SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 24, 1996
(Date of earliest event reported)
NEW WORLD COMMUNICATIONS GROUP INCORPORATED
(Exact name of Registrant as specified in its charter)
Delaware 0-23592 13-3743606
(State ofIncorporation (Commission File No.) (IRS Employer
Identification No.)
3200 Windy Hill Road, Suite 1100-West, Atlanta, Georgia 30339
(Address of principal executive offices, including zip code)
(770) 955-0045
(Registrant's telephone number, including area code)
____________________________________________________
(Former name or former address, if changed since last report)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
New World Communications Group Incorporated, a Delaware
corporation (the "Company"), NWCG (Parent) Holdings Corporation,
a Delaware corporation ("NWCGP"), NWCG Holdings Corporation, a
Delaware corporation and a subsidiary of NWCGP ("NWCG Holdings"),
and The News Corporation Limited, a South Australia corporation
("News Corp."), entered into a binding Memorandum of
Understanding, dated as of July 17, 1996 (the "Memorandum of
Understanding"), pursuant to which News Corp. agreed to acquire
the Company. The Memorandum of Understanding provides that the
parties thereto may execute definitive agreements to consummate
the transactions contemplated by the Memorandum of Understanding.
On September 24, 1996, the parties entered into definitive
agreements in furtherance of the transactions contemplated by the
Memorandum of Understanding.
The Agreement and Plan of Merger, dated as of September
24, 1996, by and among the Company, News Corp., Fox Television
Stations, Inc., a Delaware corporation in which News Corp. owns
an indirect interest ("Fox"), and Fox Acquisition Co., Inc., a
Delaware corporation and a wholly owned subsidiary of Fox
("Merger Sub"), provides, among other things, that Merger Sub
will be merged with and into the Company (the "Merger") with the
result that (a) the Company will become a wholly owned subsidiary
of Fox; (b) each issued and outstanding share of the Company's
Class A Common Stock, par value $.01 per share (the "Class A
Common Stock") (other than any shares owned, directly or
indirectly, by News Corp., Merger Sub or any other News Corp.
Subsidiary (as such term is defined in the Merger Agreement)),
will be converted into the right to receive 1.45 Preferred
American Depositary Shares ("ADSs") of News Corp., each of which
represents four fully paid and non-assessable Preferred Limited
Voting Ordinary Shares, par value A$0.50 per share, of News
Corp.; (c) each issued and outstanding share of the Company's
Class B Common Stock, par value $.01 per share (the "Class B
Common Stock") (other than any shares owned, directly or
indirectly, by News Corp., Merger Sub or any other News Corp.
Subsidiary and any shares as to which dissenters' rights are
properly exercised), will be converted into the right to receive
1.45 ADSs; (d) if the Series A Approval (as defined below) is
obtained, each issued and outstanding share of the Company's
6.375% Cumulative Redeemable Preferred Stock, Series A, par value
$.01 per share (the "Series A Preferred Stock") (other than any
shares owned, directly or indirectly, by News Corp., Merger Sub
or any other News Corp. Subsidiary and any shares as to which
dissenters' rights are properly exercised) will be converted into
the right to receive the number of ADSs equal to the product of
(i) 1.45 and (ii) the number of shares of Class B Common Stock
that a holder of such share of Series A Preferred Stock would
have received if such share of Series A Preferred Stock had been
converted into shares of Class B Common Stock immediately prior
to the time (the "Effective Time") the certificate of merger
relating to the Merger becomes effective under the Delaware
General Corporation Law; and (e) if the Series E Approval (as
defined below) is obtained, each outstanding share of the
Company's Series E Cumulative Convertible Redeemable Preferred
Stock, par value $.01 per share (the "Series E Preferred Stock")
(other than any shares owned, directly or indirectly, by News
Corp., Merger Sub or any other News Corp. Subsidiary and any
shares as to which dissenters' rights are properly exercised)
will be converted into the right to receive the number of ADSs
equal to the product of (i) 1.45 and (ii) the number of shares of
Class A Common Stock that a holder of such share of Series E
Preferred Stock would receive upon conversion of such share of
Series E Preferred Stock immediately prior to the Effective Time.
News Corp. and Fox have also entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated as of September
24, 1996, with NWCGP, an affiliate of Ronald O. Perelman, the
Chairman of the Company's Board of Directors, pursuant to which,
immediately prior to the Effective Time, Fox will purchase from
NWCGP, 2,682,236 shares of Class B Common Stock owned by NWCGP
and all of the outstanding capital stock of NWCG Holdings, which
owns an aggregate of 34,510,000 shares of Class B Common Stock.
Any shares of Common Stock, Series A Preferred Stock or Series E
Preferred Stock owned, directly or indirectly, by News Corp.,
Merger Sub or any other News Corp. Subsidiary at the Effective
Time, including the shares purchased pursuant to the Stock
Purchase Agreement, will remain outstanding after the Merger.
Approval of the Merger requires the affirmative vote of
at least a majority of the voting power of the Class A Common
Stock and the Class B Common Stock, voting together as a single
class. Each outstanding share of Class A Common Stock is
entitled to one vote and each outstanding share of Class B Common
Stock is entitled to ten votes on the proposal to approve and
adopt the Merger Agreement. The affirmative vote of holders of
Series A Preferred Stock or Series E Preferred Stock is not
required for approval of the Merger. However, conversion of
shares of Series A Preferred Stock and shares of Series E
Preferred Stock into ADSs pursuant to the Merger Agreement
requires the vote of a majority of the outstanding shares of
Series A Preferred Stock (the "Series A Approval") and the Series
E Preferred Stock (the "Series E Approval"), respectively. In
the event that the Series A Approval or the Series E Approval is
not obtained, the shares of Series A Preferred stock or the
shares of Series E Preferred Stock, as the case may be, will not
be converted into ADSs pursuant to the Merger Agreement and will
remain outstanding as shares of preferred stock of the surviving
corporation in the Merger and will thereafter be convertible into
the right to receive the number of ADSs determined in accordance
with the terms of such series of preferred stock based on the
exchange ratio for the Merger.
NWCGP and NWCG Holdings have entered into a Voting
Agreement, dated as of September 24, 1996, with Fox (the "NWCG
Parent Voting Agreement"), pursuant to which NWCGP and NWCG
Holdings have agreed to vote all of the shares of Class B Common
Stock owned by them in favor of the Merger. Accordingly,
approval of the Merger is assured regardless of the vote of any
other stockholder of the Company. In addition, pursuant to a
Voting Agreement, dated as of September 24, 1996, among Apollo
Advisors L.P. ("Apollo"), News Corp. and Fox (the "Apollo Voting
Agreement"), Apollo agreed, with respect to itself and its
affiliates, as the sole holder of the issued and outstanding
shares of Series A Preferred Stock, to vote, or cause to be
voted, any shares of NWCG capital stock owned as of the Record
Date for the Merger Proposal and the Charter Proposal.
News Corp., Fox and affiliates of NWCGP have also
entered into certain other agreements in connection with the
transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(c) Exhibits
2.1 Memorandum of Understanding among the Company,
NWCGP, NWCG Holdings and News Corp., dated as
of July 17, 1996.(1)
2.2 Agreement and Plan of Merger, dated as of
September 24, 1996, by and among the Company,
News Corp. Fox and Merger Sub.
2.3 Stock Purchase Agreement, dated as of September
24, 1996, by and among NWCGP, News Corp. and
Fox.
10.1 Voting Agreement, dated as of September 24,
1996, among Fox, NWCGP and NWCG Holdings.
10.2 Voting Agreement, dated as of September 24,
1996, among Fox, News Corp. and Apollo.
10.3 Guaranty, dated as of September 24, 1996,
entered into by News Corp. in favor of the
Guaranteed Parties named therein.
10.4 Guaranty, dated as of September 24, 1996,
entered into by Mafco Holdings Inc., a Delaware
corporation ("Mafco"), in favor of News Corp.
and Fox.
--------
(1) Incorporated by reference from the Company's Form 8-K dated
July 17, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
NEW WORLD COMMUNICATIONS
GROUP INCORPORATED
By: /s/ Joseph P. Page
Joseph P. Page
Executive Vice President
and Chief Financial Officer
Date: October 4, 1996
EXHIBIT INDEX
Exhibit
Number Exhibit
2.1 Memorandum of Understanding among the Company,
NWCGP, NWCG Holdings and News Corp., dated as of
July 17, 1996.(1)
2.2 Agreement and Plan of Merger, dated as of September
24, 1996, by and among the Company, News Corp. Fox
and Merger Sub.
2.3 Stock Purchase Agreement, dated as of September 24,
1996, by and among NWCGP, News Corp. and Fox.
10.1 Voting Agreement, dated as of September 24, 1996,
among Fox, NWCGP and NWCG Holdings.
10.2 Voting Agreement, dated as of September 24, 1996,
among Fox, News Corp. and Apollo.
10.3 Guaranty, dated as of September 24, 1996, entered
into by News Corp. in favor of the Guaranteed
Parties named therein.
10.4 Guaranty, dated as of September 24, 1996, entered
into by Mafco, in favor of News Corp. and Fox.
--------
(1) Incorporated by reference from the Company's Form
8-K dated July 17, 1996.
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 24, 1996
BY AND AMONG
THE NEWS CORPORATION
LIMITED,
FOX TELEVISION STATIONS, INC.,
FOX ACQUISITION CO., INC.
AND
NEW WORLD COMMUNICATIONS
GROUP INCORPORATED
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER
Section 1.1 The Merger . . . . . . . . . . . 2
Section 1.2 Effective Time of the Merger . . 2
Section 1.3 Closing . . . . . . . . . . . . . 2
Section 1.4 Effects of the Merger . . . . . . 3
Section 1.5 Certificate of Incorporation and
By-Laws . . . . . . . . . . . . 3
Section 1.6 Directors . . . . . . . . . . . . 3
Section 1.7 Officers . . . . . . . . . . . . 3
ARTICLE II CONVERSION OF SHARES
Section 2.1 Conversion of Capital Stock . . . 4
Section 2.2 Exchange of Certificates . . . 10
Section 2.3 Closing of Transfer Books. . . . 14
ARTICLE III REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Section 3.1 Organization and
Qualifications;
Subsidiaries . . . . . . . . . . 14
Section 3.2 Capitalization . . . . . . . . . 15
Section 3.3 Authority Relative to This
Agreement . . . . . . . . . . . . 17
Section 3.4 No Conflict; Required Filings and
Consents; Certain Contracts . . . 17
Section 3.5 SEC Reports and Financial
Statements. . . . . . . . . . . . 19
Section 3.6 Absence of Certain Changes or
Events. . . . . . . . . . . . . . 20
Section 3.7 Taxes . . . . . . . . . . . . . . 20
Section 3.8 Employee Benefit Plans. . . . . . 22
Section 3.9 Litigation . . . . . . . . . . . 23
Section 3.10 Registration Statement and Proxy
Statement/Prospectus. . . . . . . 24
Section 3.11 NBC Agreements . . . . . . . . . 24
Section 3.12 Opinion of Financial Advisor. . . 25
Section 3.13 Brokers . . . . . . . . . . . . . 25
ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF NEWS CORP.
Section 4.1 Organization and Qualifications;
Subsidiaries . . . . . . . . . . 25
Section 4.2 Capitalization . . . . . . . . . 26
Section 4.3 Validity of News Corp. Preferred
Stock and News Corp. Preferred
ADRs . . . . . . . . . . . . . . 27
Section 4.4 Authority Relative to This
Agreement . . . . . . . . . . . . 28
Section 4.5 No Conflict; Required Filings and
Consents . . . . . . . . . . . . 29
Section 4.6 SEC Reports and Financial
Statements. . . . . . . . . . . . 30
Section 4.7 Absence of Certain Changes or
Events . . . . . . . . . . . . . 31
Section 4.8 Litigation . . . . . . . . . . . 31
Section 4.9 Registration Statement and Proxy
Statement/Prospectus. . . . . . 32
Section 4.10 FCC Qualification . . . . . . . . 32
Section 4.11 Brokers . . . . . . . . . . . . . 32
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business of the Company
Pending the Merger . . . . . . . 33
Section 5.2 Conduct of Business of News Corp.
and Fox Pending the Merger . . . 36
ARTICLE VI ADDITIONAL COVENANTS
Section 6.1 Governmental Approvals . . . . . 37
Section 6.2 Access to Information . . . . . . 38
Section 6.3 Further Action; Reasonable
Efforts . . . . . . . . . . . . 38
Section 6.4 Public Announcements . . . . . . 39
Section 6.5 Directors' and Officers'
Indemnification and Insurance . . 39
Section 6.6 Notification of Certain Matters . 40
Section 6.7 Stockholder Meeting . . . . . . . 41
Section 6.8 Registration Statement, Proxy
Statement/Prospectus . . . . . . 41
Section 6.9 Blue Sky . . . . . . . . . . . . 42
Section 6.10 NYSE; ASX . . . . . . . . . . . . 42
Section 6.11 Indemnification with Respect to
the Registration Statement . . . 43
Section 6.12 Employee Benefits . . . . . . . . 44
Section 6.13 Registration Rights Agreement . . 45
Section 6.14 Affiliates . . . . . . . . . . . 45
Section 6.15 WARN Act . . . . . . . . . . . . 45
Section 6.16 Fox Agreements . . . . . . . . . 46
Section 6.17 Settlement of Accounts . . . . . 46
Section 6.18 Sovereign Immunity . . . . . . . 46
Section 6.19 Certain Tax Matters . . . . . . . 46
ARTICLE VII CONDITIONS TO THE MERGER
Section 7.1 Conditions to Each Party's Obli-
gation to Effect the Merger . . . 46
Section 7.2 Conditions to Obligations of the
Company to Effect the Merger . . 47
Section 7.3 Conditions to Obligations of Fox
and Merger Sub to Effect the
Merger . . . . . . . . . . . . . 48
ARTICLE VIII TERMINATION, WAIVER,
AMENDMENT AND CLOSING
Section 8.1 Termination . . . . . . . . . . . 49
Section 8.2 Amendment or Supplement . . . . . 50
Section 8.3 Extension of Time, Waiver, Etc. . 51
ARTICLE IX MISCELLANEOUS
Section 9.1 No Survival of Representations
and Warranties . . . . . . . . . 51
Section 9.2 Expenses . . . . . . . . . . . . 52
Section 9.3 Counterparts . . . . . . . . . . 52
Section 9.4 Governing Law . . . . . . . . . . 52
Section 9.5 Notices . . . . . . . . . . . . . 53
Section 9.6 Miscellaneous . . . . . . . . . . 54
Section 9.7 Headings . . . . . . . . . . . . 55
Section 9.8 Severability . . . . . . . . . . 55
Section 9.9 Definitions . . . . . . . . . . . 55
EXHIBIT A Form of Affiliate Letter
EXHIBIT B-1 Legal Opinion of Squadron, Ellenoff,
Plesent and Sheinfeld, LLP
EXHIBIT B-2 Legal Opinion of Allen, Allen & Hemsley
EXHIBIT C Legal Opinion of Skadden, Arps, Slate,
Meagher & Flom
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of
September 24, 1996, by and among NEW WORLD COMMUNICATIONS
GROUP INCORPORATED, a Delaware corporation (the
"Company"), THE NEWS CORPORATION LIMITED (ACN 007 910
330), a South Australia corporation ("News Corp."), FOX
TELEVISION STATIONS, INC., a Delaware corporation in
which News Corp. has an indirect interest ("Fox"), and
FOX ACQUISITION CO., INC., a Delaware corporation and a
wholly owned subsidiary of Fox ("Merger Sub").
