA BANK LIMITED By /s/ M. M. Oakley -------------------------------------- Senior Corporate Banking Executive 136 NATIONSBANK OF TEXAS, N.A. By /s/ Laura B. Whitley -------------------------------------- Senior Vice President STANDARD CHARTERED BANK By /s/ Julian Wynter -------------------------------------- Senior Manager By /s/ Stephen Lilley -------------------------------------- Manager STATE BANK OF NEW SOUTH WALES LIMITED By /s/ Gary Sly -------------------------------------- Account Manager, Business Banking Central By /s/ Leo Leslie -------------------------------------- Acting Regional Manager, Business Banking Central THE TORONTO-DOMINION BANK By /s/ Karen W. Hennessy -------------------------------------- Director TORONTO DOMINION AUSTRALIA LIMITED By /s/ Paul Anthony Birch -------------------------------------- Associate Director - Corporate Finance 137 WESTPAC BANKING CORPORATION (ARBN 007 457 141) By /s/ Peter M. Simpson -------------------------------------- Chief Manager, Corporate Banking NSW 138 EX-10.29 8 FORM OF MASTER INTERCOMPANY AGREEMENT EXHIBIT 10.29 FORM OF MASTER INTERCOMPANY AGREEMENT DATED AS OF NOVEMBER __, 1998 BY AND BETWEEN THE NEWS CORPORATION LIMITED AND FOX ENTERTAINMENT GROUP, INC. TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS................................................................................1 ARTICLE II EXECUTIVE SERVICES.........................................................................3 Section 2.1 Senior Executive Services to be Made Available to Fox.........3 ARTICLE III ADMINISTRATIVE AND OTHER SERVICES..........................................................4 Section 3.1 Cash Management...............................................4 Section 3.2 Administrative and Other Management Services..................4 Section 3.3 Insurance.....................................................5 Section 3.4 Employee Benefit Plans........................................5 Section 3.5 Services of Employees of Fox and the Fox Group Subsidiaries...5 ARTICLE IV FACILITIES.................................................................................5 Section 4.1 News Corporation Facilities...................................5 Section 4.2 Fox Facilities................................................5 ARTICLE V CONSIDERATION FOR SERVICES.................................................................5 Section 5.1 Consideration for Services.........................................5 ARTICLE VI TRADEMARKS AND SERVICE MARKS...............................................................6 Section 6.1 License to Fox................................................6 Section 6.2 License to News...............................................6 ARTICLE VII INDEMNITIES AND ASSUMPTION OF CERTAIN LIABILITIES BY FOX...................................6 Section 7.1 Indemnities...................................................6 ARTICLE VIII SEC AND OTHER REPORTING OBLIGATIONS........................................................7 Section 8.1 Information Relating to Fox...................................7 Section 8.2 Information Relating to News Corporation......................7 ARTICLE IX NEWS CORPORATION INDEMNITY.................................................................7 Section 9.1 Indemnification by News Corporation. ........................7 ARTICLE X MISCELLANEOUS..............................................................................7 Section 10.1 Entire Agreement..............................................7 Section 10.2 Governing Law.................................................8 Section 10.3 Termination...................................................8 Section 10.4 Notices.......................................................8 Section 10.5 Separability..................................................9
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Page Section 10.6 Amendment; Waiver............................................9 Section 10.7 Assignment and Binding Effect................................9 Section 10.8 No Benefit to Others.........................................9 Section 10.9 Counterparts.................................................9 Section 10.10 Interpretation...............................................9 Section 10.11 Consent to Jurisdiction: No Jury Trial......................10
MASTER INTERCOMPANY AGREEMENT MASTER INTERCOMPANY AGREEMENT (this "AGREEMENT") dated as of November __, 1998, by and between THE NEWS CORPORATION LIMITED, a South Australia corporation ("NEWS CORPORATION"), and FOX ENTERTAINMENT GROUP, INC., a Delaware corporation ("FOX"). WHEREAS, News Corporation has been engaged, though its Subsidiaries, in the Film and Television Business; WHEREAS, at the date hereof, substantially all of the equity of Fox is owned by News Corporation; WHEREAS, the Board of Directors of News Corporation has determined that it is in the best interests of News Corporation and its shareholders that Fox offer shares of its Class A Common Stock, par value $.01 per share (the "Class A Common Stock") for sale to the public in an initial public offering ("IPO") and in connection therewith to reorganize its businesses so that at the Effective Date, the Film and Television Business of News Corporation will be held by Fox and its Subsidiaries (the "Reorganization"); WHEREAS, News Corporation and Fox wish to provide for the various relationships between them on and after the Effective Date; NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS ------------ As used herein, the following terms shall have the meanings set forth below: "Agreement" shall have the meaning set forth in the recitals. --------- "Class A Common Stock" shall have the meaning set forth in the recitals. -------------------- "Controlled Affiliates" shall mean a Person that directly, or indirectly --------------------- through intermediates, is controlled by another Person. "Designated Senior Executives" shall have the meaning set forth in Section ---------------------------- 2.1 hereof. "Effective Date" shall mean the date on which the Registration Statement is -------------- declared effective by the SEC. "Film and Television Business" shall mean the following businesses ---------------------------- conducted by News Corporation and its Subsidiaries, on the Effective Date: (i) the development, production and distribution of feature films and television programs; (ii) television broadcasting and (iii) cable network programming, including the ownership by News Corporation and its Subsidiaries of certain interests in such business, as more fully described in the narrative portion of the section entitled "Business" in the Registration Statement, but excluding, in any event, the interests of News Corporation in non-United States-based television broadcasting businesses not owned by Fox or the Transferred Business Entities at the Effective Date. "Fox" shall have the meaning set forth in the recitals. --- "Fox Group Subsidiaries" shall mean, following the consummation of the ---------------------- Reorganization, the direct and indirect Subsidiaries of Fox and their respective predecessors, Subsidiaries and affiliates, including the Transferred Business Entities. "Governmental Authority" shall mean any nation or government, any state, ---------------------- municipality or other political subdivision thereof and any entity, agency or commission, domestic or foreign, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any executive official thereof. "IPO" shall have the meaning set forth in the recitals. --- "Liabilities" shall mean any and all indebtedness, liabilities and ----------- obligations, whether accrued, fixed or contingent, mature or inchoate, known or unknown, reflected on a balance sheet or otherwise, including, but not limited to, those arising under any law, rule, regulation, action, order, injunction or consent decree of any Governmental Authority or any judgement of any court of any kind or any award of any arbitrator of any kind, and those arising under any contract, commitment or undertaking. "News Corporation" shall have the meaning set forth in the recitals. ----------------- "Non-Fox Group Subsidiaries" shall mean the direct and indirect -------------------------- Subsidiaries of News Corporation, excluding Fox and the Fox Group Subsidiaries. "Person" shall mean any individual, corporation, partnership, limited ------ liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. "Registration Statement" shall mean the registration statement on Form S-1 ---------------------- (Reg. No. 333-61515) of Fox as filed with the SEC in connection with the IPO, as such registration statement may be amended or supplemented from time to time. "Reorganization" shall have the meaning set forth in the recitals. -------------- -2- "SEC" shall mean the United States Securities and Exchange Commission. --- "Subsidiary" shall mean, with respect to any Person (a) a corporation, at ---------- least a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof or (b) any other Person (other than a corporation) in which such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof has at least majority ownership interest and the power to direct the policies, management and affairs thereof and shall, with respect to News Corporation and Fox, include Fox Television Holdings, Inc. and its Subsidiaries and successors. For purposes of this definition, any director's qualifying shares or investments by foreign nationals mandated by applicable law shall be disregarded in determining the ownership of a Subsidiary. "Transferred Business Entities" shall mean those corporations, limited ----------------------------- liability companies or other entities which will be transferred to and controlled by Fox following the Reorganization and their respective direct and indirect Subsidiaries and other entities controlled by them or in which they have an interest, including, without limitation, Fox Family Worldwide, Inc., Fox/Liberty Networks, LLC, Fox/Liberty Ventures, LLC and International Sports Programming Partners, G.P., and their respective Subsidiaries. ARTICLE II EXECUTIVE SERVICES ------------------- Section 2.1 Senior Executive Services to be Made Available to Fox. News ----------------------------------------------------- Corporation shall continue to cause to be made available, directly or through the Non-Fox Group Subsidiaries, to Fox and the Fox Group Subsidiaries, from time to time, the services of certain senior executives of News or its Subsidiaries (the "Designated Senior Executives"). (a) Immediately following the Effective Date, the following persons shall be Designated Senior Executives: K. Rupert Murdoch Chief Executive of News Corporation Peter Chernin President and Chief Executive Officer of News Corporation Chase Carey Co-Chief Operating Officer of News Corporation David F. DeVoe Senior Executive Vice President and Chief Financial Officer of News Corporation Arthur M. Siskind Senior Executive Vice President and Group General Counsel of News Corporation -3- (b) News Corporation or the Non-Fox Group Subsidiaries may, from time to time, designate other or