WHEREAS, it is the intention of the parties
that Merger Sub merge with and into the Company (the
"Merger"), with the Company surviving as a wholly owned
subsidiary of Fox.
WHEREAS, as a condition to the Merger, (a) NWCG
(Parent) Holdings Incorporated, a Delaware corporation
("NWCGP"), will sell to Fox, immediately prior to the
Merger, all of the outstanding shares of capital stock of
NWCG Holdings Corporation, a Delaware corporation
("Holdings"), and all of the shares of capital stock of
the Company owned by NWCGP (the "Stock Purchase"), such
transactions to be effected pursuant to the Stock
Purchase Agreement, dated the date hereof, between News
Corp., Fox and NWCGP (the "Stock Purchase Agreement"),
(b) an affiliate of NWCGP will sell to Fox certain real
property (the "Real Estate Purchase"), such transactions
to be effected pursuant to the Purchase and Sale
Agreement, dated as of the date hereof, between Fox and
1440 Sepulveda Partners, a California limited partnership
(the "Real Estate Purchase Agreement"), and (c) Fox will
assume all obligations under certain promissory notes of
Four Star Holdings Corp., such transactions to be
effected pursuant to agreements between Fox and certain
affiliates of NWCGP.
WHEREAS, the Boards of Directors of News Corp.,
Fox, Merger Sub and the Company have determined that the
transactions contemplated by this Agreement, including,
without limitation, the Merger and the Company Charter
Proposal (as defined in Section 6.7), are advisable and
in the best interest of their respective corporations and
stockholders and have approved this Agreement.
WHEREAS, as a condition to the willingness of
Fox and News Corp. to enter into this Agreement, NWCGP
and Holdings (collectively, the "Principal Stockholder")
and Fox have entered into a Voting Agreement, dated the
date hereof, providing, among other things, that such
Principal Stockholder will vote all of the shares of
capital stock of the Company owned by them in favor of
the Merger, the Charter Proposal and certain related
transactions.
NOW, THEREFORE, in consideration of the mutual
representations, warranties and agreements contained
herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and
subject to the conditions of this Agreement, at the
Effective Time (as defined in Section 1.2), in accordance
with the General Corporation Law of the State of Delaware
(the "DGCL"), Merger Sub shall be merged with and into
the Company in accordance with this Agreement and the
separate existence of Merger Sub shall cease. The
Company shall be the surviving corporation in the Merger
(hereinafter sometimes referred to as the "Surviving
Corporation").
Section 1.2 Effective Time of the Merger.
Upon the terms and subject to the conditions hereof, a
certificate of merger (the "Certificate of Merger") shall
be duly prepared, executed and acknowledged by the
Surviving Corporation and thereafter delivered to the
Secretary of State of the State of Delaware, for filing,
on the Closing Date (as defined in Section 1.3). The
Merger shall become effective as of the date and at such
time as the Certificate of Merger pursuant to Section 251
of the DGCL and any other documents necessary to effect
the Merger in accordance with the DGCL are duly filed
(the "Merger Filing") with the Secretary of State of the
State of Delaware or at such subsequent date or time as
shall be agreed by the Company and Fox and specified in
the Certificate of Merger (the time the Merger becomes
effective pursuant to the DGCL being referred to herein
as the "Effective Time").
Section 1.3 Closing. Subject to the
satisfaction or waiver of all of the conditions to
closing contained in Article VII hereof, the closing of
the Merger (the "Closing") will take place at 10:00 a.m.,
New York City time, on a date to be specified by the
parties, which shall be no later than the fifth Business
Day (as defined below) after the satisfaction or waiver
of the conditions to Closing contained in Article VII, at
the offices of Skadden, Arps, Slate, Meagher & Flom, 919
Third Avenue, New York, New York 10022, unless another
date or place is agreed to in writing by the parties
hereto. The date and time at which the Closing occurs is
referred to herein as the "Closing Date." "Business Day"
shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in New York City are
not required to be open.
Section 1.4 Effects of the Merger. The Merger
shall have the effects set forth in the DGCL. Without
limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company
and Merger Sub shall vest in the Surviving Corporation,
and all debts, liabilities and duties of the Company and
Merger Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
Section 1.5 Certificate of Incorporation and
By-Laws.
(a) The Amended and Restated Certificate
of Incorporation of the Company as in effect immediately
prior to the Effective Time, as amended by the Company
Charter Proposal, shall be the Certificate of
Incorporation of the Surviving Corporation until amended
in accordance with the terms thereof and with applicable
law.
(b) The By-Laws of Merger Sub in effect
at the Effective Time shall be the By-Laws of the
Surviving Corporation until amended in accordance with
the terms thereof and with applicable law.
Section 1.6 Directors. The directors of
Merger Sub at the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold
office from the Effective Time in accordance with the
Certificate of Incorporation and By-Laws of the Surviving
Corporation and until his or her successor is duly
elected and qualified.
Section 1.7 Officers. The officers of Merger
Sub at the Effective Time shall be the initial officers
of the Surviving Corporation, each to hold office from
the Effective Time in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation
and until his or her successor is duly appointed and
qualified.
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Conversion of Capital Stock. As
of the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any
outstanding shares of capital stock of the Company or of
the holder of any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger Subsidiary.
Each issued and outstanding share of common stock, no par
value, of Merger Sub shall be converted into and become
one fully paid and nonassessable share of Class A Common
Stock, par value $.01 per share, of the Surviving
Corporation.
(b) Treasury Stock and News Corp.-Owned
Stock and Warrants. All shares of capital stock of the
Company that are owned by the Company as treasury stock
and any shares of capital stock of the Company owned,
directly or indirectly, by News Corp., Merger Sub or any
other News Corp. Subsidiary (as defined in Section
4.1(a)), including the shares of Series B Junior
Convertible Preferred Stock, par value $.01 per share
(the "Series B Preferred Stock"), of the Company and the
shares of Series C Senior Preferred Stock, par value $.01
per share (the "Series C Preferred Stock"), of the
Company held by a News Corp. Subsidiary and the shares of
Class B Common Stock (as defined below) acquired,
directly or indirectly, by News Corp. or a News Corp.
Subsidiary as a result of the Stock Purchase (including
such shares held by Holdings) shall remain outstanding
and unchanged as a result of the Merger. All Company
Warrants (as defined in Section 3.2) that are owned,
directly or indirectly, by News Corp., Merger Sub or any
other News Corp. Subsidiary shall be cancelled at the
Effective Time, without the payment of any consideration
therefor.
(c) Exchange Ratio for Company Common
Stock. Subject to Section 2.2(e), each issued and
outstanding share of Class A Common Stock, par value $.01
per share (the "Class A Common Stock"), of the Company
(other than shares to be treated in accordance with
Section 2.1(b)) shall be converted into the right to
receive 1.45 (the "Exchange Ratio") American Depositary
Shares of News Corp. (the "News Corp. Preferred ADRs"),
each of which represents four fully paid and
nonassessable Preferred Limited Voting Ordinary Shares,
par value A$.50 per share, of News Corp. (the "News Corp.
Preferred Stock"). Each issued and outstanding share of
Class B Common Stock, par value $.01 per share (the
"Class B Common Stock," and, together with the Class A
Common Stock, the "Company Common Stock"), of the Company
(other than Dissenting Shares (as defined in Section
2.2(h)) or shares to be treated in accordance with
Section 2.1(b)) shall be converted into the right to
receive the Exchange Ratio of News Corp. Preferred ADRs.
All such shares of Company Common Stock, when so
converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate that, immediately
prior to the Effective Time, represented outstanding
shares of Company Common Stock (the "Common Stock
Certificates") shall cease to have any rights with
respect thereto, except the right to receive, upon the
surrender of such Common Stock Certificate, the News
Corp. Preferred ADRs to which such holder is entitled
pursuant to this Section 2.1(c), as represented by one or
more certificates, and any cash in lieu of fractional
News Corp. Preferred ADRs to be issued or paid in
consideration therefor in accordance with Section 2.2(e)
and any dividends or distributions to which such holder
is entitled pursuant to Section 2.2(c), in each case
without interest.
(d) Exchange Ratio for Company Preferred
Stock.
(i) (A) Subject to Section
2.2(e), if the Series A Preferred Stock Approval (as
defined in Section 3.3 below) is obtained, each issued
and outstanding share of 6.375% Cumulative Redeemable
Convertible Preferred Stock, Series A, par value $.01 per
share (the "Series A Preferred Stock"), of the Company
(other than Dissenting Shares or shares to be treated in
accordance with Section 2.1(b)) shall be converted into
the right to receive the number of News Corp. Preferred
ADRs equal to the product of (x) the Exchange Ratio and
(y) the number of shares of Class B Common Stock that a
holder of such share of Series A Preferred Stock would
have received if such share of Series A Preferred Stock
had been converted into shares of Class B Common Stock
immediately prior to the Effective Time.
(B) In the event that the
Company Series A Preferred Stock Approval is not
obtained, in accordance with the terms of the Series A
Preferred Stock, each share of Series A Preferred Stock
outstanding at the Effective Time shall remain
outstanding as shares of Series A Preferred Stock of the
Surviving Corporation, and shall thereafter be
convertible into the right to receive the number of News
Corp. Preferred ADRs determined in accordance with the
terms of such Series A Preferred Stock, based upon the
Exchange Ratio. If, after the Effective Time, any shares
of Series A Preferred Stock are converted by the holder
thereof, Fox shall (1) pay News Corp. consideration to be
agreed upon by Fox and News Corp. for the issuance of the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued upon such conversion,
and (2) procure that News Corp., pursuant to the terms of
the Deposit Agreement (as defined below), (x) deposits
with the Custodian (as defined in the Deposit Agreement)
the shares of News Corp. Preferred Stock underlying the
News Corp. Preferred ADRs to be issued upon such
conversion and (y) instructs the Depositary to deliver
the News Corp. Preferred ADRs to be issued upon such
conversion in accordance with the written instructions of
the holder of such shares of Series A Preferred Stock so
converted. For purposes of this Agreement, "Depositary"
shall mean Citibank, N.A., as Depositary pursuant to the
Deposit Agreement, dated as of November 11, 1994, among
News Corp., the Depositary and the holders from time to
time of News Corp. Preferred ADRs (the "Deposit
Agreement").
(ii) (A) Subject to Section
2.2(e), if the Series E Preferred Stock Approval (as
defined in Section 3.3 below) is obtained, each issued
and outstanding share of Series E Cumulative Convertible
Redeemable Preferred Stock, par value $.01 per share (the
"Series E Preferred Stock," and, together with the Series
A Preferred Stock, the "Company Preferred Stock"), of the
Company (other than Dissenting Shares or shares to be
treated in accordance with Section 2.1(b)) shall be
converted into the right to receive the number of News
Corp. Preferred ADRs equal to the product of (A) the
Exchange Ratio and (B) the number of shares of Class A
Common Stock that a holder of such share of Series E
Preferred Stock would have received if such share of
Series E Preferred Stock had been converted into shares
of Class A Common Stock immediately prior to the
Effective Time.
(B) In the event that the
Company Series E Preferred Stock Approval is not
obtained, in accordance with the terms of the Series E
Preferred Stock, each share of Series E Preferred Stock
outstanding at the Effective Time shall remain
outstanding as shares of Series E Preferred Stock of the
Surviving Corporation, and shall thereafter be
convertible into the right to receive the number of News
Corp. Preferred ADRs determined in accordance with the
terms of such Series E Preferred Stock, based upon the
Exchange Ratio. If, after the Effective Time, any shares
of Series E Preferred Stock are converted by the holder
thereof, Fox shall (1) pay News Corp. consideration to be
agreed upon by Fox and News Corp. for the issuance of the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued upon such conversion,
and (2) procure that News Corp., pursuant to the terms of
the Deposit Agreement, (x) deposits with the Custodian
the shares of News Corp. Preferred Stock underlying the
News Corp. Preferred ADRs to be issued upon such
conversion and (y) instructs the Depositary to deliver
the News Corp. Preferred ADRs to be issued upon such
conversion in accordance with the written instructions of
the holder of such shares of Series E Preferred Stock so
converted.
(iii) All such shares of Series
A Preferred Stock, if the Series A Preferred Stock
Approval is obtained, and all such shares of Series E
Preferred Stock, if the Series E Preferred Stock Approval
is obtained, when so converted, shall no longer be
outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a
certificate that, immediately prior to the Effective
Time, represented outstanding shares (other than
Dissenting Shares) of Company Preferred Stock (the
"Preferred Stock Certificates," and, together with the
Common Stock Certificates, the "Certificates"), when so
converted shall cease to have any rights with respect
thereto, except the right to receive, upon the surrender
of such Preferred Stock Certificate, the News Corp.
Preferred ADRs to which such holder is entitled pursuant
to this Section 2.1(d), as represented by one or more
certificates, and any cash in lieu of fractional News
Corp. Preferred ADRs to be issued or paid in
consideration therefor in accordance with Section 2.2(e)
and any dividends or distributions to which such holder
is entitled pursuant to Section 2.2(c), in each case
without interest.
(e) Exchange Ratio for Company Stock
Options.
(i) At the Effective Time, each
outstanding Company Stock Option (as defined in Section
3.2) shall immediately vest and be exercisable, if not
vested and exercisable at such time, and all Company
Stock Options shall be assumed by Fox and adjusted in
accordance with the terms thereof and this Agreement to
be exercisable to purchase News Corp. Preferred ADRs, as
provided below. Following the Effective Time, each
Company Stock Option shall continue to have, and shall be
subject to, the same terms and conditions set forth in
the Company Stock Option Plans (as defined in Section
3.2) or any other agreement pursuant to which such
Company Stock Option was subject immediately prior to the
Effective Time, except as set forth in this Section
2.1(e) and except that (A) each such Company Stock Option
shall be exercisable for that number of News Corp.
Preferred ADRs equal to the product of (1) the aggregate
number of shares of Company Common Stock for which such
Company Stock Option was exercisable and (2) the Exchange
Ratio, provided, that no Company Stock Option shall be
exercisable for a fractional News Corp. Preferred ADR,
and holders of a Company Stock Option exercisable for a
fractional News Corp. Preferred ADR shall be entitled to
receive, upon exercise thereof, an offset against the
aggregate exercise price of the Company Stock Options
being exercised therewith, such offset to be determined
by multiplying the fraction of a News Corp. Preferred ADR
to which a holder of a Company Stock Option would be
entitled to receive times the excess of the closing price
of the News Corp. Preferred ADRs as reported on the NYSE
Composite Tape on the date of exercise over the exercise
price of such Company Stock Option, (B) the exercise
price per News Corp. Preferred ADR issuable pursuant to
such Company Stock Option shall be equal to the aggregate
exercise price of such Company Stock Option at the
Effective Time divided by the number of News Corp.