additional senior executives of News Corporation to serve as Designated Senior Executives, and may terminate the availability of the services of any Designated Senior Executive or Executives upon notice to Fox. News Corporation shall have no liability whatsoever to Fox or the Fox Group Subsidiaries as a result of the designation of any Designated Senior Executive or the termination of the availability of the services of any Designated Senior Executive. (c) Fox acknowledges that the Designated Senior Executives designated above are, and that Designated Senior Executives who may be designated in the future may be, directors and executive officers of News Corporation and the Non- Fox Group Subsidiaries, and that such persons may have fiduciary and other obligations to such other entities. Nothing herein shall be deemed to affect in any respect the fiduciary obligations of such Designated Senior Executives to News Corporation or the Non-Fox Group Subsidiaries. (d) Fox and News Corporation acknowledge that from time to time any Designated Senior Executive, and any other officer or director of any member of the Fox Group who is at such time also an officer or director of News Corporation or any of its Subsidiaries or affiliates outside of the Fox Group (i) may, by reason of his or her positions, become subject to conflicts or potential conflicts of interest between the Fox Group and the Non-Fox Group, or (ii) may become aware of corporate opportunities which may be of interest to the Fox Group. Fox hereby acknowledges that it shall have no rights (except where the failure to have such rights would be in contravention of applicable laws and the applicable rules of the New York Stock Exchange, Inc.) at any time against any Designated Senior Executive or officer or director, and against News Corporation or any of the Non-Fox Group Subsidiaries arising out of or resulting from, conflicts of interest of failure to disclose or to properly respond to corporate opportunities. ARTICLE III ADMINISTRATIVE AND OTHER SERVICES ---------------------------------- Section 3.1 Cash Management. Fox and the Fox Group Subsidiaries --------------- shall continue to utilize the worldwide treasury and cash management function of News Corporation and the Non-Fox Group Subsidiaries, including the use of bank overdraft facilities. Additionally, Fox agrees that the excess cash balances of Fox and the Fox Group Subsidiaries will be available to News Corporation and the Non-Fox Group Subsidiaries. It is anticipated that following the IPO, Fox and the Fox Group Subsidiaries will receive interest on cash balances based upon News Corporation's average income on cash balances on deposit and pay interest on overdrafts at commercial interest rates which shall not exceed News Corporation's average cost of borrowings. Section 3.2 Administrative and Other Management Services. News -------------------------------------------- Corporation shall, directly or through the Non-Fox Group Subsidiaries, provide general overhead, financial, accounting, legal, tax, professional, management, material procurement, transportation and other services to Fox and the Fox Group Subsidiaries. -4- Section 3.3 Insurance. News Corporation or the Non-Fox Group --------- Subsidiaries shall provide insurance coverages on behalf of Fox and the Fox Group Subsidiaries against certain risks and in amounts of coverage consistent with current coverages, or as otherwise may be agreed between them. Nothing herein shall obligate News Corporation to maintain any type or amount of coverage. To the extent any loss is incurred by Fox or the Fox Group Subsidiaries, such entities shall be responsible for the payment of any deductible amounts related thereto and any amounts in excess of applicable coverage limits. Section 3.4 Employee Benefit Plans. Certain of the employees of ---------------------- Fox and the Fox Group Subsidiaries may from time to time continue to be eligible to participate in stock option and other employee benefit plans maintained by News Corporation or the Non-Fox Group Subsidiaries. Section 3.5 Services of Employees of Fox and the Fox Group ---------------------------------------------- Subsidiaries. News Corporation and the Non-Fox Group Subsidiaries may from time - ------------ to time request that certain employees of Fox and the Fox Group Subsidiaries devote time to business activities of News Corporation, the Non-Fox Group Subsidiaries and their affiliated and associated companies. ARTICLE IV FACILITIES ----------- Section 4.1 News Corporation Facilities. News Corporation shall --------------------------- from time to time permit Fox and the Fox Group Subsidiaries to use all or a portion of certain premises which may be owned or, subject to the terms of the applicable lease, leased by News Corporation or the Non-Fox Group Subsidiaries. Section 4.2 Fox Facilities. Fox shall from time to time permit News -------------- Corporation and the Non-Fox Group Subsidiaries to use all or a portion of certain premises which may be owned or, subject to the terms of the applicable lease, leased by Fox or the Fox Group Subsidiaries. ARTICLE V CONSIDERATION FOR SERVICES Section 5.1 Consideration for Services. The consideration to be paid -------------------------- by News Corporation or the Non-Fox Group Subsidiaries or by Fox or the Fox Group Subsidiaries for the services and other arrangements set forth in Article II, Article III and Article IV hereof will be mutually agreed upon by News Corporation and the Fox (or such Subsidiaries as either party hereto may designate from time to time) based upon allocated costs; provided, that all material arrangements between News Corporation or the Non-Fox Subsidiaries, on the one hand, and Fox or the Fox Group Subsidiaries, on the other hand, will be subject to the approval of the audit committees of the Board of Directors of News Corporation and Fox, respectively. -5- ARTICLE VI TRADEMARKS AND SERVICE MARKS ---------------------------- Section 6.1 License to Fox. News Corporation, on behalf of itself -------------- and the Non-Fox Group Subsidiaries, hereby grants to Fox and the Fox Group Subsidiaries a royalty-free license to continue to use the trademarks and service marks of News Corporation and the Non-Fox Group Subsidiaries currently used by Fox and the Fox Group Subsidiaries, together with such other marks as may be from time to time, be agreed to by them. Fox and the Fox Group Subsidiaries shall take all reasonable precautionary measures to prevent the unauthorized use and the dilution of the trademarks and servicemarks of News Corporation and the Non-Fox Group Subsidiaries, using the same degree care as the manner used by News Corporation and the Non-Fox Group Subsidiaries to prevent the unauthorized use and the dilution of the trademarks and servicemarks of News Corporation and the Non-Fox Group Subsidiaries. The license granted hereby may be terminated at any time by News Corporation. Section 6.2 License to News. Fox, on behalf of itself and the Fox --------------- Group Subsidiaries, hereby grants to News Corporation and the Non-Fox Group Subsidiaries a royalty-free license to use the trademarks and service marks of Fox and the Fox Group Subsidiaries currently used by News Corporation and the Non-Fox Group Subsidiaries, together with such other marks as may be from time to time, be agreed to by them. News Corporation and the Non-Fox Group Subsidiaries shall take all reasonable precautionary measures to prevent the unauthorized use and the dilution of the trademarks and servicemarks of Fox and the Fox Group Subsidiaries, using the same degree care as the manner used by Fox and the Fox Group Subsidiaries to prevent the unauthorized use and the dilution of the trademarks and servicemarks of Fox and the Fox Group Subsidiaries. ARTICLE VII INDEMNITIES AND ASSUMPTION OF CERTAIN LIABILITIES BY FOX -------------------------------------------------------- Section 7.1 Indemnities. Effective the Effective Date, Fox shall ----------- assume all of the obligations and commitments of News Corporation and the Non- Fox Group Subsidiaries under, and shall indemnify and hold News Corporation and the Non-Fox Group Subsidiaries harmless from and against, any and all liabilities, obligations, claims, costs and expenses (including reasonable attorneys' fees) incurred or which may be incurred by News Corporation or the Non-Fox Group Subsidiaries resulting from or arising out of, obligations that News Corporation or the Non-Fox Group Subsidiaries have undertaken on behalf of Fox or the Fox Group Subsidiaries, if any. -6- ARTICLE VIII SEC AND OTHER REPORTING OBLIGATIONS ----------------------------------- Section 8.1 Information Relating to Fox. To the extent that News --------------------------- Corporation or any of the Non-Fox Group Subsidiaries shall, from time to time, require information (including audited or unaudited financial statements ) from Fox or the Fox Group Subsidiaries in order to satisfy reporting or disclosure obligations imposed by the SEC, the New York Stock Exchange, the Australian Stock Exchange or any other stock exchange, or pursuant to any rule, regulation or other requirement of any Governmental Authority, Fox shall furnish or cause to be furnished to News, or applicable Non-Fox Subsidiary such information as may be required as promptly as may be practicable. Section 8.2 Information Relating to News Corporation. To the extent that Fox or any of the Fox Group Subsidiaries shall, from time to time, require information (including audited or unaudited financial statements ) from News Corporation or the Non-Fox Group Subsidiaries in order to satisfy reporting or disclosure obligations imposed by the SEC, the New York Stock Exchange or any other stock exchange, or pursuant to any rule, regulation or other requirement of any Governmental Authority, News Corporation shall furnish or cause to be furnished to Fox or the applicable Fox Group Subsidiary such information as may be required as promptly as may be practicable. ARTICLE IX NEWS CORPORATION INDEMNITY -------------------------- Section 9.1 Indemnification by News Corporation. News Corporation ----------------------------------- agrees to indemnify and hold Fox and each of the Fox Group Subsidiaries harmless from and against any and all liabilities, obligations, claims, costs, damages and expenses (including reasonable attorneys' fees) they may incur pursuant to guarantees they have issued, or will issue in the future of (i) the obligations of News Corporation and certain of the Non-Fox Group Subsidiaries under the Revolving Credit Agreement dated May 19, 1993 by and among News Corporation, certain of its subsidiaries and various banks, (ii) the obligations of News America Incorporated under various guaranteed debt instruments and (iii) any future obligations of News Corporation or any of the Non-Fox Group Subsidiaries, unless the terms of such future obligations specifically state otherwise. ARTICLE X MISCELLANEOUS ------------- Section 10.1 Entire Agreement. This Agreement contains, and is ---------------- intended as, a complete statement of all of the terms of the arrangements between the parties with respect to the -7- matters provided for, and supersedes any previous agreements and understandings between the parties with respect to those matters. Section 10.2 Governing Law. This Agreement shall be governed by, and ------------- construed and enforced in accordance with, the laws of the State of New York. Section 10.3 Termination. This Agreement may be terminated prior ----------- to the Effective Date by the mutual consent of News Corporation and Fox. Section 10.4 Notices. All notices and other communications under ------- this Agreement shall be in writing and shall be deemed given when delivered personally, mailed by registered mail, return receipt requested, sent by recognized overnight delivery service or, to the extent receipt is confirmed, by telecopy, telefax, or other electronic transmission service to the parties at the following addresses (or to such other address as a party may have specified by notice given to the other parties pursuant to this provision): If to News Corporation, to: The News Corporation Limited 1211 Avenue of the Americas New York, New York 10036 Attention: Chief Financial Officer With a copy to: The News Corporation Limited 1211 Avenue of the Americas New York, New York 10036 Attention: Group General Counsel If to Fox, to: Fox Entertainment Group, Inc. 1211 Avenue of the Americas New York, New York 10036 Attention: Chief Financial Officer With a copy to: Fox Entertainment Group, Inc. 1211 Avenue of the Americas New York, New York 10036 Attention: General Counsel -8- Section 10.5 Separability. If at any time any of the covenants or ------------ the provisions contained herein shall be deemed invalid or unenforceable by the laws of the jurisdiction wherein it is to be enforced, by reason of being vague or unreasonable as to duration, geographic scope, scope of activities restricted or for any other reason, such covenants or provisions shall be considered divisible as to such portion and such covenants or provisions shall become and be immediately amended and reformed to include only such covenants or provisions as are enforceable by the court or other body having jurisdiction over this Agreement. The parties agree that such covenants or provisions, as so amended and reformed, shall be valid and binding as though the invalid or unenforceable portion had not been included herein. Section 10.6 Amendment; Waiver. No provision of this Agreement ----------------- may be amended or modified except by an instrument or instruments in writing signed by News Corporation and Fox. No waiver of any provision hereof shall be construed as a waiver of any other provision. Any waiver must be in writing. Section 10.7 Assignment and Binding Effect. Neither Party may ----------------------------- assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other party. Section 10.8 No Benefit to Others. The representations, warranties, covenants and agreements contained in this Agreement are for the sole benefit of the parties and their respective successors and permitted assigns and they shall not be construed as conferring and are not intended to confer any rights on any other persons. Section 10.9 Counterparts. This Agreement may be executed in ------------ counterparts, each of which shall be deemed an original, and each party may become a party hereto by executing a counterpart hereof. This Agreement and any counterpart so executed shall be deemed to be one and the same instrument. Section 10.10 Interpretation. Article titles, headings to sections -------------- and any table of contents are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation hereof. The Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein. As used herein, "include", "includes" and "including" are deemed to be followed by "without limitation" whether or not they are in fact followed by such words or words of like import, the singular includes the plural and vice versa, and references to any agreement or other document are to such agreement or document as amended and supplemented from time to time. All accounting terms not defined in this Agreement shall have the meanings determined by generally accepted accounting principles as in effect from time to time. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The definitions contained in this Agreement are applicable to the masculine as well as the feminine and neuter genders of such term, and references to a person are also to its permitted successors and assigns. -9- Section 10.11 Consent to Jurisdiction: No Jury Trial. Each of News -------------------------------------- Corporation and Fox irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County and (b) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each of News Corporation and Fox further agrees that service of any process, summons, notice or document by U.S. registered mail to such party's respective address set forth in Section 9.4 will be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding sentence. Each of News Corporation and Fox irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transaction contemplated hereby in (i) the Supreme Court of the State of New York, New York County or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF NEWS CORPORATION AND FOX HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. -10- IN WITNESS WHEREOF, the undersigned have executed this Master Intercompany Agreement as of the date first above written. THE NEWS CORPORATION LIMITED By: -------------------------------------- Name: Title: FOX ENTERTAINMENT GROUP, INC. By: -------------------------------------- Name: Title: -11- EX-10.31 9 FORM OF TAX SHARING AGREEMENT EXHIBIT 10.31 FORM OF TAX SHARING AGREEMENT ----------------------------- THIS AGREEMENT is entered into as of the ____ day of ______, 1998, by and among the following corporations: News Publishing Australia Limited, a Delaware corporation ("NPAL"); Fox Entertainment Group, Inc., a Delaware corporation ("Entertainment"); Fox Television Holdings, Inc., a Delaware Corporation ("Television") ; the Subsidiaries of Entertainment (the "Entertainment Subsidiaries"); the Subsidiaries of NPAL (other than Entertainment, the Entertainment Subsidiaries the Television Subsidiaries) (the "NPAL Subsidiaries"); and the Subsidiaries of Television (the "Television Subsidiaries"). WITNESSETH: ---------- WHEREAS, NPAL, Entertainment, the Entertainment Subsidiaries and the NPAL Subsidiaries (hereinafter sometimes referred to as "Members"; or in the singular "Member") are part of an "Affiliated Group" as such term is defined by Section 1504(a) of the Internal Revenue Code of 1986, as amended or any successor thereto (the "Code")); WHEREAS, such Affiliated Group (as it then existed) has elected to file consolidated United States federal income Tax Returns for the past several taxable years in accordance with Section 1501 of the Code; and WHEREAS, NPAL is the Common Parent (as such term is defined in Section 1504(a) of the Code) for the Affiliated Group which includes NPAL, Entertainment, the NPAL Subsidiaries and the Entertainment Subsidiaries; and WHEREAS, the Parties desire to agree upon a method for (i) sharing of consolidated, combined or unitary liabilities in respect of federal, state and/or local income taxes; (ii) compensating any Member for utilization of its net operating losses, tax credits and other tax benefits in arriving at the Affiliated Group tax liability as determined under the United States federal consolidated return regulations; (iii) providing for the receipt of any refund arising from net operating losses or tax credits from subsequent taxable years and for payments upon subsequent adjustments; and (iv) for certain other related matters, as set forth herein. NOW, THEREFORE, in consideration of the promises and mutual undertakings contained herein, the Parties hereto hereby agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms will have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined): "CODE" shall have the meaning set forth in the preamble to this Agreement and shall refer to the Code as in effect for the taxable period in question. "CONSOLIDATED GROUP" means the Affiliated Group (as defined in Section 1504(a) of the Code) of corporations of which NPAL is the common parent. "CONSOLIDATED GROUP RETURN" means the consolidated United States federal income Tax Returns for the Consolidated Group. "DIRECTOR OF TAXES" means the person is appointed by NPAL to administer and effectuate this Agreement. "EFFECTIVE DATE" means the date set forth as the effective date of this Agreement in Section 2.1 hereof. "ENTERTAINMENT" shall have the meaning set forth in the preamble to this Agreement. "ENTERTAINMENT SUBSIDIARIES" shall have the meaning in the preamble to this Agreement. "FINAL DETERMINATION" means the final resolution of liability for any United States Federal, state or local Tax for any taxable period, including any related interest or penalties, by or as a result of: (i) a final and unappealable decision, judgment, decree or other order of a court of competent jurisdiction; (ii) a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or comparable agreement under the laws of other jurisdictions, which resolves the entire liability for any Tax for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing the Tax; or (iv) any other final disposition as determined by the Director of Taxes, including by reason of the expiration of the applicable statute of limitations. "IRS" means the United States Internal Revenue Service. "IRS OVERPAYMENT RATE" shall have the meaning set forth in Section 3.5 of this Agreement. "IRS UNDERPAYMENT RATE" shall have the meaning set forth in Section 3.5 of this Agreement. -2- "MEMBER" shall have the meaning set forth in the preamble to this Agreement. "NET REVERSAL BENEFIT" shall have the meaning set forth in Section 3.3(a) of this Agreement. "NPAL" shall have the meaning set forth in the preamble to this Agreement "PARTIES" shall have the meaning set forth in Section 5.11 of this Agreement. "REALIZED BENEFIT" means a reduction of liability in respect of any Tax resulting from the use of an item of loss, deduction or credit in accordance with the ordering rules prescribed by the Code and the Regulations promulgated thereunder. "REGULATIONS" means the proposed, temporary or final regulations issued by the Treasury Department under the Code as in effect for the taxable period in question. "SEPARATE RETURN TENTATIVE MINIMUM TAX LIABILITY" will mean the alternative minimum tax liability of a Member of a Consolidated Group determined as if such Member were filing a separate income Tax Return under the Code with adjustments consistent with those used in computing Separate Return Regular Tax Liability as defined below. "SEPARATE RETURN REGULAR TAX LIABILITY" will mean the tax liability of a Member of a Consolidated Group determined in accordance with Regulation Section 1.1552-l(a)(2)(ii) as if such Member were filing a separate income Tax Return under the Code and the term shall not have the same meaning as set forth in Regulations Section 1.1502-12. For purposes of