Preferred ADRs for which such Company Stock Option shall
be exercisable as determined in accordance with the
preceding clause (A), rounded up to the next highest
cent, if necessary, and (C) if an option holder's
employment is terminated within six months after the
Closing Date, such holder's Company Stock Options may be
exercised during the one year period following the date
of termination of employment of the holder of such
option. The Company shall take such action as shall be
required under the terms of the Company Stock Option
Plans or any other agreement pursuant to which a Company
Stock Option was subject immediately prior to the
Effective Time to effectuate the provisions of this
Section 2.1(e).
(ii) As of the Effective Time,
Fox will enter into an assumption agreement with respect
to each Company Stock Option, which shall provide for
Fox's assumption of the obligations of the Company under
the Company Stock Option Plans or other agreement under
which such Company Stock Option was granted. Prior to
the Effective Time, the Company shall make such
amendments, if any, to the Company Stock Option Plans as
shall be necessary to permit the assumption and
adjustment and other terms referred to in this Section
2.1(e). As soon as practicable after the Effective Time,
Fox shall deliver to the participants in the Company
Option Plans notices setting forth the number of News
Corp. Preferred ADRs and exercise price for each such
participant's options.
(iii) At the time that a
Company Stock Option is exercised in accordance with the
terms hereof, Fox shall (1) pay News Corp. consideration
to be agreed upon by Fox and News Corp. for the issuance
of the shares of News Corp. Preferred Stock underlying
the News Corp. Preferred ADRs to be issued upon such
exercise, and (2) procure that News Corp., pursuant to
the terms of the Deposit Agreement, (x) deposits with the
Custodian the shares of News Corp. Preferred Stock
underlying the News Corp. Preferred ADRs to be issued
upon such exercise and (y) instructs the Depositary to
deliver the News Corp. Preferred ADRs to be issued upon
such exercise in accordance with the written instructions
of the holder of such Company Stock Option so exercised.
(iv) News Corp. shall take all
corporate action necessary to reserve for issuance a
sufficient number of shares of News Corp. Preferred Stock
and News Corp. Preferred ADRs for delivery upon exercise
of Company Stock Options under the Company Stock Options
Plans assumed by Fox in accordance with Section 2.1(e).
News Corp. shall file a registration statement on Form S-
8 (or amend an existing registration statement on Form S-
8) to become effective as of the Effective Time with
respect to the News Corp. Preferred ADRs subject to
Company Stock Options and shall maintain the
effectiveness of such registration statement (and
maintain the current status of the prospectus or
prospectuses contained therein) for so long as such
options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject
to the reporting requirements under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), where applicable, Fox shall administer
the Company Stock Option Plans assumed pursuant to
Section 2.1(e)(i) in a manner that complies with Rule
16b-3 promulgated under the Exchange Act, to the extent
the applicable Company Stock Option Plan complied with
such rule prior to the Merger.
(f) Exchange Ratio for Company Warrants.
(i) Except as provided in
Section 2.1(b), at the Effective Time, each outstanding
Company Warrant (as defined in Section 3.2) shall be
assumed by Fox and adjusted in accordance with the terms
thereof and this Agreement to be exercisable to purchase
News Corp. Preferred ADRs, as provided below. Except as
provided in Section 2.1(b), following the Effective Time,
each Company Warrant shall continue to have, and shall be
subject to, the same terms and conditions set forth in
the agreement pursuant to which such Company Warrant was
subject immediately prior to the Effective Time, except
as set forth in this Section 2.1(f) and except that (A)
each such Company Warrant shall be exercisable for that
number of News Corp. Preferred ADRs equal to the product
of (1) the aggregate number of shares of Company Common
Stock for which such Company Warrant was exercisable and
(2) the Exchange Ratio, provided, that no Company Warrant
shall be exercisable for a fractional News Corp.
Preferred ADR, and holders of a Company Warrant
exercisable for a fractional News Corp. Preferred ADR
shall be entitled to receive, upon exercise thereof, an
offset against the aggregate exercise price of the other
Company Warrants being exercised therewith, such offset
to be determined by multiplying the fraction of a News
Corp. Preferred ADR to which a holder of a Company
Warrant would be entitled to receive times the excess of
the closing price of the News Corp. Preferred ADRs as
reported on the NYSE Composite Tape on the date of
exercise over the exercise price of such Company Warrant,
and (B) the exercise price per News Corp. Preferred ADR
issuable pursuant to such Company Warrant shall be equal
to the aggregate exercise price of such Company Warrant
at the Effective Time divided by the number of News Corp.
Preferred ADRs for which such Company Warrant shall be
exercisable as determined in accordance with the
preceding clause (A), rounded up to the next highest
cent, if necessary. The Company shall take such action
as shall be required under the terms of any agreement
pursuant to which any Company Warrants were issued to
effectuate the provisions of this Section 2.1(f) and
Section 2.1(b).
(ii) As of the Effective Time,
Fox will enter into an assumption agreement with respect
to each Company Warrant, which shall provide for Fox's
assumption of the obligations of the Company under the
agreement under which such Company Warrant was granted.
Prior to the Effective Time, the Company shall make such
amendments, if any, to the Company Warrants as shall be
necessary and permitted by the terms of the Company
Warrants to permit the assumption and adjustment referred
to in this Section 2.1(f).
(iii) At the time that a
Company Warrant is exercised in accordance with the terms
hereof, Fox shall (1) pay News Corp. consideration to be
agreed upon by Fox and News Corp. for the issuance of the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued upon such exercise, and
(2) procure that News Corp., pursuant to the terms of the
Deposit Agreement, (x) deposits with the Custodian the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued upon such exercise and
(y) instructs the Depositary to deliver the News Corp.
Preferred ADRs to be issued upon such exercise in
accordance with the written instructions of the holder of
such Company Warrant so exercised.
(iv) News Corp. shall take all
corporate action necessary to reserve for issuance a
sufficient number of shares of News Corp. Preferred
Shares and News Corp. Preferred ADRs for delivery upon
exercise of Company Warrants assumed in accordance with
Section 2.1(f)(i).
Section 2.2 Exchange of Certificates.
(a) Exchange Agent; Depositary. Prior to
the Effective Time, Fox shall (i) pay to News Corp.
consideration to be agreed upon by Fox and News Corp. for
the issuance of the shares of News Corp. Preferred Stock
underlying the News Corp. Preferred ADRs to be issued in
the Merger, (ii) procure that News Corp., pursuant to the
terms of the Deposit Agreement (A) deposits with the
Custodian the shares of News Corp. Preferred Stock
underlying the News Corp. Preferred ADRs to be issued in
the Merger and (B) instructs the Depositary to deposit
the News Corp. Preferred ADRs to be issued in the Merger
with News Corp.'s transfer agent for the News Corp.
Preferred ADRs or with such other bank or trust company
designated by Fox with an office or agency in the City of
New York, New York (the "Exchange Agent"), for the
benefit of the holders of shares of Company Common Stock
and Company Preferred Stock, for exchange in the Merger
in accordance with this Article II, through the Exchange
Agent, and (iii) from time to time as necessary, deposit
with the Exchange Agent cash to be paid in lieu of
fractional News Corp. Preferred ADRs pursuant to Section
2.2(e) (such certificates representing News Corp.
Preferred ADRs (together with any dividends or
distributions with respect thereto to which the holders
of shares of Company Common Stock and Company Preferred
Stock may be entitled to pursuant to Section 2.2(c)) and
cash in lieu of fractional News Corp. Preferred ADRs
being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as
reasonably practicable after the Effective Time, Fox
shall cause the Exchange Agent to mail to each holder of
record of Company Common Stock and Company Preferred
Stock immediately prior to the Effective Time whose
shares were converted, pursuant to the Merger, into the
right to receive News Corp. Preferred ADRs (i) a letter
of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such
form and have such other customary provisions as Fox, in
consultation with the Company, may reasonably specify)
and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for certificates
representing News Corp. Preferred ADRs which such holder
has the right to receive pursuant to the provisions of
this Article II. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by Fox, together with such
letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange
therefor certificates representing that whole number of
News Corp. Preferred ADRs which such holder has the right
to receive pursuant to the provisions of this Article II,
and the Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of
shares of Company Common Stock or Company Preferred Stock
which is not registered in the transfer records of the
Company, certificates representing the proper number of
News Corp. Preferred ADRs may be issued to a transferee
if the Certificate representing such shares of Company
Common Stock or Company Preferred Stock is presented to
the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer and by evidence that
any applicable stock transfer taxes have been paid.
Until surrendered as contemplated by this Section 2.2,
each Certificate shall be deemed, at any time after the
Effective Time, to represent only the right to receive
upon such surrender certificates representing the News
Corp. Preferred ADRs and any cash in lieu of fractional
News Corp. Preferred ADRs, as contemplated by this
Section 2.2 and any dividends or distributions to which a
holder may be entitled. No interest will be paid or will
accrue on any cash paid or payable in lieu of any
fractional News Corp. Preferred ADRs.
(c) Distributions with Respect to
Unexchanged Company Common Stock and Company Preferred
Stock. No dividends or other distributions declared or
made after the Effective Time with respect to News Corp.
Preferred ADRs with a record date after the Effective
Time shall be paid to the holder of any unsurrendered
Certificate with respect to the News Corp. Preferred ADRs
issuable hereunder in respect thereof, and no cash
payment in lieu of fractional News Corp. Preferred ADRs
shall be paid to any such holder pursuant to Section
2.2(e), until the holder of record of such Certificate
shall surrender such Certificate. Subject to the effect
of applicable Laws (as defined in Section 3.4(a)),
following surrender of any such Certificate there shall
be paid to the record holder of the certificates
representing News Corp. Preferred ADRs issued in exchange
therefor, without interest, (i) at the later of (A) the
time of such surrender and (B) the day following the
Effective Time, the amount of any cash payable in lieu of
a fractional News Corp. Preferred ADRs to which such
holder is entitled pursuant to Section 2.2(e) and the
amount of dividends or other distributions with a record
date after the Effective Time theretofore paid with
respect to such whole News Corp. Preferred ADRs, and (ii)
if the payment date for any dividend or distribution
payable with respect to such whole News Corp. Preferred
ADRs has not occurred prior to the surrender of such
Certificate, at the appropriate payment date therefor,
the amount of dividends or other distributions with a
record date after the Effective Time but prior to the
surrender of such Certificate.
(d) No Further Ownership Rights in
Company Common Stock and Company Preferred Stock. All
News Corp. Preferred ADRs issued upon the surrender for
exchange of shares of Company Common Stock and Company
Preferred Stock pursuant to the Merger and in accordance
with the terms hereof (including any cash paid pursuant
to Section 2.2(c) or 2.2(e)) shall be deemed to have been
issued in full satisfaction of all rights pertaining to
such shares of Company Common Stock and Company Preferred
Stock, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other
distributions with a record date prior to the Effective
Time which may have been declared or made by the Company
on such shares of Company Common Stock and Company
Preferred Stock in accordance with the terms of this
Agreement or prior to the date hereof and which remain
unpaid at the Effective Time, and from and after the
Effective Time there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock and
Company Preferred Stock which are converted pursuant to
the Merger and were outstanding immediately prior to the
Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation
for any reason, they shall be cancelled and exchanged for
News Corp. Preferred ADRs, together with any cash in lieu
of fractional News Corp. Preferred ADRs and any dividends
or distributions with respect to News Corp. Preferred
ADRs, as provided in this Article II.
(e) No Fractional Shares. No certificate
or scrip representing fractional News Corp. Preferred
ADRs shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests shall
not entitle the owner thereof to any rights as a security
holder of News Corp. All holders entitled to receive a
fractional News Corp. Preferred ADR shall be entitled to
receive, in lieu thereof, an amount in cash determined by
multiplying (i) the fraction of a News Corp. Preferred
ADR to which such holder would otherwise have been
entitled times (ii) $18.625.
(f) Termination of Exchange Fund. Any
portion of the Exchange Fund which remains undistributed
to the holders of shares of Company Common Stock and
Company Preferred Stock on the second anniversary of the
Effective Time shall be delivered to Fox, upon demand,
and any holders of shares of Company Common Stock and
Company Preferred Stock who have not theretofore
delivered all of their Certificates in accordance with
Section 2.2 shall thereafter look only to Fox for payment
of their claim for News Corp. Preferred ADRs, any cash in
lieu of fractional News Corp. Preferred ADRs and any
dividends or distributions with respect to News Corp.
Preferred ADRs.
(g) No Liability. Neither Fox, the
Company nor the Exchange Agent shall be liable to any
holder of shares of Company Common Stock, Company
Preferred Stock or News Corp. Preferred ADRs, as the case
may be, for such shares (or dividends or distribution
with respect thereto) or cash in lieu of fractional
shares delivered to a public official pursuant to any
applicable abandoned property, escheat, or similar Law.
(h) Dissenting Shares. Notwithstanding
anything in this Agreement to the contrary, shares of
Class B Common Stock, Series A Preferred Stock and Series
E Preferred Stock (collectively, the "Shares")
outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded
appraisal for such Shares in accordance with Section 262
of the DGCL, if such Section 262 provides for appraisal
rights for such Shares in the Merger ("Dissenting
Shares"), shall not be converted into a right to receive
the Merger consideration, as provided in Sections 2.1(c),
2.1(d)(i)(A) and 2.1(d)(ii)(A), respectively, unless such
holder fails to perfect or withdraws or otherwise loses
his right to appraisal. If, after the Effective Time,
such holder fails to perfect or withdraws or loses his
right to appraisal, such Shares shall be treated as if
they had been converted as of the Effective Time into a
right to receive the Merger consideration, without
interest thereon. The Company shall give Fox prompt
notice of any demands received by the Company for
appraisal of Shares, and, prior to the Effective Time,
Fox shall have the right to participate in all
negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall
not, except with the prior written consent of Fox, make
any payment with respect to, or settle or offer to
settle, any such demands.
Section 2.3 Closing of Transfer Books. From
and after the Effective Time, the stock transfer books of
the Company shall be closed and no transfer of shares of
Company Common Stock or Company Preferred Stock converted
pursuant to the Merger shall thereafter be made. If,
after the Effective Time, Certificates representing such
shares are presented to Fox, they shall be cancelled and
exchanged for News Corp. Preferred ADRs, together with
any cash in lieu of fractional News Corp. Preferred ADRs
and any dividends or distributions with respect to News
Corp. Preferred ADRs, as provided in this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to News
Corp., Fox and Merger Sub that:
Section 3.1 Organization and Qualifications;
Subsidiaries.
(a) The Company and each Material
Company Subsidiary (as defined below) is a corporation,
partnership or other legal entity duly incorporated or
organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or
organization and has the requisite power and authority
and all governmental permits, approvals and other
authorizations necessary to own, lease and operate its
properties and to carry on its business as it is now
being conducted, except where the failure to be so
organized, existing or in good standing or to have such
power, authority and governmental permits, approvals and
other authorizations would not, individually or in the
aggregate, have a material adverse effect on the
business, assets, financial or other condition, or
results of operations of the Company and the Subsidiaries
(as defined below) of the Company (each, a "Company
Subsidiary"), taken as a whole (a "Company Material
Adverse Effect").
(b) Each Company Subsidiary that (i)
constitutes a Significant Subsidiary of the Company
within the meaning of Rule 1-02 of Regulation S-X of the
Securities and Exchange Commission (the "SEC"), (ii) owns
the material assets of or is the licensee of a United
States broadcast television station, or (iii) is
otherwise material to the business or operations of the
Company and the Company Subsidiaries, taken as a whole,
is referred to herein as a "Material Company Subsidiary."
For purposes of this Agreement, a "Subsidiary" of any
person means (A) a corporation in which such person, a
subsidiary of such person, or such person and one or more
subsidiaries of such person, directly or indirectly, at
the date of determination, has either (i) a majority
ownership interest or (ii) the power, under ordinary
circumstances, to elect, or to direct the election of, a
majority of the board of directors of such corporation or
(B) a partnership in which such person, a subsidiary of
such person, or such person and one or more subsidiaries
of such person (i) is, at the date of determination, a
general partner of such partnership, or (ii) has a
majority ownership interest in such partnership or the
right to elect, or to direct the election of, a majority
of the governing body of such partnership, or (C) any
other person (other than a corporation or a partnership)
in which such person, a subsidiary of such person, or
such person and one or more subsidiaries of such person
has either (i) at least a majority ownership interest or
(ii) the power to elect, or to direct the election of, a
majority of the directors or other governing body of such
person.
Section 3.2 Capitalization. Except as set
forth in Section 3.2 of the letter from the Company,
dated the date hereof, addressed to News Corp., Fox and
Merger Sub (the "Company Disclosure Letter"): The
authorized capital stock of the Company consists of
400,000,000 shares of Class A Common Stock, 400,000,000
shares of Class B Common Stock, and 100,000,000 shares of
preferred stock, par value $.01 per share, of which
1,200,000 shares were designated as Series A Preferred
Stock, 250,000 shares were designated as Series B
Preferred Stock, 25,000 shares were designated as Series
C Senior Preferred Stock, and 300,000 shares were
designated as Series E Preferred Stock (together with the
Series A Preferred Stock, the Series B Preferred Stock,
and the Series C Senior Preferred Stock, the "NWCG
Preferred Stock"). As of June 30, 1996, (a)(i)
28,986,326 shares of Class A Common Stock were issued and
outstanding, all of which were validly issued, fully paid
and nonassessable, (ii) 38,277,908 shares of Class B
Common Stock were issued and outstanding, all of which
were fully paid and nonassessable, (iii) 1,200,000 shares
of Series A Preferred Stock were issued and outstanding,
all of which were fully paid and nonassessable, (iv)
250,000 shares of Series B Preferred Stock were issued
and outstanding, all of which were fully paid and
nonassessable, (v) 25,000 shares of Series C Senior
Preferred Stock were issued and outstanding, all of which
were fully paid and nonassessable, and (vi) 300,000
shares of Series E Preferred Stock were issued and
outstanding, all of which were fully paid and
nonassessable; (b) 13,375,000 warrants to purchase shares
of Class A Common Stock (the "Class A Warrants") were
issued and outstanding; (c) 3,476,955 warrants to
purchase shares of Class B Common Stock (the "Class B
Warrants" and, together with the Class A Warrants, the
"Company Warrants") were issued and outstanding; and
(d)(i) 20,853,604 shares of Class A Common Stock were
reserved for issuance upon conversion of the Series B
Preferred Stock and the Series E Preferred Stock,
(ii) 5,903,188 shares of the Class B Common Stock were
reserved for issuance upon conversion of the Series A
Preferred Stock, (iii) 13,375,000 shares of Class A
Common Stock were reserved for issuance upon exercise of
the Class A Warrants, (iv) 3,476,955 shares of Class B
Common Stock were reserved for issuance upon exercise of
the Class B Warrants, (v) 5,190,178 shares of Class A
Common Stock were reserved for issuance upon exercise of
outstanding stock options (the "Company Stock Options")
granted pursuant to the Company's 1994 Stock Option Plan
and the Company's 1996 Stock Option Plan (collectively,
the "Company Stock Option Plans") and (vi) 1,400,341
shares of Class A Common Stock were reserved for issuance
upon exercise of options available for grant under the
Company Stock Option Plans. Except as set forth above or
in Section 3.2 of the Company Disclosure Letter, as of
June 30, 1996, no shares of capital stock or other voting
securities of the Company were issued, reserved for
issuance or outstanding and, since such date, no shares
of capital stock or other voting securities or options in
respect thereof have been issued except (x) upon the
exercise of the Company Stock Options outstanding on June
30, 1996 or issued after such date in accordance with
Section 5.1 or (y) upon the conversion of convertible
securities or upon the exercise of Company Warrants, in
each case outstanding on June 30, 1996. Except as set
forth above or in Section 3.2 of the Company Disclosure
Letter, as of June 30, 1996, there are no options or
agreements relating to the issued or unissued capital
stock of the Company or any Company Subsidiary, or
obligating the Company or any Company Subsidiary to
issue, transfer, grant or sell any shares of capital
stock of, or other equity interests in, or securities
convertible into or exchangeable for any capital stock or
other equity interests in, the Company or any Company
Subsidiary. Except for required repurchases of options
or stock upon termination of employment to the extent
required by agreements in effect on the date hereof,
there are no outstanding contractual obligations of the
Company or any Company Subsidiary to repurchase, redeem
or otherwise acquire any shares of Company Common Stock
or NWCG Preferred Stock or any other shares of capital
stock of the Company or any Company Subsidiary.
Section 3.3 Authority Relative to This
Agreement. The Company has all necessary corporate power
and authority to execute and deliver this Agreement, to
perform its obligations hereunder and, subject to
adoption of this Agreement and the Company Charter
Proposal by a majority of the issued and outstanding
shares of Class A Common Stock and Class B Common Stock,
voting together as a single class as contemplated herein
(the "Company Stockholder Approval"), to consummate the
transactions contemplated hereby (the "Transactions").
The execution and delivery of this Agreement by the
Company and the consummation by the Company of the
Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate
proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the
Transactions (other than (a) the Company Stockholder
Approval, (b) if the shares of Series A Preferred Stock
are to be converted pursuant to Section 2.1(d), the
approval of this Agreement by a majority of the issued
and outstanding shares of Series A Preferred Stock (the
"Series A Preferred Stock Approval"), (c) if the shares
of Series E Preferred Stock are to be converted pursuant
to Section 2.1(d), the approval of this Agreement by a
majority of the issued and outstanding shares of Series E
Preferred Stock (the "Series E Preferred Stock Approval")
and (d) the Merger Filing). This Agreement has been duly
and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery
thereof by News Corp., Fox and Merger Sub, constitutes
the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its
terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally and by equitable
principles to which the remedies of specific performance
and injunctive and similar forms of relief are subject
and except that rights to indemnity hereunder may be
subject to Federal or state securities laws or the
policies underlying such laws.
Section 3.4 No Conflict; Required Filings and
Consents; Certain Contracts. (a) Except as set forth in
Section 3.4 of the Company Disclosure Letter, the
execution and delivery of this Agreement by the Company
do not, and the performance of its obligations under this
Agreement and the consummation of the Transactions by the
Company will not, (i) conflict with or violate the
certificate of incorporation or by-laws or equivalent
organizational documents of the Company or any Material
Company Subsidiary, (ii) subject to the making of the
filings and obtaining the approvals identified in Section
3.4(b), conflict with or violate any law, rule,
regulation, order, judgment or decree (collectively,
"Laws") applicable to the Company or any Material Company
Subsidiary or by which any property or asset of the
Company or any Material Company Subsidiary is bound or
affected, or (iii) subject to the making of the filings
and obtaining the approvals identified in Section 3.4(b),
conflict with or result in any breach of or constitute a
default (or an event which with notice or lapse of time
or both would become a default) under, result in the loss
(by the Company, any such Material Company Subsidiary or
the Surviving Corporation) or modification in a manner
materially adverse to the Company and the Company
Subsidiaries of any material right or benefit under, or
give to others any right of termination, amendment,
acceleration, repurchase or repayment, increased payments
or cancellation of, or result in the creation of any
security interests, liens, claims, pledges, options,
rights of first refusal, agreements, limitations on
voting rights, charges and other encumbrances of any
nature whatsoever (collectively, "Liens") on any property
or asset of the Company or any Material Company
Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit,
franchise, or other instrument or obligation
(collectively, "Contracts"), to which the Company or any
Company Subsidiary is a party or by which the Company or
any Material Company Subsidiary or any property or asset
of the Company or any Material Company Subsidiary is
bound or affected, except, in the case of clauses (ii)
and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which would not prevent or
delay in any material respect consummation of the
Transactions, or otherwise, individually or in the
aggregate, prevent the Company from performing its
obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a
Company Material Adverse Effect.
(b) The execution and delivery of this
Agreement by the Company do not, and the performance of
its obligations under this Agreement and the consummation
of the Transactions by the Company will not, require any
consent, approval, authorization or permit of, or filing
with or notification to, any federal, state or local
governmental or regulatory agency, authority, commission
or instrumentality, whether domestic or foreign (each a
"Governmental Entity"), except (i) for (A) applicable
requirements of the Exchange Act, the Securities Act of
1933, as amended (the "Securities Act"), and state
securities or "blue sky" laws (the "Blue Sky Laws"), (B)
the pre-merger notification requirements of the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the
"HSR Act"), (C) approval of the Transactions by the
Federal Communications Commission (the "FCC") under the
Communications Act of 1934, as amended (the
"Communications Act"), and the rules and regulations of
the FCC promulgated thereunder (the "FCC Rules"), and (D)
the Merger Filing, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not,
individually or in the aggregate, prevent or delay in any
material respect consummation of the Transactions, or
otherwise prevent the Company from performing its
obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a
Company Material Adverse Effect.
Section 3.5 SEC Reports and Financial
Statements. Each form, report, schedule, registration
statement and definitive proxy statement filed by the
Company with the SEC since December 31, 1994 and prior to
the date hereof (as such documents have been amended
prior to the date hereof, collectively, the "Company SEC
Reports"), as of their respective dates, complied in all
material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and
regulations thereunder. None of the Company SEC Reports,
as of their respective dates, contained any 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, in the light of the
circumstances under which they were made, not misleading,
except for such statements, if any, as have been modified
or superseded by subsequent filings prior to the date
hereof. The consolidated financial statements of the
Company and the Company Subsidiaries included in such
reports comply as to form in all material respects with
applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto,
have been prepared in accordance with United States
generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except
as may be indicated in the notes thereto or, in the case
of the unaudited interim financial statements, as
permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of the unaudited interim financial
statements, to normal, year-end audit adjustments) the
consolidated financial position of the Company and the
Company Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows
for the periods then ended. Except as set forth in
Section 3.5 of the Company Disclosure Letter, since June
30, 1996, neither the Company nor any of the Company
Subsidiaries has incurred any liabilities or obligations
(whether absolute, accrued, fixed, contingent,
liquidated, unliquidated or otherwise and whether due or
to become due) of any nature, except liabilities,
obligations or contingencies (a) which are reflected on
the unaudited balance sheet of the Company and the
Company Subsidiaries as at June 30, 1996 (including the
notes thereto), (b) which (i) were incurred in the
ordinary course of business after June 30, 1996 and
consistent with past practices, (ii) are disclosed in the
Company SEC Reports filed after June 30, 1996 or (iii)
would not, individually or in the aggregate, have a
Company Material Adverse Effect, or (c) which were
incurred as a result of actions taken or refrained from
being taken (i) in furtherance of the transactions
contemplated by this Agreement or (ii) at the request of
News Corp. or Fox. Since June 30, 1996, there has been
no change in any of the significant accounting (including
tax accounting) policies, practices or procedures of the
Company or any Company Material Subsidiary.
Section 3.6 Absence of Certain Changes or
Events. Except (a) as set forth in Section 3.6 of the
Company Disclosure Letter, (b) as contemplated by this
Agreement, (c) as disclosed in any Company SEC Report,
(d) for actions taken or refrained from being taken at
the request of News Corp. or Fox, (e) for events or
developments resulting from the transactions contemplated
by this Agreement or the execution and delivery of this
Agreement, and (f) for actions taken or refrained from
being taken in furtherance of the transactions
contemplated by this Agreement, since March 31, 1996, (x)
the Company and the Company Subsidiaries have conducted
their respective businesses only in the ordinary course,
consistent with past practice, and have not taken any of
the actions set forth in Section 5.1 hereof and (y) there
has not occurred or arisen any event that, individually
or in the aggregate, has had or, insofar as reasonably
can be foreseen, is likely in the future to have, a
Company Material Adverse Effect other than events or
developments generally affecting the industry in which
the Company and the Company Subsidiaries operate.
Neither the Company nor any Company Subsidiary has any
agreement, arrangement or understanding with King World
Productions, Inc. ("King World") pursuant to which the
Company or any Company Subsidiary is obligated to make
any payment to King World as a result of the recent
discussions regarding a possible transaction between the
Company and King World.
Section 3.7 Taxes.
(a) Except as set forth in Section 3.7(a)
of the Company Disclosure Letter:
(i) The Company and each
Company Subsidiary have timely filed (or have had timely
filed on their behalf) or will timely file or cause to be
timely filed, all material Tax Returns required by
applicable Law to be filed by any of them prior to or as
of the Effective Time. All such Tax Returns and
amendments thereto are, or will be before the Effective
Time, true, complete and correct in all material
respects.
(ii) The Company and each
Company Subsidiary have paid (or have had paid on their
behalf), or where payment is not yet due, have
established (or have had established on their behalf and
for their sole benefit and recourse), or will establish
or cause to be established on or before the Effective
Time, an adequate reserve for the payment of, all
material Taxes due with respect to any period ending
prior to or as of the Effective Time.
(iii) No deficiency or
adjustment for any material Taxes has been proposed,
asserted or assessed against the Company or any Company
Subsidiary that has not been resolved or paid or for
which an adequate reserve has not been established in
accordance with generally accepted accounting principles.
There are no Liens for material Taxes upon the assets of
the Company or any Company Subsidiary, except Liens for
current Taxes not yet due.
(iv) None of the Company or any
Company Subsidiary has waived any statute of limitations
with respect to Taxes or agreed to any extension of time
with respect to a Tax assessment, Tax deficiency or Tax
Return. There are no Tax Returns of the Company or the
Company Subsidiaries which are currently the subject of
an audit.
(v) None of the Company or any
Company Subsidiary has filed a consent under section
341(f) of the Internal Revenue Code of 1986, as amended
(the "Code").
(vi) None of the Company or any
Company Subsidiary is a party to any Tax allocation or
Tax sharing agreement.
(vii) Since July 17, 1996
neither the Company nor any of its Subsidiaries has taken
any action, nor will take any action, that would cause
the acquisition of the Company pursuant to this Agreement
and the Stock Purchase Agreement to fail to qualify for
the exceptions described in former Treas. Regs.
SECTION 1.1502-13(f)(2)(i), Treas. Regs. SECTION 1.1502-13(j)(5),
former Treas. Regs. SECTION 1.1502-19(g)(1) and Treas. Regs.
SECTION 1.1502-19(c)(3), other than the Transactions.
(b) For purposes of this Agreement, the
following terms shall have the following meanings:
(i) "Taxes" shall mean all
Federal, state, local and foreign taxes, and other
assessments of a similar nature (whether imposed directly
or through withholding), including any interest,
additions to tax, or penalties applicable thereto or with
respect to Tax Returns.