determining the "Separate Return Tax Liability" of a Member, the following principles apply: (a) Limitations on the calculation of a deduction or the utilization of tax credits or the calculation of a tax liability will be made on a Consolidated Group basis. Accordingly, the limitations provided in Code Sections 38, 56, 170, 172, and similar limitations will be applied on a Consolidated Group basis. (b) Elections as to tax credits and tax computations, which may have been different from the consolidated treatment if separate returns were filed, will follow and be consistent with those elections made on an annual basis by the parent of the Consolidated Group for the Consolidated Group Return. (c) Any dividends received by one Member from another Member will be assumed to qualify for the 100 percent dividends received deduction of Code Section 243, or shall be eliminated from such calculation in accordance with Section 1.1502-13(f) of the Regulations. (d) Gain or loss on intercompany transactions shall be treated by each Member in the manner required by Section 1.1502-13 of the Regulations. -3- (e) Deductions attributable to the grant or exercise of options granted to employees, independent contractors or other similar persons of Entertainment, Television or the Entertainment Subsidiaries or the Television Subsidiaries with respect to shares of The News Corporation Limited shall be disregarded by Entertainment, Television, the Entertainment Subsidiaries and the Television Subsidiaries in determining "Separate Return Regular Tax Liability". (f) Net operating loss carryforwards and carrybacks and other tax benefit items of the relevant Member shall be disregarded in determining such Member's Separate Return Regular Tax Liability, unless the Member's carryforwards, carrybacks and other tax benefit items are actually availed of in reducing the consolidated federal income tax liability of the NPAL Group for the relevant tax period. "SUBSIDIARY" means any corporation, whether de jure or de facto, in which NPAL, Television or Entertainment directly or indirectly owns more than 50% of the equity having the power to vote on or direct the affairs of the entity. "TAX" or "TAXES" means any and all United States Federal, state or local taxes (i) based upon or measured in whole or in part by net income, together with interest, penalties and other additions thereto, imposed by the relevant Taxing Authority, and (ii) any gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with interest, penalties and other additions thereto, imposed by the relevant Taxing Authority. "TAXING AUTHORITY" means the Internal Revenue Service or any other United States federal, state, or local governmental authority responsible for the administration of any Tax. "TAX ITEM" shall have the meaning set forth in Section 3.3(a) of this Agreement. "TAX RETURN" means any return, filing, questionnaire or other document required to be filed, including requests for extensions of time, filings made with estimated Tax payments, claims for refund and amended returns that may be filed, for any taxable period with any Taxing Authority in connection with any Tax or Taxes (whether or not a payment is required to be made with respect to such filing). "TELEVISION" shall have the meaning set forth in the preamble of this Agreement. ARTICLE II PREPARATION AND FILING OF TAX RETURNS -4- SECTION 2.1. APPLICABILITY OF PROVISIONS OF AGREEMENT. This Agreement is effective as of ___________, 1998 (the "Effective Date") for NPAL, the NPAL Subsidiaries, Entertainment, the Entertainment Subsidiaries, Television and the Television Subsidiaries. SECTION 2.2. TAX RETURN PREPARATION. The Director of Taxes will cause to be prepared and filed all Tax Returns, which include both (i) NPAL or any of the NPAL Subsidiaries and (ii) any of Entertainment, Television, the Entertainment Subsidiaries or the Television Subsidiaries. The Director of Taxes will be responsible for the preparation and filing of any consents and requests for extension of time within which to file any such Tax Return or any related information. The Director of Taxes will have full responsibility and discretion for the final reporting positions, elections and disclosures taken in all such Tax Returns including Tax controversies relating to such Tax Returns as described in Section 4.2. SECTION 2.3. CONSOLIDATED GROUP TAX RETURN. Each of the Members will join in the filing annually of the Consolidated Group Return to the extent each is eligible to join in such return under the provisions of the Code and the regulations promulgated thereunder. SECTION 2.4. DOCUMENTATION. Each Party will furnish to the Director of Taxes on a timely basis such information, schedules, analyses and any other items as may be necessary to prepare and file any Tax Returns. The Subsidiaries that are members of the Consolidated Group will execute and deliver all documentation reasonably required (including powers of attorney, if requested) to enable the Director of Taxes to file, and to take all actions necessary or incidental to the filing of, the Consolidated Group Return (including, without limitation, the execution of Treasury Form 1122) or any amendment of the Consolidated Group Return. ARTICLE III ALLOCATION AND PAYMENT OF TAXES ARISING FROM CONSOLIDATED GROUP TAX RETURNS SECTION 3.1. ACKNOWLEDGMENT OF ELECTION TO ALLOCATE TAX LIABILITY. The elections made in previously filed Tax Returns will continue to govern the allocation of the Consolidated Group's Federal regular income tax liability between each member of the Consolidated Group. Pursuant to such elections, the Consolidated Group's Federal regular income tax liability will be allocated in the following manner: (a) Tax Charge. In accordance with the method set forth in Code Section 1552 and Regulation Section 1.1552-l(a)(l), the consolidated Federal regular income tax liability will be apportioned among the Members in accordance with the ratio which that portion of the consolidated taxable income attributable to each Member having taxable income bears to the sum of the taxable incomes of all such Members. Each Member will pay the parent of the Consolidated Group its allocated consolidated Federal tax liability as determined hereunder and pursuant to the settlement provisions of Section 3.7 of this Agreement; -5- (b) Tax Benefit. An additional liability amount will be allocated to each Member which, as a result of net operating losses, excess charitable contributions, foreign tax credits, investment tax credits or similar items arising from or generated by the activities of another Member or Members in either a separate return year or a consolidated return year, has an allocated tax liability determined under Section 3.1(a) above that is smaller than its Separate Return Regular Tax Liability. Only net operating losses and after tax benefits availed of in determining and reducing the consolidated federal income tax liability of the Consolidated Group will be considered for purposes of the preceding sentence. The additional liability amount allocated to each Member will be equal to 100% of the excess, if any, of (l) the Separate Return Regular Tax Liability of such Member for the taxable year, over (2) the allocated tax liability determined under Section 3.1(a) above. The total of any additional amounts allocated to all such Members for the consolidated return year will be paid (pursuant to the Settlement provisions of Section 3.7 of this Agreement) to those other Members which generated such losses, credits or deductions to which such total is attributable (hereinafter, referred to as "Loss Members"). Such payments to Loss Members will be made pursuant to a consistent method which reasonably reflects such items (such consistency and reasonableness to be determined by the Director of Taxes) and which is substantiated by specific records maintained by the Consolidated Group for such purposes. SECTION 3.2. ALTERNATIVE MINIMUM TAX ("AMT"). The following rules apply to the allocation of AMT liability and AMT credit to the Members of the Consolidated Group. (a) AMT Liability. The consolidated alternative minimum tax liability will be allocated for any Consolidated Group Return year to each Member whose Separate Return Tentative Minimum Tax Liability exceeds its Separate Return Regular Tax Liability. The total alternative minimum tax liability shown on the Consolidated Group Return will be apportioned to each Member according to the ratio of (i) the excess of its Separate Return Tentative Minimum Tax Liability over its Separate Return Regular Tax Liability to (ii) the total of all such Members' excess Separate Return Tentative Minimum Tax Liability over Separate Return Regular Tax Liability. For purposes of this allocation, if a Member has a regular tax net operating loss for the current period on a separate return basis, the Separate Return Tentative Minimum Tax Liability for that Member will be computed on the difference between such Member's regular tax net operating loss and any smaller alternative tax net operating loss or any alternative minimum taxable income. (b) AMT Credit. Any alternative minimum tax credit realized in subsequent years (determined on a first in first out basis) by the Consolidated Group as a result of incurring the alternative minimum tax liability will be allocated to the Members to which the original alternative minimum tax liability was allocated in proportion to such original allocation. If less than the full minimum tax credit is realized in a year, the amount of such minimum tax credit will be allocated to each Member that incurred the original alternative minimum tax liability in the manner determined by the Director of Taxes. -6- However, in no case will any Member be allocated an amount of AMT Credit in excess of its allocated original alternative minimum tax liability. SECTION 3.3. CARRYBACKS OF LOSSES AND CREDITS. (a) Benefits for Tax Items. In allocating the Consolidated Group's Federal tax liability, each Member will be entitled to the tax benefit that results from any of its net operating losses, net capital losses, deductions or credits (each, a "Tax Item") that are carried back to a prior period Consolidated Return. If the carryback of a Tax Item results in a carryforward or carryback of a Tax Item into a taxable year of the Consolidated Group and such carryforward or carryback produces a Realized Benefit, or other use, in such year or any subsequent year after considering all other items of taxable income or credits otherwise available to such other Members (a "Net Reversal Benefit"), then an amount equal to such Net Reversal Benefit, when realized, will be an additional liability for such year to be allocated to such other Members of the Consolidated Group pursuant to Section 3.1(b) of this Agreement. The benefit of any carryback of a Tax Item to any prior period Consolidated Return will be taken into account only when and to the extent that such carryback reduces the tax liability in a prior period Consolidated Group Return or that any resultant Net Reversal Benefit is realized. The Member generating, or otherwise bearing the cost