(ii) "Tax Returns" shall mean
all Federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms and
information returns and any amended tax return relating
to Taxes.
Section 3.8 Employee Benefit Plans.
(a) Each Benefit Plan of the Company (the
"Company Benefit Plans") to which the Company or a
Company Subsidiary maintains or contributes or is
required to maintain or contribute has been administered
in all material respects in accordance with its terms.
The Company, each Company Subsidiary and all Company
Benefit Plans are in compliance in all material respects
with the applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the
Code, all other applicable Laws and all applicable
collective bargaining agreements.
(b) None of the Company or any Company
Subsidiary has incurred any liability to a pension plan
under Title IV of ERISA (other than for contributions not
yet due) or to the Pension Benefit Guaranty Corporation
(other than for payment of premiums not yet due).
(c) With respect to each Benefit Plan,
(i) there have been no prohibited transactions (as
defined in Section 406 of ERISA and in Section 4975 of
the Code), (ii) no fiduciary (as defined in Section 3(21)
of ERISA) has any liability for breach of fiduciary duty
or any other failure to act or comply in connection with
the administration or investment of the assets of the
Benefit Plan, (iii) no fiduciary has engaged in any
transactions with respect to the Benefit Plans which
could subject the Company or a Company Subsidiary, any
fiduciary, any plan administrator or any party dealing
with any such plan to either a civil penalty assessed
pursuant to Section 501(i) of ERISA or the tax or penalty
on prohibited transaction imposed by Section 4975 of the
Code, and (iv) no claims with respect to the assets
thereof are pending or threatened, and there are no facts
which would give rise to or could reasonably be expected
to give rise to any such claims against any Benefit Plan,
any fiduciary with respect to such Benefit Plans or the
assets of such Benefit Plans, other than an event
described in clauses (i) through (iv) above that would
not result in a material liability.
(d) The Company and the Company
Subsidiaries have delivered or made available to News
Corp. true and complete copies of (i) the current Benefit
Plan documents and summary plan descriptions (or to the
extent such documents or summary plan descriptions do not
exist, a written description of such Benefit Plans), and
any other documents filed or required to be filed with a
government agency in respect thereof, (ii) the most
recent determination letter received from the IRS,
indicating that the ERISA Plans satisfy the requirements
of the Code, (iii) the two most recent Form 5500 Annual
Reports with respect to the Benefit Plans and a copy of
the two most recent actuarial reports with respect to the
Benefit Plans, and (iv) all related trust agreements,
insurance contracts or other funding agreements which
implement the Benefit Plans.
(e) For purposes of this Agreement, the
term "Benefit Plan" shall mean any material plan,
program, arrangement, practice or contract which provides
benefits or compensation to or on behalf of employees or
former employees of the Company or any Company
Subsidiary, whether formal or informal, including
(without limitation) the following types of Benefit
Plans:
(i) Executive Arrangements -
any bonus, incentive compensation, profit sharing, stock
option, stock appreciation, phantom stock, deferred
compensation, commission, severance, golden parachute or
other executive compensation plan, rabbi trust, program,
contract, arrangement or practice;
(ii) ERISA Plans - any
"employee benefit plan" (as defined in section 3(3) of
ERISA), including (without limitation) any multiemployer
plan (as defined in section 3(37) and section 4001(a)(3)
of ERISA), defined benefit pension plan, profit sharing
plan, money purchase pension plan, savings or thrift
plan, stock bonus plan, employee stock ownership plan, or
any plan, fund, program, arrangement or practice
providing for medical (including post-retirement
medical), hospitalization, accident, sickness, dental,
disability, or life insurance benefits; and
(iii) Other Employee Fringe
Benefits - any stock purchase, vacation, scholarship, day
care, prepaid legal services, severance pay or other
material fringe benefit plan, program, arrangement,
contract or practice.
Section 3.9 Litigation. Except as disclosed
in Section 3.9 of the Company Disclosure Letter or in the
Company SEC Reports filed since December 31, 1995, there
are no claims, suits, actions or proceedings pending or,
to the Company's knowledge, threatened or contemplated,
nor are there any investigations or reviews by any
Governmental Entity pending or, to the Company's
knowledge, threatened or contemplated, against, relating
to or affecting the Company or any of the Company
Subsidiaries, which could reasonably be expected to have,
individually or in the aggregate, a Company Material
Adverse Effect, or to prohibit or materially restrict the
consummation of the Transactions, nor is there any
judgment, decree, order, injunction, writ or rule of any
court, governmental department, commission, agency,
instrumentality or authority or any arbitrator
outstanding against the Company or any Company Subsidiary
having, or which, insofar as can be reasonably foreseen,
in the future is likely to have, any such Company
Material Adverse Effect. In addition, there have not
been any developments with respect to any of the claims,
suits, actions, proceedings, investigations or reviews
disclosed in the Company SEC Reports which, insofar as
can be reasonably foreseen, in the future are likely to
have a Company Material Adverse Effect.
Section 3.10 Registration Statement and Proxy
Statement/Prospectus. The information supplied or to be
supplied by the Company, any Company Subsidiary or their
respective Representatives (as defined in Section 6.2)
for inclusion in (a) the Registration Statement (as
defined in Section 6.8) will not, either at the time the
Registration Statement is filed with the SEC, at the time
any amendment thereof or supplement thereto is filed with
the SEC, at the time it becomes effective under the
Securities Act or at the Effective Time, contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary
to make the statements therein not misleading and (b) the
Proxy Statement/Prospectus (as defined in Section 6.8),
including any amendments and supplements thereto, will
not, either at the date mailed to the Company's
stockholders or at the time of the Company Meeting (as
defined in Section 6.7), contain any untrue statement of
a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading. The Proxy
Statement/Prospectus, as to information supplied by the
Company, any Company Subsidiary or their respective
Representatives, will comply in all material respects
with all applicable provisions of the Securities Act and
the Exchange Act and the rules and regulations
promulgated thereunder.
Section 3.11 NBC Agreements. Under the terms
of the NBC Agreements (as defined in Section 6.1(b)), the
Company has received gross proceeds of $200 million and
will receive an additional amount of $225 million of
gross proceeds, in each case plus a working capital
adjustment, upon the consummation of the transactions
contemplated thereby. Based on such proceeds, the
Company intends to file a Federal income tax return for
the year ending December 31, 1996 which reflects a
Federal income tax attributable directly to the
transactions pursuant to the NBC Agreements (assuming the
closings of both such transactions occur during such
period), after giving effect to the application of
operating loss carry forwards, not in excess of $30
million. To the extent permitted by and practicable
under existing Company Contracts, the Company intends to
use a substantial portion of the net proceeds received
under the NBC Agreements to repay outstanding
indebtedness prior to the Closing.
Section 3.12 Opinion of Financial Advisor.
The Company's Board of Directors received the oral
opinion of Goldman, Sachs & Co., on July 17, 1996, to the
effect that, as of such date, the Exchange Ratio is fair
to the stockholders of the Company, other than NWCGP and
Holdings.
Section 3.13 Brokers. No broker, finder or
investment banker (other than Goldman, Sachs & Co., CS
First Boston Corporation and Furman Selz, LLC) is
entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon
arrangements made by or on behalf of the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEWS CORP.
News Corp. hereby represents and warrants to
the Company that:
Section 4.1 Organization and Qualifications;
Subsidiaries.
(a) Each of News Corp. and each Material
News Corp. Subsidiary (as defined below) is a
corporation, partnership or other legal entity duly
incorporated or organized, validly existing and, if
applicable, in good standing under the laws of the
jurisdiction of its incorporation or organization and has
the requisite power and authority and all governmental
permits, approvals and other authorizations necessary to
own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the
failure to be so organized, existing or, if applicable,
in good standing or to have such power, authority and
governmental permits, approvals and other authorizations
would not, individually or in the aggregate, have a
material adverse effect on the business, assets,
financial or other condition, or results of operations of
News Corp. and the Subsidiaries of News Corp., and
Twentieth Holdings Corporation and its Subsidiaries,
including, but not limited to, Fox (each, a "News Corp.
Subsidiary"), taken as a whole (a "News Corp. Material
Adverse Effect").
(b) Fox, Merger Sub and each other News
Corp. Subsidiary that (i) constitutes a Significant
Subsidiary of News Corp. within the meaning of Rule 1-02
of Regulation S-X of the SEC, (ii) owns the material
assets of or is the licensee of a United States broadcast
television station, or (iii) is otherwise material to
the business or operations of News Corp. and the News
Corp. Subsidiaries, taken as a whole, is referred to
herein as a "Material News Corp. Subsidiary."
Section 4.2 Capitalization. The authorized
capital stock of News Corp. consists of 5,000,000,000
shares of A$.50 each, of which, as of June 30, 1996,
1,940,029,769 were designated as Ordinary Shares, par
value A$.50 each (the "News Corp. Ordinary Shares"), and
were issued and outstanding, 977,363,617 were designated
as News Corp. Preferred Stock and were issued and
outstanding, and 25,000,000 were designated as 6.25%
Convertible Preference Shares, par value A$.50 each (the
"News Corp. Convertible Stock"), and were issued and
outstanding. All of such shares were validly issued,
fully paid and nonassessable. As of June 30, 1996, (a)
an aggregate of 2,598,530 options ("News Corp. Options")
over Ordinary Shares were outstanding under the News
Corp. Executives' Share Option Scheme (the "Executive
Scheme"), (b) an aggregate of 1,299,265 News Corp.
Options over News Corp. Preferred Stock were outstanding
under the Executive Scheme, (c) an aggregate of 5,335,319
News Corp. Options over News Corp. Ordinary Shares were
outstanding under the News Corp. Share Option Plan (the
"Plan"), (d) an aggregate of 4,892,659 News Corp. Options
over News Corp. Preferred Stock were outstanding under
the Plan, (e) warrants to purchase an aggregate of
209,708,738 News Corp. Ordinary Shares (the "News Corp.
Warrants") were outstanding, (f) 209,708,738 News Corp.
Ordinary Shares were reserved for issuance upon exercise
of the News Corp. Warrants, (g) 4,690,938 News Corp.
Ordinary Shares and 2,345,469 shares of News Corp.
Preferred Stock were reserved for issuance upon
conversion of Zero Coupon Exchangeable Notes due March
2002, (h) 85,356,000 News Corp. Ordinary Shares and
42,678,000 shares of News Corp. Preferred Stock were
reserved for issuance upon conversion of Liquid Yield
Option Notes (LYON's) due March 11, 2013, and (i)
25,000,000 News Corp. Ordinary Shares and 12,500,000
shares of News Corp. Preferred Stock were reserved for
issuance upon conversion of the News Corp. Convertible
Stock on September 13, 1998 (the "Conversion Date"),
provided the News Corp. Ordinary Share price is A$21.62
per share or greater on the Conversion Date. (If the
News Corp. Ordinary Share price is below A$21.62 per
share the number of shares to be issued on conversion
will be determined by dividing the adjusted share price
into A$500 million. The adjusted share price will be
calculated as 92.5% of the weighted average sale price
during the 10 trading days prior to the Conversion Date.)
Except as set forth above, as of June 30, 1996, no shares
of capital stock or other voting securities of News Corp.
were issued, reserved for issuance or outstanding and,
since such date, no shares of capital stock or other
voting securities or options in respect thereof have been
issued except (x) upon the exercise of News Corp. Stock
Options outstanding on June 30, 1996 or (y) upon the
conversion of convertible securities or upon the exercise
of the News Corp. Warrants, in each case outstanding on
June 30, 1996. Except as set forth above, and except
with respect to agreements between News Corp. and MCI
Communications Corporation and the Scheme of Arrangement
involving News Corp. and News International plc, the
terms of which were previously disclosed to the Company,
and except as contemplated herein, as of June 30, 1996
(i) there are no options or agreements relating to the
issued or unissued capital stock of News Corp. or any
News Corp. Subsidiary, or obligating News Corp. or any
News Corp. Subsidiary to issue, transfer, grant or sell
any shares of capital stock of, or other equity interests
in, or securities convertible into or exchangeable for
any capital stock or other equity interests in, News
Corp. or any News Corp. Subsidiary, (ii) there are no
outstanding contractual obligations of News Corp. or any
News Corp. Subsidiary to repurchase, redeem or otherwise
acquire any shares of News Corp. capital stock or any
shares of capital stock of any News Corp. Subsidiary,
(iii) the shareholders of News Corp. have no preemption
rights with respect to the News Corp. Preferred Shares
underlying the News Corp. Preferred ADRs to be issued in
the Merger and (iv) the issuance of the News Corp.
Preferred Shares underlying the News Corp. Preferred ADRs
to be issued in the Merger will not result in an
adjustment of the exercise price or number of shares
issuable upon exercise in respect of any options,
warrants or convertible securities of News Corp.
Section 4.3 Validity of News Corp. Preferred
Stock and News Corp. Preferred ADRs. The News Corp.
Preferred ADRs to be issued in the Merger will be issued
by the Depositary under the terms of the Deposit
Agreement. All of the shares of News Corp. Preferred
Stock underlying the News Corp. Preferred ADRs to be
issued in the Merger, when paid for by Fox and deposited
with the Custodian in accordance with Section 2.2(a) and
the terms of the Deposit Agreement, will be duly
authorized, validly issued, fully paid and nonassessable
and free and clear of all Liens. Upon the due issuance
by the Depositary of News Corp. Preferred ADRs evidencing
News Corp. Preferred Stock against the deposit of the
News Corp. Preferred Stock in accordance with the terms
of the Deposit Agreement, the News Corp. Preferred ADRs
to be issued in the Merger will be duly and validly
issued and persons in whose names the News Corp.
Preferred ADRs are registered will be entitled to the
rights of registered holders of News Corp. Preferred ADRs
specified therein and in the Deposit Agreement, and the
News Corp. Preferred ADRs will conform in all material
respects to the description of the News Corp. Preferred
ADRs contained in the Proxy Statement/Prospectus. The
Deposit Agreement has been duly and validly authorized by
all necessary corporate action of News Corp., has been
duly and validly executed and delivered by News Corp.,
and, assuming the due authorization, execution and
delivery thereof by the Depositary, constitutes the
legal, valid and binding obligation of News Corp.,
enforceable against News Corp. in accordance with its
terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally and by equitable
principles to which the remedies of specific performance
and injunctive and similar forms of relief are subject.
No holder of Company Common Stock, Company Preferred
Stock, Company Stock Options and Company Warrants (other
than News Corp., Fox, Merger Sub or any other News Corp.
Subsidiary) will be liable for any stamp duty or other
issuance or transfer taxes or duties in connection with
(a) the issuance and delivery of the News Corp. Preferred
Stock underlying the News Corp. Preferred ADRs to be
issued in the Merger, (b) the deposit with the Custodian
of the News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued in the Merger, (c) the
issuance and delivery of the News Corp. Preferred ADRS to
be issued in the Merger or (d) the consummation of any
other Transaction.
Section 4.4 Authority Relative to This
Agreement. (a) Each of News Corp., Fox and Merger Sub
has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transactions.