of, such Tax Item that has been carried back will be paid pursuant to the Settlement provisions of Section 3.7 of this Agreement. (b) AMT. To the extent that additional AMT arises in a prior period Consolidated Return from a carryback of a Tax Item, then such AMT will be allocated to the Member giving rise to such carryback and such Member will be entitled to recover any Net Reversal Benefit resulting from any AMT credit carryforwards associated with such AMT. (c) Multiple Carrybacks of Tax Items. In the event that two or more Tax Items are carried back to any prior period Consolidated Return, their order of use will be determined by the Code and the regulations promulgated thereunder as determined by the Director of Taxes. SECTION 3.4. SUBSEQUENT ADJUSTMENTS. If the consolidated Federal income tax liability is adjusted for any taxable period, whether by means of an amended return, claim for refund, assessment arising from an Internal Revenue Service audit examination, or at the conclusion of any appeal or litigation or to reflect the results of any Final Determination, the liability of each Member will be recomputed under Sections 3.1 and 3.2 of this Agreement to give effect to such adjustments. The parent of the Consolidated Group will make payment to each Member for any reduction in its share of the consolidated Federal income tax liability, and in the case of an increase in tax liability, each Member will pay the parent of the Consolidated Group its allocable share of such increased consolidated Federal income tax liability, in each case together with any interest or penalties relating thereto as provided in Sections 3.5 and 3.6 of this Agreement. Any payments required under this Section 3.5 will be made in accordance with the provisions of Section 3.7 of this Agreement. -7- SECTION 3.5. INTEREST. For purposes of this Agreement, unless specifically provided otherwise, interest will be computed at the Federal statutory rate used, pursuant to Code Section 6621, in computing the interest payable to the IRS (the "IRS Underpayment Rate") or by the IRS (the "IRS Overpayment Rate") on the net balance due to or from the IRS. Interest determinations and allocations for Members will be made by the Director of Taxes at such time as the IRS finally determines interest owed for the tax period of the Consolidated Group Return. SECTION 3.6. PENALTIES. Any penalty will be allocated to such Members and upon such basis as the Director of Taxes deems just and proper in view of all applicable circumstances. It is the general intent of this Agreement that any penalty incurred by the Consolidated Group will be paid by the Member or Members whose actions or inactions, income, deductions, credits or allowances caused such penalty. SECTION 3.7. SETTLEMENTS. Notwithstanding any section of this Agreement, no payments under this Article III shall be required among Entertainment, Television, the Entertainment Subsidiaries and the Television Subsidiaries and no payments under this Article III shall be required among NPAL and the NPAL Subsidiaries. For purposes of this Agreement, all payments due or from Entertainment, Television, the Entertainment Subsidiaries or the Television Subsidiaries shall be netted, aggregated and paid to or by Entertainment. Similarly, all payments due or from any of NPAL or the NPAL Subsidiaries shall be netted, aggregated and paid to or by NPAL. (a) Estimated Taxes. With respect to each quarterly estimated tax payment, the Director of Taxes will notify Members of their assessed share of estimated tax payments to be made on the projected consolidated Federal income tax liability for the tax year. Payment to the common parent of the Consolidated Group will be made 24 hours in advance of the payment to the Internal Revenue Service. Such Member will receive credit for such estimated payments against its share of the apportioned consolidated Federal income tax liability as determined under this Article III. Any payment not made within the prescribed time period thereafter will bear interest at the IRS Underpayment Rate. (b) Tax Returns. A determination of a Member's apportioned consolidated Federal income tax liability under Sections 3.1 or 3.2 hereof will be made by the Director of Taxes. Payments resulting from such determination of tax liability, adjusted to reflect any payments previously made pursuant to Section 3.7(a) hereof, will be made by or to the common parent of the Consolidated Group to or by a Member 24 hours prior to the due date of such tax return without regard to any filing extensions. If the tax return filing is extended, an additional computation of a Member's tax liability will be made when the Consolidated Group Return is filed and adjustments that require additional payments will be paid by a Member within 24 hours of having received written notice of assessment for such liability from the Director of Taxes. Any payment not made within the prescribed time period thereafter will bear interest at the IRS Underpayment Rate. (c) Intentionally deleted. -8- (d) Subsequent Adjustments. Any payment required to be made pursuant to Section 3.4 hereof with respect to any tax return will be made by the Member obligated to make such payment (i) in the case of a refund of tax, within 24 hours after receipt (whether by way of payment, credit, or offset against any payments due or otherwise) of such refund or (ii) in the case of the payment of tax with respect to any such tax return, within 24 hours of the delivery of written notice of assessment for such liability from the Director of Taxes. Any payment described in clause (i) and any demand for payment described in clause (ii) will be accompanied by a calculation setting forth the basis for the amount paid or demanded. Any payment not made within the prescribed time period thereafter will bear interest at the IRS Underpayment Rate. (e) Tax Payments and IRS Refunds. Notwithstanding the foregoing provisions of this Section 3.7, when any tax payment is due to any Member from the parent of the Consolidated Group and a refund is due from the IRS, the parent of the Consolidated Group may defer settlement with such Member and make the required settlement payment within 24 hours of the receipt of such refund. (f) Manner of Settlement. All settlements required under this Agreement will be in U.S. dollars. Any settlement with the IRS or other Tax authorities for any matter falling within the scope of this Agreement is the responsibility of and will be determined by the Director of Taxes. SECTION 3.8. CONFIDENTIALITY OF RECORDS. The Parties agree that, except as otherwise expressly agreed in writing, any information furnished to the other Party pursuant to this Agreement is confidential. Except to the extent required for the proper filing of returns or resolving a dispute, audit, or litigation, the Parties covenant not to disclose, and not to permit disclosure of, such information to persons other than their own auditors or tax advisors. ARTICLE IV COOPERATION; TAX CONTROVERSIES SECTION 4.1. COOPERATION. (a) Administrative Compliance. NPAL and each of the other Parties to this Agreement will cooperate fully and to the extent reasonably requested by each other in connection with the preparation and filing of any Tax Return or the conduct of any audit, dispute, proceeding, suit or action concerning any issues or any other matter contemplated hereunder. Such cooperation will include, without limitation: (i) the retention and provision of books, records, documentation or other information relating to any Tax matter until the later of either (I) the expiration of the applicable statute of limitations (giving effect to any extension, waiver, or mitigation thereof) or (II) in the event any claim has been made under this Agreement for which such information is relevant, until a Final Determination with -9- respect to such claim; (ii) the provision of additional information with respect to material provided under clause (i) of this Section 4.1; (iii) the execution of any document that may be necessary or reasonably helpful in connection with the filing of any Tax Return by any Member of a Consolidated Group, or in connection with any audit, proceeding, suit or action addressed in the preceding sentence; and (iv) the use of the Party's best efforts to obtain any documentation from a governmental authority or a third party that may be necessary or helpful in connection with the foregoing. Each of Entertainment, Television, the Entertainment Subsidiaries and the Television Subsidiaries will make its employees and facilities available on a mutually convenient basis to facilitate such cooperation and will retain as permanent records all documentation necessary to enable it to determine any obligation under this Agreement. The records described above will be made available to the Director of Taxes within a reasonable time upon request and may be photocopied on an as needed basis. (b) Providing Advice and Notice. NPAL and each Party will use reasonable efforts to keep each other advised as to the status of Tax audits and litigation involving any issue which relates to any Tax of the Consolidated Group or could give rise to the liability of the Consolidated Group under this Agreement ( a "Liability Issue"). The Parties will each promptly notify the other of any inquiries by any Taxing Authority or any other administrative, judicial or other governmental authority that relate to any material amount of Tax that may be imposed on the other or any Subsidiary of the other that might arise under this Agreement including with such notice a copy of the revenue agent's report or similar report, notice of proposed adjustment, or notice of deficiency received by it relating to any Liability Issue or any adjustment referred to in Section 4.1(c) hereof. All notices and other communications under this Agreement shall be in writing and shall be deemed given when delivered personally, mailed by registered mail, return receipt requested, sent by recognized overnight delivery service or, to the extent receipt is confirmed, by telecopy, telefax, or other electronic transmission service to the Parties at the following addresses (or to such other address as a Party may have specified by notice given to the other Parties pursuant to this provision): If to NPAL or the NPAL Subsidiaries: News Publishing Australia Limited 1300 North Market Street Suite 404 Wilmington, Delaware 19801 -10- With a copy to: News Publishing Australia Limited 1300 North Market Street Suite 404 Wilmington, Delaware 19801 If to Entertainment, or the Entertainment Subsidiaries to: Fox Entertainment Group, Inc. 1211 Avenue of the Americas New York, New York 10036 Attention: Chief Financial Officer With a copy to: Fox Entertainment Group, Inc. 1211 Avenue of the Americas New York, New York 10036 Attention: General Counsel (c) Consulting on Proposed Tax Adjustments. The Director of Taxes will advise and consult with each Member with respect to any proposed Tax adjustments that are the subject of an IRS audit or investigation or are the subject of litigation, which may affect any Tax attribute of such Member. SECTION 