(b) The execution and delivery of this
Agreement by News Corp., Fox and Merger Sub and the
consummation by News Corp., Fox and Merger Sub of the
Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate
proceedings on the part of News Corp., Fox or Merger Sub
are necessary to authorize this Agreement or to
consummate the Transactions (other than the Merger
Filing). This Agreement has been duly and validly
executed and delivered by News Corp., Fox and Merger Sub
and, assuming the due authorization, execution and
delivery thereof by the Company, constitutes the legal,
valid and binding obligation of each of News Corp., Fox
and Merger Sub, enforceable against News Corp., Fox and
Merger Sub in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors'
rights generally and by equitable principles to which the
remedies of specific performance and injunctive and
similar forms of relief are subject and except that
rights to indemnity hereunder may be subject to Federal
or state securities laws or the policies underlying such
laws.
Section 4.5 No Conflict; Required Filings and
Consents. (a) The execution and delivery of this
Agreement by News Corp., Fox and Merger Sub do not, and
the performance of their respective obligations under
this Agreement and the consummation of the Transactions
by News Corp., Fox and Merger Sub will not, (i) conflict
with or violate the articles of incorporation or by-laws
or equivalent organizational documents of News Corp., Fox
or any other Material News Corp. Subsidiary, (ii) subject
to making the filings and obtaining the approvals
identified in Section 4.5(b), conflict with or violate
any Law applicable to News Corp., Fox or any other
Material News Corp. Subsidiary or by which any property
or asset of News Corp., Fox or any other Material News
Corp. Subsidiary is bound or affected, or (iii) subject
to making the filings and obtaining the approvals
identified in Section 4.5(b), conflict with or result in
any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a
default) under, result in the loss (by News Corp., Fox or
any other Material News Corp. Subsidiary) or modification
in a manner materially adverse to News Corp., Fox and the
other News Corp. Subsidiaries of a material right or
benefit under, or give to others any right of
termination, amendment, acceleration, repurchase or
repayment, increased payments or cancellation of, or
result in the creation of any Liens on any property or
asset of News Corp., Fox or any other Material News Corp.
Subsidiary pursuant to, any Contract to which News Corp.,
Fox or any other Material News Corp. Subsidiary is a
party or by which News Corp., Fox or any other Material
News Corp. Subsidiary or any property or asset of News
Corp., Fox or any other Material News Corp. Subsidiary is
bound, except, in the case of clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent or delay in any
material respect consummation of the Transactions, or
otherwise, individually or in the aggregate, prevent News
Corp., Fox or Merger Sub from performing their respective
obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a
News Corp. Material Adverse Effect. No authorization,
approval or consent of any Governmental Entity in
Australia is currently required to effect dividend
payments on the News Corp. Preferred Shares to be
delivered to the Custodian pursuant to Section 2.2(a) or
for the Depositary to effect dividend payments on the
News Corp. Preferred ADRs to be issued in the Merger.
(b) Except as set forth in Section 4.5
of the disclosure letter from News Corp., dated the date
hereof, addressed to the Company (the "News Corp.
Disclosure Letter"), the execution and delivery of this
Agreement by News Corp., Fox and Merger Sub do not, and
the performance of their respective obligations under
this Agreement and the consummation of the Transactions
by News Corp., Fox and Merger Sub will not, require any
consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Entity, except
(i) for (A) applicable requirements, if any, of the
Exchange Act, the Securities Act or the Blue Sky Laws,
(B) the pre-merger notification requirements of the HSR
Act, (C) the approval of the Transactions by the FCC
under the Communications Act and the FCC Rules, (D) the
Merger Filing, and (E) the filing of listing applications
and the filing of an application for quotation with the
stock exchanges on which the News Corp. Preferred Stock
and the News Corp. Preferred ADRs are listed or quoted,
and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in
the aggregate, prevent or delay in any material respect
consummation of the Transactions, or otherwise prevent
News Corp., Fox or Merger Sub from performing its
respective obligations under this Agreement in any
material respect, and would not, individually or in the
aggregate, have a News Corp. Material Adverse Effect.
Section 4.6 SEC Reports and Financial
Statements. Each form, report, schedule and registration
statement filed by News Corp. with the SEC since
December 31, 1994 and prior to the date hereof (as such
documents have been amended prior to the date hereof, the
"News Corp. SEC Reports"), as of their respective dates,
complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act
and the rules and regulations thereunder. None of the
News Corp. SEC Reports, as of their respective dates,
contained any 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, in
the light of the circumstances under which they were
made, not misleading, except for such statements, if any,
as have been modified or superseded by subsequent filings
prior to the date hereof. The consolidated financial
statements of News Corp. and the News Corp. Subsidiaries
included in such reports have been prepared in accordance
with Australian generally accepted accounting principles
applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes
thereto) and give a true and fair view (subject, in the
case of the unaudited interim financial statements, to
normal, year-end audit adjustments) of the consolidated
financial position of News Corp. and the News Corp.
Subsidiaries as at the dates thereof and the consolidated
results of their operations and cash flows for the
periods then ended, and such financial statements and the
reconciliations to United States generally accepted
accounting principles comply as to form in all material
respects with applicable accounting requirements and with
the published rules and regulations of the SEC with
respect thereto. Since March 31, 1996, neither News
Corp. nor any of the News Corp. Subsidiaries has incurred
any liabilities or obligations (whether absolute,
accrued, fixed, contingent, liquidated, unliquidated or
otherwise and whether due or to become due) of any
nature, except liabilities, obligations or contingencies
(a) which are reflected on the unaudited balance sheet of
News Corp. and the News Corp. Subsidiaries as at March
31, 1996 (including the notes thereto), or (b) which (i)
were incurred in the ordinary course of business after
March 31, 1996 and consistent with past practices, (ii)
are disclosed in the News Corp. SEC Reports filed after
March 31, 1996 or (iii) would not, individually or in the
aggregate, have a News Corp. Material Adverse Effect.
Since March 31, 1996, there has been no change in any of
the significant accounting (including tax accounting)
policies, practices or procedures of News Corp. or any
News Corp. Material Subsidiary.
Section 4.7 Absence of Certain Changes or
Events. Except as contemplated by this Agreement or as
disclosed in any News Corp. SEC Report, since March 31,
1996, (a) News Corp. and the News Corp. Subsidiaries have
conducted their respective businesses only in the
ordinary course, consistent with past practice, and have
not taken any of the actions set forth in Section 5.2
hereof, and (b) there has not occurred or arisen any
event that, individually or in the aggregate, has had or,
insofar as reasonably can be foreseen, is likely in the
future to have, a News Corp. Material Adverse Effect,
other than events or developments generally affecting the
industry in which News Corp. and the News Corp.
Subsidiaries operate.
Section 4.8 Litigation. Except as disclosed
in Section 4.8 of the News Corp. Disclosure Letter or in
the News Corp. SEC Reports, there are no claims, suits,
actions or proceedings pending or, to News Corp.'s
knowledge, threatened or contemplated, nor are there any
investigations or reviews by any Governmental Entity
pending or, to News Corp.'s knowledge, threatened or
contemplated, against, relating to or affecting News
Corp. or any of the News Corp. Subsidiaries, which could
reasonably be expected to have, individually or in the
aggregate, a News Corp. Material Adverse Effect, or to
prohibit or materially restrict the consummation of the
Transactions, nor is there any judgment, decree, order,
injunction, writ or rule of any court, governmental
department, commission, agency, instrumentality or
authority or any arbitrator outstanding against News
Corp. or any News Corp. Subsidiary having, or which,
insofar as can be reasonably foreseen, in the future is
likely to have, any such News Corp. Material Adverse
Effect. In addition, there have not been any
developments with respect to any of the claims, suits,
actions, proceedings, investigations or reviews disclosed
in the News Corp. SEC Reports filed prior to the date
hereof which, insofar as can be reasonably foreseen, in
the future are likely to have a News Corp. Material
Adverse Effect.
Section 4.9 Registration Statement and Proxy
Statement/Prospectus. The information supplied or to be
supplied by News Corp., any News Corp. Subsidiary or
their respective Representatives for inclusion in (a) the
Registration Statement will not, either at the time the
Registration Statement is filed with the SEC, at the time
any amendment thereof or supplement thereto is filed with
the SEC, at the time it becomes effective under the
Securities Act or at the Effective Time, contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary
to make the statements therein not misleading and (b) the
Proxy Statement/Prospectus, including any amendments and
supplements thereto, will not, either at the date mailed
to the Company's stockholders or at the time of the
Company Meeting, contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading. The Proxy
Statement/Prospectus, as to information supplied by News
Corp., any News Corp. Subsidiary or their respective
Representatives, will comply as to form in all material
respects with all applicable provisions of the
Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder, and the Registration
Statement, other than as to information supplied by the
Company, any Company Subsidiary or their respective
Representatives, will comply in all material respects
with the provisions of the Securities Act and the rules
and regulations promulgated thereunder.
Section 4.10 FCC Qualification. Except as
expressly contemplated by the third sentence of Section
6.1(b), (a) Fox and Merger Sub are, for purposes of
obtaining the approval of the FCC under the
Communications Act, legally, financially and otherwise
qualified to acquire control of the Company, and (b)
after due investigation, neither News Corp. nor Fox is
aware of any other facts or circumstances that might
prevent or delay the prompt approval of the FCC under the
Communications Act.
Section 4.11 Brokers. No broker, finder,
investment banker or other person is entitled to any
brokerage, finder's or other fee or commission in
connection with the Transactions based upon arrangements
made by or on behalf of News Corp., Fox or Merger Sub.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business of the Company
Pending the Merger. The Company covenants and agrees
that, except (a) as expressly permitted or contemplated
by this Agreement, (b) as set forth in Section 5.1 of the
Company Disclosure Letter, (c) for actions taken or
refrained from being taken at the request of News Corp.
or Fox, (d) for events or developments resulting from the
transactions contemplated by this Agreement or the
execution and delivery of this Agreement, and (e) for
actions taken or refrained from being taken in
furtherance of the transactions contemplated by this
Agreement, until the Effective Time, unless News Corp.
and Fox shall otherwise agree in writing prior to the
taking of any action otherwise prohibited by the terms of
this Section 5.1, the Company shall, and shall cause each
Company Subsidiary to, conduct its operations and
business in the ordinary and usual course of business and
consistent with past practice and use reasonable efforts
to preserve intact its business organizations' goodwill,
keep available the services of its present officers and
key employees, and preserve the goodwill and business
relationships with suppliers, distributors, customers and
others having business relationships with it. Without
limiting the generality of the foregoing, and except as
otherwise expressly permitted by this Agreement or as set
forth in Section 5.1 of the Company Disclosure Letter,
prior to the Effective Time, without the prior written
consent of News Corp. and Fox, which consent will not be
unreasonably withheld, the Company will not, and will
cause each Company Subsidiary not to:
(a) amend or otherwise change its Amended
and Restated Certificate of Incorporation (other than as
a result of the Company Charter Proposal) or by-laws
(other than immaterial by-law amendments which will not
interfere with or delay consummation of the
Transactions);
(b) issue or authorize the issuance of,
sell, pledge or otherwise dispose of, grant or otherwise
create any additional shares of, or any options to
acquire any shares of, its capital stock or any debt or
equity securities convertible into or exchangeable for
such capital stock, other than (i) any such issuance
pursuant to the exercise of outstanding Company Stock
Options or Company Warrants, or upon the conversion of
outstanding convertible securities, in each case in
accordance with their respective terms as in effect on
the date hereof, or (ii) the issuance of shares of
capital stock of a Company Subsidiary to the Company or
any wholly owned Company Subsidiary;
(c) purchase, redeem or otherwise acquire
or retire, or offer to purchase, redeem or otherwise
acquire or retire, any shares of its capital stock, other
than in transactions between the Company and its wholly
owned Subsidiaries and required repurchases of options or
stock upon termination of employment to the extent
required by agreements in effect on the date hereof;
(d) declare, set aside, make or pay any
dividend or other distribution, payable in cash, stock,
property or otherwise, with respect to any of its capital
stock, except dividends declared and paid by a Company
Subsidiary only to the Company or a wholly owned Company
Subsidiary; provided, however, that the Company may
declare and pay cash dividends on shares of NWCG
Preferred Stock in accordance with their respective
terms;
(e) incur or become contingently liable
with respect to any Indebtedness or guarantee any such
Indebtedness or issue any debt securities if the
aggregate amount of Indebtedness outstanding after giving
effect to such incurrence, guarantee or issuance exceeds
the sum of (i) the amount of Indebtedness of the Company
and its Subsidiaries at June 30, 1996 plus (ii) the
amount of the Company's unused commitments under its
credit facilities at June 30, 1996. For purposes of
this Section 5.1(e), "Indebtedness" shall mean and
include (i) indebtedness of the Company or any Company
Subsidiary for borrowed money whether short-term or long-
term and whether secured or unsecured, (ii) indebtedness
of the Company or any Company Subsidiary for the deferred
purchase price of services or property, which purchase
price (A) is due 12 months or more from the date of
incurrence of the obligation in respect thereof or (B)
customarily or actually is evidenced by a note or other
written instrument (including, without limitation, any
such indebtedness which is non-recourse to the credit of
the Company or any Company Subsidiary but is secured by
the assets of the Company or any Company Subsidiary),
(iii) obligations of the Company or any Company
Subsidiary under capitalized leases, (iv) obligations
arising under acceptance facilities, (v) all obligations
of the Company or any Company Subsidiary evidenced by
bonds, debentures, notes or other similar instruments,
(vi) all obligations of the Company or any Company
Subsidiaries upon which interest charges are customarily
paid, (vii) all obligations of the Company or any Company
Subsidiaries under conditional sale or other title
retention agreements relating to property purchased by
the Company or any Company Subsidiary (even though the
rights and remedies of the seller or lender under such
arrangement in the event of default are limited to
repossession or sale of such property), (viii)
obligations of the Company to repurchase, redeem, retire,
defease or otherwise acquire for value any of its capital
stock or any warrants, rights or options to acquire such
capital stock (with redeemable preferred stock being
valued at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid
dividends), (ix) the unpaid reimbursement obligations in
respect of all letters of credit issued for the account
of the Company or any Company Subsidiary (other than
letters of credit issued by or on behalf of the Company
or any Company Subsidiary in connection with a contest or
similar promotion of a broadcast television station of
such Company Subsidiary), (x) guarantees of Indebtedness
of others by the Company or any Company Subsidiary, and
(xi) renewals, extensions, refundings, deferrals,
restructurings, amendments and modifications of any such
indebtedness, guarantee or obligation; provided, that the
accrual of interest on Indebtedness issued with original
interest discount shall not be deemed to be an incurrence
of Indebtedness;
(f) merge, consolidate with or consummate
any other business combination with any person or acquire
or agree to acquire by merging or consolidating with, or
by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership,
association or other business entity;
(g) dispose of a substantial portion of
the Company's assets in a transaction outside the
ordinary course of business;
(h) except as may be required by
applicable Law or by contracts existing as of the date
hereof, or as contemplated by this Agreement, (i)
increase the compensation payable or to become payable to
its officers or employees, except in the ordinary course
of business consistent with past practice; (ii) enter
into any employment agreement with any executive officer
of the Company or, except in the ordinary course of
business consistent with past practice, with any other
employee; (iii) grant any severance or termination pay to
any director, officer or employee of the Company or any
Company Subsidiary, except in the ordinary course of
business consistent with past practice or pursuant to
existing Company Benefit Plans; (iv) enter into any
severance agreement with any director, officer or
employee except in the ordinary course of business
consistent with past practice; or (v) establish, adopt,
enter into, terminate, withdraw from or amend in any
material respect or take action to accelerate any rights
or benefits under any collective bargaining agreement,
any stock option plan, or any employee benefit plan or
policy;
(i) take, or permit any affiliate to
take, any other action that is reasonably likely to
delay, or adversely impact, the approval by any
Governmental Entity of the Transactions contemplated
hereby;
(j) neither New World Entertainment Ltd
nor any of its Subsidiaries will commence production, or
incur production costs in connection with, any new
programming for any television station owned by the
Company or any of its Subsidiaries which programming
(itself or a part of a committed series of programs) is
not currently the subject of an agreement or undertaking
with such television station;
(k) incur payment obligations to any
affiliate of the Company (other than a Company
Subsidiary) except for (i) rent and other payments
pursuant to lease obligations existing on the date of
this Agreement, (ii) the allocated amounts of insurance
premiums for insurance coverage existing on the date of
this Agreement or as renewed on substantially the same
terms, (iii) goods or services provided in the ordinary
course of business consistent with past practice at costs
no greater than would be charged by an unaffiliated third
party for comparable goods or services, and (iv) other
payments or payment obligations incurred in the ordinary
course of business consistent with past practice that do
not exceed, on a net aggregate basis, $3.5 million during
the remainder of 1996 and $5.5 million on an annualized
basis for any calendar year thereafter, provided, that
compensation payments in the ordinary course of business
to the executives and other officers of the Company and
its Subsidiaries shall not be subject to the provisions
of this clause (k); or
(l) authorize any of, or commit or agree
to take any of, the foregoing actions.