4.2. TAX CONTROVERSIES. Subject to the cooperation provisions of Section 4.1, the Director of Taxes will have full responsibility and discretion in the handling of and concluding settlements for any Tax controversy, including, without limitation, an audit, a protest to the Appeals Division of the IRS, and litigation in Tax Court or any other court or any matter relating to a Final Determination, involving a Tax Return of the Consolidated Group. ARTICLE V MISCELLANEOUS SECTION 5.1. STATE OR LOCAL TAXES. When two or more entities including both (i) NPAL or any of the NPAL Subsidiaries and (ii) any of Entertainment, Television, the Entertainment Subsidiaries or the Television Subsidiaries file combined, consolidated or unitary state or local Tax Returns in one or more jurisdictions, the general principles of this Agreement pertaining to, but not limited to, the Director of Taxes' responsibility and discretion for final reporting positions, elections and disclosures in such returns, the allocation of tax charges and benefits, the authority over and the manner in dealing with adjustments subsequent to filing of any Tax Returns and any settlements of amounts due, will govern such combined, consolidated or unitary state or local income Tax Returns -11- with equal force and effect. The decision to file on a combined, consolidated or unitary basis in any jurisdiction will be made by the Director of Taxes, provided however, that to the extent third Party consents are required no such combined, consolidated or unitary filing shall be made until such consents are provided. SECTION 5.2. TERMINATION. In the event any Party ceases to be a Member of the Consolidated Group or ceases to be included in any combined, consolidated or unitary group filing state or local Tax Returns which includes NPAL or any of the NPAL subsidiaries for any reason whatsoever, this Agreement will be terminated as to such Party, except that the obligations of all the Parties will remain in full force and effect with respect to: (a) any period of time during the taxable year in which the termination occurs for which the income of the terminating Member was included in the Consolidated Group Return, (b) for any Consolidated Group Return tax year in which a Member was an includible corporation and for which an adjustment has been made as described in Section 3.4 of this Agreement and (c) similar state and local tax matters, if relevant, under Section 5.1 SECTION 5.3. DISPUTE RESOLUTION. Any disagreements between the Director of Taxes and any Party to this Agreement as to the meaning, interpretation, application or enforceability of any provision of this Agreement will be reviewed by NPAL's Chief Financial Officer. If any disagreement remains after any such review, that disagreement will be resolved by the Audit Committees of the relevant Parties. SECTION 5.4. SUCCESSORS AND ASSIGNS. A Party's rights and obligations under this Agreement may not be assigned without the prior written consent of the other Parties to this Agreement. This Agreement will be binding upon and inure to the benefit of each Party hereto and their respective successors and permitted assigns. SECTION 5.5. COMPLETE AGREEMENT. This Agreement contains the entire understanding of the Parties hereto with respect to the subject matter contained herein and supersedes all prior agreements of the Parties in connection with such subject matter. No alteration, amendment or modification of any of the terms of this Agreement will be valid unless made by an instrument signed in writing by an authorized officer of each Party hereto. SECTION 5.6. NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit of the Parties to this Agreement and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without this Agreement. SECTION 5.7. LEGAL ENFORCEABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions. Any prohibition or unenforceability of any provision of this Agreement in any jurisdiction will not invalidate or render unenforceable the provision in any other jurisdiction. -12- SECTION 5.8. EXPENSES. Unless otherwise expressly provided in this Agreement each Party will bear any and all expenses that arise from its respective obligations under this Agreement. In the event any Party to this Agreement brings an action or proceeding for the breach or enforcement of this Agreement, the prevailing Party in such action or proceeding, whether or not such action or proceeding proceeds to final judgment, will be entitled to recover as an element of its costs, and not as damages, such reasonable attorneys' fees as may be awarded in the action or proceeding in addition to whatever other relief to which the prevailing Party may be entitled. SECTION 5.9. GOVERNING LAW. This Agreement will be governed by and construed in accordance with the laws of the State of New York. SECTION 5.10. COUNTERPARTS. This Agreement may be executed in several identical counterparts each of which will be deemed an original instrument, but all of such counterparts will constitute but one and the same agreement. SECTION 5.11. PARTIES. NPAL, Entertainment, Television, the Entertainment Subsidiaries, the NPAL subsidiaries and the Television Subsidiaries (herein sometimes referred to collectively as the "Parties") hereto specifically recognize that from time to time other companies may become Members or affiliates of NPAL and hereby agree that such new Members or affiliates shall become Parties to this Agreement by executing the master copy of this Agreement which shall be maintained at NPAL's headquarters. It will not be necessary for all the other Parties to again sign the Agreement but the new Party may simply sign the existing Agreement and it will be effective as if the old Parties had signed again. SECTION 5.12. MODIFICATIONS. Any alteration, modification, addition, deletion, or other change in the consolidated income tax return provisions of the Code as in effect on the Effective Date or regulations shall automatically be applicable to this Agreement mutatis mutandis. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed, all as of the effective date first above set forth. In Witness Whereof; the Parties hereto have caused their names to be subscribed and executed by their respective authorized officers on the dates indicated, effective as of the date first written above. [Dated] News Publishing Australia Limited on its own behalf and on behalf of the NPAL Subsidiaries -13- By: ______________________________________ Fox Entertainment Group, Inc. on its own behalf and on behalf of the Entertainment Subsidiaries By: ______________________________________ Fox Television Holdings, Inc. on its own behalf and on behalf of the Television Subsidiaries By: _____________________________________ -14- EX-10.32 10 AMENDMENT NO. 7 DATED AS OF JUNE 30, 1998 EXHIBIT 10.32 AMENDMENT NO. 7 AMENDMENT NO. 7, dated as of June 8, 1998 (this "Amendment"), to the --------- Credit Agreement, dated as of May 19, 1993 (as amended by Amendment No. 1, dated as of August 9, 1993, Amendment No. 2, dated as of September 14, 1993, Amendment No. 3, dated as of May 12, 1994, Amendment No. 4, dated as of March 30, 1995, Amendment No. 5, dated as of February 29, 1996, and Amendment No. 6, dated as of December 20, 1996, thereto, the "Credit Agreement"), among HarperCollins ---------------- Publishers Inc., a Delaware U.S. corporation, HarperCollins (UK), an English company, News America FSI, Inc., a Delaware, U.S. corporation, News America Incorporated, a Delaware, U.S. corporation (successor by merger to Fox, Inc., successor by merger to News America Publishing Incorporated), News America Publications, Inc., a Delaware, U.S. corporation, Newscorp Investments Limited, an English company, News Securities B.V., a Netherlands corporation, News International plc, an English company, and News Limited, incorporated in South Australia, Australia, each of the Persons listed on the signature pages thereof under the headings "Guarantors", "Arrangers/Managing Agents", "Agents", "Co- Agents", "Lead Managers" and "Banks", respectively, and Citibank, N.A. and Citisecurities Limited, as Administrative Agent/Documentation Agent and Australian Agent, respectively. Unless otherwise defined herein, the capitalized terms defined in the Credit Agreement are used herein as therein defined. SECTION 1. Amendment to the Credit Agreement. The Credit Agreement --------------------------------- is, subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, hereby amended as follows: The definition of "Termination Date" in Section 1.01 is hereby amended by deleting the reference to "June 30, 2002" contained therein and substituting "June 30, 2004". SECTION 2. Conditions to Effectiveness. This Amendment shall become --------------------------- effective when, and only when, the Administrative Agent has received counterparts of this Amendment executed by each Borrower, each Bank and the Administrative Agent, and acknowledged and consented to by each Guarantor. SECTION 3. Representations and Warranties of the Loan Parties. Each -------------------------------------------------- Loan Party represents and warrants as follows: (a) The execution, delivery and performance by each Loan Party of this Amendment are within such Loan Party's corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene such Loan Party's Constitutive Documents, (ii) violate any applicable law, regulation, order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. (b) All authorizations or approvals and other actions by, and all notices to and filings with, any governmental authority or regulatory body or any other third party that are required to be obtained or made by the Loan Parties for the due execution, delivery and performance by any Loan Party of this Amendment have been duly obtained, taken, given or made and are in full force and effect. (c) This Amendment has been duly executed and delivered by each Loan Party party hereto. This Amendment is the legal, valid and binding obligation of each Loan Party hereto, enforceable against such Loan Party in accordance with its terms. (d) Each of the representations and warranties contained in the Credit Agreement is correct after giving effect to this Amendment, other than such representations and warranties that, by their terms, are stated to be true only as of a particular date and no event has occurred and is continuing on the date hereof that constitutes a Default or would constitute a Default after giving effect to this Amendment. SECTION 4. Reference to and Effect on the Credit Agreement. ----------------------------------------------- (a) Upon the effectiveness of Section 1 hereof, on and after the date hereof each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby. (b) Except as specifically amended above, the Credit Agreement is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement. 2 SECTION 5. Execution in Counterparts. This Amendment may be executed ------------------------- in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier or facsimile shall be effective as delivery of a manually executed counterpart of this Amendment. SECTION 6. Governing Law. This Amendment shall be governed by the ------------- internal law of the State of New York. 3 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. BORROWERS: --------- HARPERCOLLINS PUBLISHERS INC. By:__________________________ Name: Title: HARPERCOLLINS (UK) By:__________________________ Name: Title: NEWS AMERICA FSI, INC. By:__________________________ Name: Title: NEWS AMERICA INCORPORATED By:__________________________ Name: Title: NEWS AMERICA PUBLICATIONS, INC. By:___________________________ Name: Title: NEWSCORP INVESTMENTS LIMITED By:__________________________ Name: Title: 4 NEWS INTERNATIONAL plc By:__________________________ Name: Title: NEWS LIMITED (ACN 007871178) By:__________________________ Name: Title: NEWS SECURITIES B.V. By:__________________________ Name: Title: 5 ADMINISTRATIVE AND DOCUMENTATION -------------------------------- AGENT: ----- CITIBANK, N.A. By:__________________________ Name: Title: LENDERS: -------- ABN AMRO BANK, N.V. By:__________________________ Name: Title: BANK OF AMERICA By:__________________________ Name: Title: BANKBOSTON, N.A. By:__________________________ Name: Title: BANQUE NATIONALE DE PARIS By:__________________________ Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE By:__________________________ Name: Title: 6 THE CHASE MANHATTAN BANK By:__________________________ Name: Title: COMMONWEALTH BANK OF AUSTRALIA By:__________________________ Name: Title: CREDIT LYONNAIS By:__________________________ Name: Title: CREDIT SUISSE FIRST BOSTON By:__________________________ Name: Title: FLEET NATIONAL BANK By:__________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By:__________________________ Name: Title: LLOYDS BANK plc By:__________________________ Name: Title: 7 MELLON BANK, N.A. By:__________________________ Name: Title: MIDLAND BANK plc By:__________________________ Name: Title: NATIONAL AUSTRALIA BANK LIMITED By:__________________________ Name: Title: NATIONSBANK By:__________________________ Name: Title: SOCIETE GENERALE By:__________________________ Name: Title: THE BANK OF NEW YORK By:__________________________ Name: Title: THE BANK OF NOVA SCOTIA By:__________________________ Name: Title: 8 THE INDUSTRIAL BANK OF JAPAN, LIMITED By:__________________________ Name: Title: TORONTO DOMINION BANK TD Securities (USA) Inc. By:__________________________ Name: Title: WESTPAC BANKING CORPORATION By:__________________________ Name: Title: DEUTSCHE BANK A.G. NEW YORK AND/OR CAYMAN ISLANDS BRANCHES By:__________________________ Name: Title: 9 CONSENT Dated as of June 8, 1998 Each of the undersigned as a Guarantor under the Credit Agreement referred to in the foregoing Amendment hereby consents to the said Amendment and hereby confirms and agrees that the Credit Agreement is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that, upon the effectiveness of, and on and after the date of, the said Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "thereunder", "thereof" or words of like import shall mean and be a reference to the Credit Agreement as amended by said Amendment. This Consent may be executed in any number of counterparts each of which, when executed and delivered, shall constitute an original, but all executed counterparts together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Consent by telecopier shall be effective as delivery of a manually executed counterpart of this Consent. FOX BROADCASTING COMPANY By:__________________________ Name: Title: FOX TELEVISION STATIONS, INC. By:_________________________ Name: Title: HARPERCOLLINS PUBLISHERS INC. By:_________________________ Name: Title: 1 HARPERCOLLINS (UK) By:_________________________ Name: Title: THE HERALD AND WEEKLY TIMES LIMITED (ACN004113937) By:__________________________ Name: Title: NATIONWIDE NEWS PTY. LIMITED (ACN 008438828) By:__________________________ Name: Title: NEWS AMERICA FSI, INC. By:__________________________ Name: Title: NEWS AMERICA INCORPORATED By:__________________________ Name: Title: NEWS AMERICA PUBLICATIONS, INC. By:__________________________ Name: Title: 2 THE NEWS CORPORATION LIMITED (ACN 007910330) By:__________________________ Name: Title: NEWSCORP INVESTMENTS LIMITED By:__________________________ Name: Title: NEWSCORP OVERSEAS LIMITED By:__________________________ Name: Title: NEWS GROUP NEWSPAPERS LIMITED By:__________________________ Name: Title: NEWS INTERNATIONAL plc By:__________________________ Name: Title: NEWS LIMITED By:__________________________ Name: Title: NEWS PUBLISHING AUSTRALIA LIMITED By:__________________________ Name: Title: 3 NEWS SECURITIES B.V. By:__________________________ Name: Title: NEWS T INVESTMENTS, INC. By:__________________________ Name: Title: NEWS TRIANGLE FINANCE, INC. By:__________________________ Name: Title: TWENTIETH CENTURY FOX FILM CORPORATION By:__________________________ Name: Title: TWENTIETH CENTURY FOX HOME ENTERTAINMENT, INC. By:__________________________ Name: Title: TWENTIETH HOLDINGS CORPORATION By:__________________________ Name: Title: 4 EX-21.1 11 LIST OF PRINCIPAL SUBSIDIARIES OF THE COMPANY
EXHIBIT 21 Company Country/State of Incorporation - ------------------------------------------------------------------------- 19th Holdings Corporation Delaware Affiliated Regional Communications, Ltd. Colorado Aktiebolaget Fox Film Sweden Ameristar Music Publishing Co. California ARC Holding, Ltd. Baa1 Productions, Inc. Cayman Islands Baja Holdings, Inc. Delaware Baja Studios, Inc. Delaware BB Fit Holdings, LLC Delaware Because He Can Productions, Inc. Delaware Blackstar, L.L.C. Delaware Blue Sky Studios, Inc. Delaware Camp Management Incorporated, S.A. Dominican Rep. Cannell Entertainment, Inc. Delaware Cannell Production Services Inc. Canada CBS/Fox French Film Licensing Corporation New York Centfox Film, GES.m.b.H. Austria Cinemascope Products Inc. Delaware Constance Music, Inc. California Culverton Limited Ireland D.A.W. Productions, Inc. Delaware Deluxe Laboratories Film Storage, Inc. New Jersey DF Investment, Corp. Delaware Digital Leaseholds, Inc. Delaware Dobsong Music Corp. California Dodgertown, Inc. Florida Drive-In Cinemas Limited Kenya Echoes in the Darkness Production, Inc. Canada EFL Licencing, Inc. Delaware Emmett Street Films, Inc. Delaware Evergreen Television Productions, Inc. Delaware FA Productions, Inc. Delaware FBC Sub, Inc. Delaware Fit TV Partnership Delaware Fit TV Holdings, LLC Delaware FLN Finance, Inc. Delaware Four Star Entertainment Corp. I, Inc. Delaware Four Star International, Inc. California Fourtel Music Publishing Co. California Fox Animation Los Angeles, Inc. Delaware Fox Animation Studios, Inc. Delaware Fox Baseball Holdings, Inc. Delaware Fox Basketball Holdings, LLC Delaware Fox Broadcasting Company Delaware Fox Broadcasting Sub, Inc. Delaware Fox Broadcast Music, Inc. Delaware Fox Center Productions, Inc. Delaware Fox Circle Productions Inc. Delaware Fox/Col Film Distributors, Inc. Panama Fox Daytime Prods., Inc. Delaware Fox Development Group, Inc. Delaware Fox East Productions, Inc. Delaware Fox Film De Cuba S.A. Cuba Fox Film de la Argentina S.A. Argentina Foxfilmes Limitada Portugal Fox Film Music Corporation Delaware Fox/Guild Home Entertainment Ltd. UK Fox Hockey Holdings, LLC Delaware Fox Home Entertainment Ltd. UK Fox Interactive, Inc. Delaware Fox Interactive Ltd. UK Fox Interamericana S.A. Mexico Fox International Equity, Inc. Delaware Fox International, Inc. Delaware Fox Japan Movie Channels, Inc. Delaware Fox Japan Television Programing Services, Inc. Delaware Foxlab, Inc. Delaware Fox Lane Productions, Inc. Delaware Fox LAPTV L.L.C. Delaware Fox Latin America Cable, Inc. Cayman Islands Fox Latin American Channel, Inc. Delaware Fox Latin America, Inc. Cayman Islands Fox/Liberty Ad Sales, LLC Delaware Fox/Liberty Bay Area, LLC Delaware Fox/Liberty Chicago, LLC Delaware Fox/Liberty CNS, LLC Delaware Fox/Liberty Host, LLC Delaware Fox/Liberty Network, L.L.C. Delaware Fox/Liberty Network Sales, Inc. Delaware Fox/Liberty OLN, LLC Delaware Fox/Liberty Sportscom, LLC Delaware Fox/Liberty SV, LLC Delaware Fox/Liberty Ventures, LLC Delaware Fox/Liberty West II LLC Delaware Fox Motion Picture Venture No. 1, Inc. Delaware Fox Movietonews, Inc. Delaware Fox Music, Inc. Delaware Fox Net, Inc. Delaware Fox News Holdings, Inc. Delaware Fox News, Inc. Delaware Fox News Network, L.L.C. Delaware Fox News Production, Inc. Delaware Fox News Service, Inc. Delaware Fox Nitetime Prods., Inc. Delaware Fox On Air Music, Inc. Delaware Fox Pay - Per - View Services, Inc. Delaware Fox Records, Inc. Delaware Fox Regional Sports Holdings, Inc. Delaware Fox Regional Sports Member, Inc. Delaware Fox Searchlight Pictures, Inc. Delaware Fox Services, Inc. Delaware Fox Software, Inc. Delaware Fox Sports Ad Sales Holdings, LLC Delaware Fox Sports Detroit, LLC Delaware Fox Sports International Equity, LLC Delaware Fox Sports Latin America LLC Delaware Fox Sports National Holdings, LLC Delaware Fox Sports Net Baseball, LLC Delaware Fox Sports Net, LLC Delaware Fox Sports Productions, Inc. Delaware Fox Sports RPP Holdings, LLC Delaware Fox/Sports TMG, LLC Delaware
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Company Country/State of Incorporation - ------------------------------------------------------------------------- Fox Sports World, LLC Delaware Fox Sports World Middle East, LLC Delaware Fox Square Productions, Inc. Delaware Fox Square Productions (Canada), Inc. Delaware FoxStar Productions, Inc. Delaware Fox Studios East, Inc. Delaware Fox Television Stations, Inc. Delaware Fox Televisions Stations of Birmingham, Inc. Delaware Fox Television Stations of Philadelphia, Inc. Delaware Fox Television Stations Productions, Inc. Delaware Fox Television Studios Productions, Inc. Delaware Fox Tunes, Inc. Delaware Fox Transactional TV, Inc. Delaware Fox TV10 Holdings, Inc. Delaware Fox TV 10 Holdings, LLC Delaware Fox Video International Corporation Delaware Foxwatch Productions, Inc. Delaware Fox West Pictures, Inc. Delaware Fox West Sports Member, Inc. Delaware FoxVideo International Distribution, Inc. Delaware FoxVideo International SARL France FoxVideo Limited UK FoxVideo New Zealand Limited New Zealand FoxView, Inc. Delaware FRT Productions, Inc. Delaware FSO Productions, Inc. Delaware FST Advertising, Inc. Delaware FTS Boston, Inc. Delaware FTS Investments, Inc. Delaware FTS North Carolina, Inc. Delaware FTS Philadelphia, Inc. Delaware FWA Productions, Inc. Delaware fX Holdings, Inc. Delaware fXM Networks, Inc. Delaware fX Networks, LLC Delaware Galaxy Way Productions, Inc. Delaware Galileo Productions, Inc. Delaware GATV Productions, Inc. Delaware Genesis Video Entertainment, Inc. Illinois Giant Bowling Pin Productions, Inc. Delaware Glen Avenue Films, Inc. Delaware Gold Key Entertainment Inc. Delaware Gone Fission, Inc. Delaware Greenleaves Productions, Inc. Delaware GTH-103, Inc. Ohio Guthy-Renker Holding Corporation Delaware Harmon Cove Productions Inc. California Highgate Pictures, Inc. Delaware Highgate Productions Inc Delaware Hispano Fox Film S.A.E. Spain Janpra Productions, Inc. Delaware Junior High Productions, Inc. California KDFW License, Inc. Nevada KDFW