Section 5.2 Conduct of Business of News Corp.
and Fox Pending the Merger. Each of News Corp. and Fox
covenants and agrees that, except as expressly permitted
or contemplated by this Agreement, until the Effective
Time, unless the Company shall otherwise agree in writing
prior to the taking of any action otherwise prohibited by
the terms of this Section 5.2, News Corp. shall, and
shall cause each News Corp. Subsidiary (other than Fox
and its Subsidiaries) to, and Fox shall, and shall cause
its Subsidiaries to, conduct its operations and business
in the ordinary and usual course of business. Without
limiting the generality of the foregoing, and except as
otherwise expressly permitted or contemplated by this
Agreement, prior to the Effective Time, without the prior
written consent of the Company, which consent will not be
unreasonably withheld, News Corp. will not, and will
cause each News Corp. Subsidiary (other than Fox and its
Subsidiaries) not to, and Fox will not, and will cause
its Subsidiaries not to:
(a) amend its articles of association or
by-laws or equivalent organizational documents in any
manner that would be adverse to the holders of News Corp.
capital stock, or, unless appropriate adjustment is made
in the Exchange Ratio, subdivide, reclassify,
recapitalize, split, combine or exchange any of its
shares of capital stock; or
(b) take, or permit any affiliate to
take, any action that is reasonably likely to delay, or
adversely impact, the approval by any Governmental Entity
of the Transactions contemplated hereby.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 Governmental Approvals. (a) As
promptly as practicable after the execution of this
Agreement, News Corp., Fox and the Company shall file
notification reports under the HSR Act and shall request
early termination of the waiting period under the HSR Act
and use their commercially reasonable efforts to obtain
clearance or authorization under the HSR Act of the
Merger and the other transactions contemplated by this
Agreement and the Stock Purchase Agreement at the
earliest practicable time.
(b) Fox and the Company have jointly
filed with the FCC all requisite applications and other
necessary documents to obtain approval of the
Transactions by the FCC. News Corp., Fox and the Company
shall cooperate and use their commercially reasonable
efforts to obtain all required consents and approvals
(including approvals of the FCC to the transfer of
control of the entities that are controlled by the
Company and hold licenses issued by the FCC) and consents
from governmental agencies and third parties, including,
without limitation, taking all action necessary,
including commitments by News Corp., Fox and their
Subsidiaries to divest WITI, Channel 6, Milwaukee,
Wisconsin, if necessary in order to comply with the FCC's
rules. Notwithstanding the foregoing, Fox will not be
required to take any action to reduce the percentage of
U.S. television households served by stations in which
Fox or its Subsidiaries have an attributable interest
below 35%, as computed pursuant to the FCC's presently
effective rules, to the extent that such excess is due to
(i) the Company's failure to divest the assets of KNSD,
Channel 39, San Diego, California pursuant to the Asset
Purchase Agreement, dated as of May 22, 1996, with
National Broadcasting Company, Inc. ("NBC") with respect
to the sale to NBC or another buyer on similar terms of
all of the assets related to KNSD-TV, Channel 39, San
Diego, California (such agreement, together with the
Asset Purchase Agreement, dated as of May 22, 1996, with
NBC relating to the assets of WVTM-TV, Channel 13,
Birmingham, Alabama, being referred to collectively as
the "NBC Agreements"), or (ii) changes in the current FCC
attribution or multiple ownership rules that result in an
FCC attribution to Fox of interests held by Fox as of
July 17, 1996 if such interests were not attributed to
Fox as of such date. News Corp. and Fox acknowledge that
applications seeking renewal of certain of the FCC
licenses possessed by the Company are required to be
filed prior to the Outside Date (as defined in Section
7.1(b)). To the extent required, the Company will timely
file renewal applications and use its commercially
reasonable efforts in order to obtain renewal and
preservation of such licenses, and News Corp. and Fox
agree to cooperate with and do all things reasonably
necessary to assist the Company in obtaining the renewal
of such licenses.
Section 6.2 Access to Information. Subject to
applicable law, from the date hereof to the Effective
Time, the Company shall (and shall cause its Subsidiaries
and officers, directors, employees, auditors and agents
to) afford the officers, employees, auditors and agents
(the "Representatives") of News Corp. and Fox reasonable
access at reasonable times to its officers, employees,
agents, properties, offices, plants and other facilities,
books, records and Tax Returns, and shall furnish such
Representatives with all financial, operating and other
data and information as may be reasonably requested. All
information obtained will be subject to the
Confidentiality Agreement among the Company, News Corp.,
NWCGP and Holdings, dated as of July 17, 1996 (the
"Confidentiality Agreement").
Section 6.3 Further Action; Reasonable
Efforts. (a) Upon the terms and subject to the
conditions hereof, each of the parties hereto shall use
commercially reasonable efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make
effective the Transactions, including, without
limitation, using commercially reasonable efforts to
obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental
Entities, make all filings and required submissions with
Governmental Entities, including foreign filings and
submissions, and obtain all consents and approvals from
parties to Contracts with the parties hereto or their
respective Subsidiaries as are necessary for the
consummation of the Transactions. In case at any time
after the Effective Time any further action is necessary
or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this
Agreement shall use their reasonable efforts to take all
such action.
(b) Each party to this Agreement and
their respective Subsidiaries shall use its commercially
reasonable efforts not to take any action, or enter into
any transaction, which would result in a breach of any
representation, warranty, covenant or agreement made by
such party in this Agreement.
Section 6.4 Public Announcements. Each party
to this Agreement and their respective Subsidiaries shall
consult with each other before issuing any press release
or otherwise making any public statements with respect to
this Agreement or any of the Transactions and shall not
issue any such press release or make any such public
statement without the prior consent of the other parties
to this Agreement, which consent shall not be
unreasonably withheld; provided, however, that a party
may, without the prior consent of the other parties to
this Agreement, issue such press release or make such
public statement as may be required by law or any listing
agreement or arrangement to which any such person is a
party with a national securities exchange or if it has
used all reasonable efforts to consult with the other
parties to this Agreement and to obtain such parties'
consent but has been unable to do so in a timely manner.
Section 6.5 Directors' and Officers'
Indemnification and Insurance. (a) From and after the
Effective Time, Fox shall cause the Surviving Corporation
to indemnify, defend and hold harmless the present and
former officers and directors of the Company (each an
"Indemnified Officer/Director") against all losses,
claims, damages, liabilities, amounts or reasonable
expenses ("Losses") that are paid in settlement (provided
that such settlement has been approved by Fox, such
approval not to be unreasonably withheld) of, or
otherwise in connection with, any claim, action, suit,
proceeding or investigation (a "Claim"), based in whole
or in part on the fact that such person is or was a
director or officer of the Company and arising out of
actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the
Transactions), in each case to the full extent permitted
under the DGCL and the Company's Amended and Restated
Certificate of Incorporation and by-laws as in effect on
the date of this Agreement. The Surviving Corporation
shall pay any expenses in advance of the final
disposition of any such Claim to each Indemnified
Officer/Director to the fullest extent permitted under
the DGCL upon receipt from the Indemnified
Officer/Director to whom expenses are advanced of any
undertaking to repay such advances if required under the
DGCL. The Surviving Corporation shall cooperate in the
defense of any such matter.
(b) Fox shall cause the Surviving
Corporation to keep in effect provisions in its
certificate of incorporation and by-laws providing for
exculpation of director liability and its indemnification
of the Indemnified Officers/Directors to the fullest
extent permitted under the DGCL, which provisions shall
not be amended except as required by applicable law or
except to make changes permitted by law that would
enlarge the right of indemnification of the Indemnified
Officers/Directors.
(c) For a period of six years after the
Effective Time, Fox shall cause the Surviving Corporation
to maintain in effect the current policies of directors'
and officers' liability insurance maintained by the
Company covering persons who are currently covered by the
Company's officers' and directors' liability insurance
policies with respect to actions or omissions occurring
at or prior to the Effective Time to the extent that such
policies are available; provided, that policies of at
least the same coverage containing terms and conditions
which are no less advantageous to the insureds may be
substituted therefor; and provided, further, that in no
event shall the Surviving Corporation be required to
expend amounts for premiums per annum in excess of 200%
of the current annual premiums for the twelve-month
period ending December 31, 1995 (the "Maximum Premium")
to maintain or procure insurance coverage pursuant to
this Section 6.5, or, if the cost of such coverage
exceeds the Maximum Premium, the maximum amount of
coverage that can be purchased for the Maximum Premium.
(d) From and after the Effective Time,
Fox agrees to indemnify, defend and hold harmless the
Indemnified Officers/Directors against all Losses that
are paid in settlement (provided that such settlement has
been approved by Fox, such approval not to be
unreasonably withheld) of, or otherwise in connection
with, a Claim based in whole or in part on the fact that
such Person is or was a director or officer of the
Company and arising out of actions or omissions occurring
at or prior to the Effective Time (including, without
limitation, the Transactions), in each case to the
fullest extent permitted by applicable Law and whether or
not the Surviving Corporation is permitted by applicable
Law to provide any indemnity with respect to such Losses.
Fox shall pay any reasonable expenses in advance of the
final disposition of any such Claim to each Indemnified
Officer/Director to the fullest extent permitted by
applicable Law. Fox shall cooperate in the defense of
any such matter.
(e) The provisions of this Section 6.5
shall survive the consummation of the Merger and
expressly are intended to benefit each of the Indemnified
Officers/Directors.
Section 6.6 Notification of Certain Matters.
News Corp. and Fox shall give prompt notice to the
Company, and the Company shall give prompt notice to News
Corp. and Fox, of (a) the occurrence or nonoccurrence of
any event the occurrence or nonoccurrence of which would
be reasonably likely to cause any representation or
warranty contained in this Agreement to be untrue or any
covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied and (b)
any failure of News Corp., Fox or the Company, as the
case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of
any notice pursuant to this Section 6.6 shall not limit
or otherwise affect the remedies available hereunder to
the party receiving such notice.
Section 6.7 Stockholder Meeting. The Company
shall call a meeting of its stockholders (the "Company
Meeting") to be held as promptly as practicable for the
purpose of considering and voting upon this Agreement and
the Merger and a proposal to amend the Company's Amended
and Restated Certificate of Incorporation to delete
Article 5 therefrom (the "Company Charter Proposal").
The Board of Directors of the Company shall, unless
otherwise required in accordance with their fiduciary
duties to the stockholders of the Company, recommend that
the stockholders of the Company approve this Agreement
and the Merger and the Company Charter Proposal.
Section 6.8 Registration Statement, Proxy
Statement/Prospectus. (a) As promptly as practicable
after the execution of this Agreement, (i) the Company
and News Corp. shall prepare and file with the SEC a
proxy statement relating to the Company Meeting to be
held in connection with the Transactions, including the
Company Charter Proposal (together with any amendments
thereof or supplements thereto, the "Proxy
Statement/Prospectus") and (ii) News Corp. shall prepare
and file with the SEC a registration statement (together
with all amendments thereto, the "Registration
Statement") in which the Proxy Statement/Prospectus shall
be included as a prospectus, in connection with the
registration under the Securities Act of the News Corp.
Preferred ADRs to be issued pursuant to the Merger. Each
of News Corp. and the Company (i) shall cause the Proxy
Statement/Prospectus and the Registration Statement to
comply as to form in all material respects with the
applicable provisions of the Securities Act, the Exchange
Act and the rules and regulations thereunder, (ii) shall
use commercially reasonable efforts to have or cause the
Registration Statement to become effective as promptly as
practicable, and (iii) shall take all or any action
required under any applicable federal or state securities
laws in connection with the issuance of News Corp.
Preferred ADRs pursuant to the Merger. The Company and
News Corp. shall furnish to the other all information
concerning the Company and News Corp. as the other may
reasonably request in connection with the preparation of
the documents referred to herein. As promptly as
practicable after the Registration Statement shall have
become effective, the Company shall mail the Proxy
Statement/Prospectus to its respective stockholders.
(b) The information supplied by each of
the Company and News Corp. for inclusion in the
Registration Statement and the Proxy Statement/Prospectus
shall not, at (i) the time the Registration Statement is
declared effective, (ii) the time the Proxy
Statement/Prospectus (or any amendment thereof or
supplement thereto) is first mailed to the stockholders
of the Company, (iii) the time of the Company Meeting, or
(iv) the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact
required to be stated therein or necessary in order to
make the statements therein not misleading. If, at any
time prior to the Effective Time, any event or
circumstance relating to the Company, any Company
Subsidiary, News Corp., any News Corp. Subsidiary, or
their respective officers or directors, should be
discovered by such party which should be set forth in an
amendment or a supplement to the Registration Statement
or the Proxy Statement/Prospectus, such party shall
promptly inform the other thereof and take appropriate
action in respect thereof.
Section 6.9 Blue Sky. News Corp. shall use
its commercially reasonable efforts to obtain prior to
the Effective Time all approvals or permits required to
carry out the transactions contemplated hereby under
applicable Blue Sky Laws in connection with the issuance
of News Corp. Preferred ADRs in the Merger and as
contemplated by this Agreement and the Stock Purchase
Agreement; provided, however, that with respect to such
qualifications neither News Corp. nor the Company shall
be required to register or qualify as a foreign
corporation or to take any action which would subject it
to general service of process or taxation in any
jurisdiction where any such entity is not now so subject.
The Company shall cooperate with News Corp. in the making
of all required filings under applicable Blue Sky Laws in
connection with the issuance of News Corp. Preferred ADRs
in the Merger.