Television, Inc. Nevada KNSD License, Inc. Delaware KSAZ License, Inc. Delaware KSAZ Television Inc. Delaware KTBC License, Inc. Nevada KTBC Television, Inc. Nevada KTVI License, Inc. Nevada KTVI Television, Inc. Nevada LAPTV A Corporation Delaware LAPTV B Corporation Delaware L.C. Holding Corp. Delaware Leap Off Productions, Inc. Delaware Learning Corporation of America Delaware Learning Corporation of America Films, Inc. Delaware Les Productions Fox Europa S.A. France Liberty/Fox ARC L.P. Delaware Liberty/Fox Arizona LLC Delaware Liberty/Fox Canada LLC Delaware Liberty/Fox Distribution L.P. Delaware Liberty/Fox KBL L.P. Delaware Liberty/Fox Network Programming, LLC Delaware Liberty/Fox Northwest L.P. Delaware Liberty/Fox Southeast LLC Delaware Liberty/Fox Sports Financing LLC Delaware Liberty/Fox Sunshine LLC Delaware Liberty/Fox Upper Midwest L.P. Delaware Liberty/Fox Utah LLC Delaware Liberty/Fox West LLC Delaware Library Holdings, Inc. Delaware Lookalike Productions, Inc. Delaware Looks At Productions, Inc. Delaware Los Angeles Dodgers, Inc. Delaware Marvel Music Group, Inc. Delaware Mid-Atlantic Sports Network, L.L.C. Delaware Mighty Marvel Music Corporation Delaware Mirror Pictures Corporation Delaware Monet Lane Prods. Inc. Delaware Movietonews Inc. New York Moving Target Productions, Inc. California MT Services, Inc. California MT 2 Services, Inc. California MT 3 Services, Inc. California MT 4 Services, Inc. California MVP Video Productions Inc. Delaware NA Property Holdings, Inc. Delaware National Sports Productions, LLC Delaware National Studios, Inc. Delaware Natural History Limited New Zealand Netherlands Fox Film Corporation B.V. Netherlands News Broadcasting Japan K.K. Japan Newscorp Finance Limited Cayman Islands News Germany Holding G.m.b.H. Germany News Preferred Finance, Inc. Delaware New World Administration California New World Animation Ltd. Delaware New World Communication Group, Incorporated Delaware New World Communications of Atlanta, Inc. Delaware New World Communications of Detroit, Inc. Delaware New World Communications of Kansas City, Inc. Delaware New World Communications of Milwaukee, Inc. Delaware New World Communications of Ohio, Inc. Delaware New World Communications of St. Louis, Inc. Delaware
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Company Country/State of Incorporation - ------------------------------------------------------------------------- New World Communications of Tampa, Inc. Delaware New World Distribution, Inc. California New World Entertainment Ltd. Delaware New World/Genesis Distribution California New World International (Australia) Ltd California New World Knowledge, Inc. Delaware New World Licensing, Inc. California New World Music Publishing Corporation California New World Pictures, Ltd. Delaware New World Song, Inc. California New World Television Incorporated Delaware New World Television Productions, Inc. California New World Television Programming California New World Television (NWT) France S.A.R.L. France New World Video California NF Productions, Inc. Delaware Northgate Productions, Inc. Delaware NWC Acquisition Corporation Delaware NWCG Holdings Corporation Delaware NWC Holdings Corporation Delaware NWC Intermediate Holdings Corporation Delaware NWC Management Corporation Delaware NW Communications of Austin, Inc. Texas NW Communications of Phoenix, Inc. Delaware NW Communications of San Diego, Inc. Delaware NW Communications of Texas, Inc. Texas NWC Sub I Holdings Corporation Delaware NWC Sub II Holdings Corporation Delaware NWE Acquisition Inc. Delaware NWE Holdings Corporation Delaware NWE Sub I Incorporated Delaware NW Management Incorporated Delaware NW Programs Incorporated Delaware NWTV Intermediate Holdings Corporation Delaware O/Y Fox Film A/B Finland Panoramic Productions Inc. California Pico Films, Inc. Delaware Plaid Jacket Productions, Inc. California President Video Ltd. UK Prime Network LLC Wyoming Prime Philadelphia Sports LLC Wyoming Prime Sports Northwest Network California Prime Sports West, L.P. California Prime Ticket Networks, L.P. Delaware Prime Time Media, Inc. Delaware Professional Sports Services, LLC Delaware P&T Productions, Inc. California Rags Productions Inc. California Repaca, Inc. Delaware Rewind Music, Inc. Delaware Rock Ledge Limited Ireland Rocky Mountain Prime Sports Network, GP Colorado Rugged Limited Bermuda Schrodinger's Cat Productions, Inc. Delaware SCI Merger Sub, Incorporated Delaware SCI Subsidiary Corporation Delaware SCI Sub I Incorporated Delaware SCPI, Inc. Delaware SC Productions, Inc. Delaware SESLA, Inc. Delaware Shadow in the Sun U.S.A. California Shoot the Horse Productions, Inc. Delaware Sky Entertainment Programming Latin America, LLC Delaware Latin America, LLC Delaware Sky Latin America, L.L.C. Delaware Small Cages Productions, Inc. Delaware SportsChannel Bay Area Associates, GP New York SportsChannel Chicago Associates, GP New York SportsSouth Holdings, LLC Delaware SportSouth Network, LLC Delaware Sprocket Music, Inc. Delaware STF Productions, Inc. Delaware Storymakers, Inc. Delaware Strange World Productions, Inc. Delaware Stronghold, Inc. California Studios de la Playa, S.A. de C.V. Mexico Sunshine Network Florida TCF Bookworm Productions Delaware TCF Canadian TV Enterprises, Inc. California TCFC Film Distribution Company, B.V. Netherlands TCF Digital Holdings, Inc. Delaware TCF Distributing, Inc. California TCF Music Publishing, Inc. Delaware TCF Speed II Productions, Inc. Delaware TCFTV Canadian Productions Inc. Delaware TCFTV Canadian Services, Inc. Delaware TCFTV CanPro, Inc. Delaware The British Movietonews Ltd. UK The Fox Store, Inc. Delaware The Greenblatt Janollai Studios, Inc. Delaware Tour of Duty Productions, Inc. California TV 10 Holdings, LLC Delaware TVF Productions, Inc. Delaware TVF II Productions, Inc. Delaware TVM Productions, Inc. Delaware TVP Productions, Inc. Delaware TVT License, Inc. Delaware Twentieth Century Fox Asia Pacific Telecommunications, LLC Delaware Twentieth Century Fox Asia Pacific Television L.L.C. Delaware Twentieth Century Fox Asia Pacific Theatrical L.L.C. Delaware Twentieth Century Fox/Astral Television Distribution Limited Canada Twentieth Century Fox Canada Limited Canada Twentieth Century Fox Chile, Inc. Delaware Twentieth Century Fox Delaware Columbia Tristar (Switzerland) S.A. Switzerland Twentieth Century Fox Distributing Corporation Delaware
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Company Country/State of Incorporation - ------------------------------------------------------------------------- Twentieth Century Fox (Far East), Inc. New York Twentieth Century Fox Federal, Inc. U.S.A. Chinese Trade Act Twentieth Century Fox Film Belge S.A. Belgium Twentieth Century Fox Film Company (Export) Limited UK Twentieth Century Fox Film Company Limited UK Twentieth Century Fox Film Corporation Delaware Twentieth Century Fox Film Corporation (Australia) Pty. Ltd. Australia Twentieth Century Fox Film de Mexico, S.A. Mexico Twentieth Century Fox Film Corporation Delaware Pty. Ltd. Australia Twentieth Century Fox Film Distributors Hellass SARL Greece Twentieth Century Fox Film (East) Private Limited Singapore Twentieth Century Fox Film (Malaya) Sendirian Berhad Malaysia Twentieth Century Fox Film S.A. Panama Twentieth Century Fox France, Inc. Delaware Twentieth Century Fox Home Entertainment Asia Pacific LLC Delaware Twentieth Century Fox Home Entertainment (Australia) Pty. Limited Australia Twentieth Century Fox Home Entertainment Benelux B.V. Netherlands Twentieth Century Fox Home Entertainment Canada Limited Canada Twentieth Century Fox Home Entertainment Espana S.A. Spain Twentieth Century Fox Home Entertainment France S.A. France Twentieth Century Fox Home Entertainment Germany, G.m.b.H. Germany Twentieth Century Fox Home Entertainment, Inc. Michigan Twentieth Century Fox Home Entertainment Italia SpA Italy Twentieth Century Fox Home Entertainment Japan K.K. Japan Twentieth Century Fox Home Entertainment Korea, Inc. Korea Twentieth Century Fox Home Entertainment Latin America, (Cayman Islands) Cayman Islands Twentieth Century Fox Home Entertainment Limited UK Twentieth Century Fox Home Entertainment Mexico, S.A. de C.V. Mexico Twentieth Century Fox Home Entertainment Middle East, Inc. Delaware Twentieth Century Fox Home Entertainment South Pacific Pty. Limited Australia Twentieth Century Fox Hong Kong, Inc. Delaware Twentieth Century Fox Import Corporation New York Twentieth Century Fox, Inc. U.S.A. (Taiwan) Delaware Twentieth Century Fox India, Inc. Delaware Twentieth Century Fox Inter-America Inc. New York Twentieth Century Fox International Corporation New York Twentieth Century Fox International Limited UK Twentieth Century Fox International Telecommunications Distribution. Inc. Delaware Twentieth Century Fox International Television Inc. New York Twentieth Century Fox International Television Distribution Inc. Delaware Twentieth Century Fox International Theatrical Distribution, Inc. Delaware Twentieth Century Fox Italy S.p.A., Inc. Delaware; Italy Twentieth Century Fox Korea, Inc. Korea Twentieth Century Fox Licensing & Merchandising Limited UK Twentieth Century Fox Latin America Telecommunications, Inc. (Cayman) Cayman Islands Twentieth Century Fox Latin America Television, Inc. Cayman Islands Twentieth Century Fox Latin America Theatrical, Inc. (Cayman) Cayman Islands Twentieth Century Fox of Germany GmbH Germany Twentieth Century Fox Pakistan, Inc. Delaware Twentieth Century Fox Peruana S.A. Peru Twentieth Century Fox Productions Limited UK Twentieth Century Fox Puerto Rico, Inc. Puerto Rico Twentieth Century Fox Studio Club Inc. California
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Company Country/State of Incorporation - ------------------------------------------------------------------------- Twentieth Century Fox Telecommunications International, Inc. Delaware Twentieth Century Fox Television Limited UK Twentieth Century Fox Thailand, Inc. New York Twentieth Century Fox Titanic Productions, Inc. California Twentieth Century Fox Trinidad Limited Trinidad Twentieth Century Fox Worldwide Productions, Inc. Delaware Twentieth Television, Inc. Delaware Upper Midwest Cable Partners Van Ness Films, Inc. Delaware Ventures Arena, LLC Delaware Ventures Basketball, LLC Delaware Ventures Hockey, LLC Delaware Venue Merchandising, Inc. California Very Imaginative Pictures, Inc. California VNE, Inc. California Vox Filmworks (Canada), Inc. Canada WAGA License, Inc. Delaware WBRC and WGHP Holdings Corporation Delaware WBRC License, Inc. Delaware WDAF License, Inc. Delaware WDAF Television Inc. Delaware Wedron Silica Company Delaware West End Circle Studios Inc. Delaware Westgate Productions, Inc. Delaware WFXT, Inc. Delaware WGHP and WBRC Television Corporation Delaware WGHP License, Inc. Delaware WITI License, Inc. Delaware WJBK License, Inc. Delaware WJW License, Inc. Delaware World League Licensing, L.L.C. Delaware World League of American Football, L.L.C. Delaware World League of American Football II, L.L.C. Delaware X-F Productions, Inc. Delaware
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