Section 6.10 NYSE; ASX. News Corp. shall (a)
promptly prepare and submit to the New York Stock
Exchange ("NYSE") applications covering the News Corp.
Preferred ADRs to be issued pursuant to the transactions
contemplated by this Agreement and the Stock Purchase
Agreement, and shall use commercially reasonable efforts
to cause such securities to be approved for listing on
the NYSE prior to the Effective Time, subject to official
notice of issuance, and (b) within ten days after the
Effective Time, prepare and submit to the Australian
Stock Exchange ("ASX"), pursuant to the Listing Rules of
the ASX, applications covering the News Corp. Preferred
Stock underlying the News Corp. Preferred ADRs issued
pursuant to the transactions contemplated by this
Agreement and the Stock Purchase Agreement to cause such
securities to be approved for quotation by the ASX.
Section 6.11 Indemnification with Respect to
the Registration Statement.
(a) Each party hereto shall (i) indemnify
(in such role, an "Indemnifying Party") and hold harmless
each other party and their respective directors, officers
and controlling persons (an "Indemnified Party") against
any and all loss, liability, claim, damage and expense
whatsoever to which an Indemnified Party may become
subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of
any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or
the Proxy Statement/Prospectus, or any amendment or
supplement thereto, or any preliminary Proxy
Statement/Prospectus, 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; and (ii) reimburse the Indemnified Party for
any legal or other expenses reasonably incurred by the
Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however,
that (x) the Company shall be liable under this Section
6.11 only for information relating to the Company
included or incorporated by reference in the Registration
Statement or Proxy Statement/Prospectus, and (y) no
Indemnifying Party will be liable in any such case under
this Section 6.11 to the extent that any such loss,
claim, damage, liability or action arises out of any
untrue statement or alleged untrue statement or omission
or alleged omission made in any of such documents in
reliance upon and in conformity with written information
furnished to the Indemnifying Party by or on behalf of
such Indemnified Party specifically for use therein.
(b) Promptly after receipt by an
Indemnified Party under this Section 6.11 of notice of
any claim or the commencement of any action, the
Indemnified Party shall, if a claim in respect thereof is
to be made against the Indemnifying Party under this
Section 6.11, promptly notify the Indemnifying Party in
writing of the claim or the commencement of that action;
provided, however, that the failure to notify or a delay
in notifying the Indemnifying Party shall not relieve it
from any liability which it may have to an Indemnified
Party under this Section 6.11 except to the extent that
such Indemnifying Party is materially prejudiced thereby.
If any such claim or action shall be brought against an
Indemnified Party, and it shall notify the Indemnifying
Party thereof, the Indemnifying Party shall be entitled
to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified
Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party.
After notice from the Indemnifying Party to the
Indemnified Party of its election to assume the defense
of such claim or action, the Indemnifying Party shall
not be liable to the Indemnified Party under this Section
6.11 for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the
defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party
unless (i) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, (ii)
such Indemnified Party shall have been advised in writing
(a copy of which shall be provided to the Indemnifying
Party) by such counsel that there may be one or more
legal defenses available to it which are different from
or additional to those available to the Indemnifying
Party and in the reasonable judgment of such counsel it
is advisable for such Indemnified Party to employ
separate counsel or (iii) the Indemnifying Party has
failed to assume the defense to such claim or action and
employ counsel reasonably satisfactory to the Indemnified
Party, and, in the case of clauses (i), (ii) and (iii),
if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense of
such claim or action on behalf of such Indemnified Party;
it being understood, however, that the Indemnifying Party
shall not, in connection with any one such claim or
action or separate but substantially similar or related
claims or actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such
Indemnified Parties, which firm shall be designated in
writing by such Indemnified Parties. Each Indemnified
Party, as a condition of the indemnity agreements
contained herein shall use its commercially reasonable
efforts to cooperate with the Indemnifying Party in the
defense of any such claim or action. The Indemnifying
Party shall not be liable for any settlement of any such
claim or action effected without its written consent
(which consent shall not be unreasonably withheld), but
if settled with its written consent or if there is a
final judgment in favor of the plaintiff in any such
claim or action, the Indemnifying Party agrees to
indemnify and hold harmless any Indemnified Party from
and against any loss or liability by reason of such
settlement or judgment.
Section 6.12 Employee Benefits. For a period
of at least one year after the Effective Time, with
respect to each employee of the Company and the Company
Subsidairies at the Effective Time whose benefits are not
the subject of collective bargaining, Fox will (a) cause
to remain in effect for the benefit of such employee of
the Surviving Corporation or its Subsidiaries all Company
Benefit Plans of the Company and the Company Subsidiaries
relating to health and welfare and severance in effect on
the date of this Agreement or (b) provide such employee
of the Surviving Corporation or its Subsidiaries with
benefits under the Fox benefit plans; provided, that if
Fox elects to provide benefits under clause (b), Fox
shall treat in all respects employees of the Company in a
manner no less favorable than similarly situated
employees of Fox. In the event that any employee of the
Surviving Corporation or one of its Subsidiaries is at
any time after the Effective Time transferred to Fox or
any affiliate of Fox or becomes a participant in an
employee benefit plan, program or arrangement maintained
by or contributed by Fox or any affiliate of Fox, Fox
shall cause such plan, program or arrangement to treat
the prior service of such employee with the Company and
the Company Subsidiaries, to the extent prior service is
generally recognized under the comparable plan, program
or arrangement of the Company, as service rendered to Fox
or such affiliates for purposes of eligibility, vesting,
vacation time or severance benefits under such plans.
Section 6.13 Registration Rights Agreement.
Prior to the Closing Date, News Corp. and Fox shall
assume all of the Company's obligations under existing
agreements pursuant to which the Company has granted
registration rights (with Fox being solely responsible on
a direct basis for the applicable registration expenses
and indemnification obligations thereunder) (the
"Existing Registration Rights Agreements") or enter into
new agreements with the parties to the Existing
Registration Rights Agreements providing such persons
registration rights substantially similar to those
provided under the Existing Registration Rights
Agreements, all in form and substance reasonably
satisfactory to the Company.
Section 6.14 Affiliates. At least 10 days
prior to the mailing of the Proxy Statement/Prospectus,
(a) the Company shall deliver to News Corp. a letter
identifying all persons who may be deemed to be
affiliates of the Company under Rule 145 of the
Securities Act as of the record date for the Company
Meeting, including, without limitation, all of its
directors and executive officers (the "Rule 145
Affiliates") and (b) the Company shall advise the persons
identified in such letter of the resale restrictions
imposed by applicable securities laws and shall use
commercially reasonable efforts to obtain from each
person identified in such letter a written agreement,
substantially in the form of Exhibit A hereto.
Section 6.15 WARN Act. Fox agrees to assume
responsibility for giving all notices required by the
U.S. Worker Adjustment and Retraining Notification Act of
1988, as amended (the "WARN Act"), or any similar state
law or regulation, to assume liability for any alleged
failure to give such notice, and to indemnify and hold
harmless the Company and its affiliates for any and all
claims asserted under the WARN Act or any similar state
law or regulation because of a "plant closing" or a "mass
layoff" occurring on or after the Closing Date. The
Company shall, and shall cause the Company Subsidiaries
to, distribute to its employees all reasonable notices
with respect to the WARN Act, as reasonably requested by
Fox. For purposes of this Agreement, the Closing Date is
the "effective date" for purposes of the WARN Act.
Section 6.16 Fox Agreements. Fox, on behalf
of itself and its related entities, including, without
limitation, Fox Broadcasting Company, hereby waives any
breach, event of default or rights under any agreements
or instruments between Fox or any of its related
entities, on the one hand, and the Company or any of its
Subsidiaries, on the other hand, and any securities of
the Company held by Fox or any of its affiliates, that
may arise or result from the Merger or any of the other
transactions contemplated by this Agreement, the Voting
Agreement or the Stock Purchase Agreement.
Section 6.17 Settlement of Accounts. All
intercompany accounts between the Company and the Company
Subsidiaries, on the one hand, and Andrews Group
Incorporated and its affiliates (other than the Company
and the Company Subsidiaries), on the other hand, shall
be settled in the ordinary course of business consistent
with past practice, and all such accounts not settled
prior to the Closing shall be paid as promptly as
practicable thereafter.
Section 6.18 Sovereign Immunity. News Corp.
hereby waives any immunity to which it may become
entitled on the basis of sovereignty or otherwise in
respect of its obligations under this Agreement and
agrees not to interpose any such immunity as a defense to
any suit or action brought or maintained in respect of
News Corp.'s obligations under this Agreement.
Section 6.19 Certain Tax Matters. The Company
and its Subsidiaries shall use commercially reasonable
efforts to cooperate with Fox's satisfaction of the
exceptions described in former Treas. Regs. SECTION 1.1502-
13(f)(2)(i), Treas. Regs. SECTION 1.1502-13(j)(5), former
Treas. Regs. SECTION 1502-19(g)(1) and Treas. Regs. SECTION 1.1502-
19(c)(3).
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.1 Conditions to Each Party's
Obligation to Effect the Merger. The respective
obligations of each party to this Agreement to effect
the Merger shall be subject to the following conditions:
(a) The Company shall have received the
Company Stockholder Approval.
(b) The Effective Time shall have
occurred at or before the close of business in New York
City on June 30, 1997 (the "Outside Date").
(c) All necessary regulatory and
governmental approvals and consents, including, without
limitation, the approval of the FCC, shall have been
obtained.
(d) Any applicable waiting period under
the HSR Act shall have expired or been terminated.
(e) No action shall have been taken, and
no statute, rule, regulation, executive order, judgment,
decree, or injunction (other than a temporary restraining
order) shall have been enacted, entered, promulgated or
enforced (and not repealed, superseded, lifted or
otherwise made inapplicable), by any court of competent
jurisdiction or Governmental Entity which restrains,
enjoins or otherwise prohibits the consummation of the
Transactions (each party agreeing to use its commercially
reasonable efforts to avoid the effect of any such
statute, rule, regulation or order or to have any such
order, judgment, decree or injunction lifted).
(f) The Registration Statement shall have
become effective in accordance with the provisions of the
Securities Act, and no stop order suspending such
effectiveness shall have been issued and remain in
effect. News Corp. shall have received all state
securities or "blue sky" permits and other authorizations
necessary to issue the News Corp. Preferred ADRs pursuant
to this Agreement.
(g) The News Corp. Preferred ADRs shall
have been approved for listing on the NYSE, subject only
to official notice of issuance.
(h) The Stock Purchase shall have been
consummated prior to the Effective Time.
Section 7.2 Conditions to Obligations of the
Company to Effect the Merger. The obligations of the
Company to effect the Merger are subject to the
satisfaction of the following conditions, unless waived
by the Company:
(a) The representations and warranties of
News Corp. contained herein that are qualified as to
materiality shall be true and accurate, and those not so
qualified shall be true and accurate in all material
respects, in each case at and as of the Effective Time
with the same force and effect as though made at and as
of the Effective Time (except to the extent a
representation or warranty speaks specifically as of an
earlier date).
(b) Each of Fox and News Corp. shall have
performed, in all material respects, all obligations and
complied, in all material respects, with all covenants
required by this Agreement to be performed or complied
with by it prior to the Effective Time.
(c) News Corp. shall have delivered to
the Company a certificate, dated the Effective Time and
signed by its Chairman of the Board and Chief Executive
Officer or President, evidencing compliance with Sections
7.2(a) and (b).
(d) Fox shall have delivered to the
Company a certificate, dated the Effective Time and
signed by its Chairman of the Board and Chief Executive
Officer or President, evidencing compliance with Section
7.2(b).
(e) The Real Estate Purchase shall have
been consummated concurrently with the Effective Time.
(f) The Company shall have received legal
opinions of Squadron, Ellenoff, Plesent & Sheinfeld, LLP,
and Allen, Allen & Hemsley, counsel to News Corp. and
Fox, in form and substance reasonably acceptable to the
Company and its counsel, addressing the matters set forth
in Exhibits B-1 and B-2, respectively.
Section 7.3 Conditions to Obligations of Fox
and Merger Sub to Effect the Merger. The obligations of
Fox and Merger Sub to effect the Merger are subject to
the satisfaction of the following conditions, unless
waived by Fox and Merger Sub:
(a) The representations and warranties of
the Company contained herein that are qualified as to
materiality shall be true and accurate, and those not so
qualified shall be true and accurate in all material
respects, in each case at and as of the Effective Time
with the same force and effect as though made at and as
of the Effective Time (except to the extent a
representation or warranty speaks specifically as of an
earlier date).
(b) The Company shall have performed, in
all material respects, all obligations and complied, in
all material respects, with all covenants required by
this Agreement to be performed or complied with by it
prior to the Effective Time.
(c) The Company shall have delivered to
Fox a certificate, dated the Effective Time and signed by
its Chairman of the Board and Chief Executive Officer or
President, evidencing compliance with Sections 7.3(a) and
(b).
(d) News Corp. and Fox shall have
received the legal opinion of Skadden, Arps, Slate,
Meagher & Flom, counsel to the Company, in form and
substance reasonably acceptable to News Corp. and Fox and
their counsel, addressing the matters set forth in
Exhibit C.
ARTICLE VIII
TERMINATION, WAIVER, AMENDMENT AND CLOSING
Section 8.1 Termination. This Agreement may
be terminated and abandoned at any time prior to the
Effective Time, whether before or after approval of this
Agreement, the Merger and the other Transactions by the
stockholders of the Company:
(a) by the mutual written consent of the
Company, News Corp. and Fox;
(b) by the Company, News Corp. or Fox, if
(i) the Effective Time shall not have occurred on or
before the Outside Date, (ii) any court of competent
jurisdiction in the United States or any other
jurisdiction shall have issued an order, judgment or
decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the
Merger or any other material Transactions and such order,
judgment or decree shall have become final and
nonappealable or (iii) the Company Stockholder Approval
is not obtained at the Company Meeting; provided,
however, that the right to terminate this Agreement
pursuant to clause (i) shall not be available to any
party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such
date;
(c) by the Company, if there has been a
material breach by News Corp. or Fox, as the case may be,
of any representation, warranty, covenant or agreement
set forth in this Agreement, which breach has not been
cured within ten Business Days following receipt by News
Corp. or Fox, as the case may be, of notice of such
breach from the Company; provided, however, that the
right to terminate this Agreement pursuant to this
Section 8.1(c) shall not be available to the Company if
the Company, at such time, is in material breach of any
representation, warranty, covenant or agreement set forth
in this Agreement;
(d) by News Corp. or Fox, if there has
been a material breach by the Company of any
representation, warranty, covenant or agreement set forth
in this Agreement, which breach has not been cured within
ten Business Days following receipt by the Company of
notice of such breach from News Corp. or Fox; provided,
however, that the right to terminate this Agreement
pursuant to this Section 8.1(d) shall not be available to
News Corp. or Fox if News Corp. or Fox, at such time, is
in material breach of any representation, warranty,
covenant or agreement set forth in this Agreement;
(e) by News Corp. or Fox, if:
(i) the Company or any of its
affiliates enters into any agreement to consummate a
Qualifying Proposal (as defined below); or
(ii) the Company's board of
directors approves or recommends any Qualifying Proposal;
and
(f) by the Company if the Company's board
of directors approves, and the Company enters into, an
agreement providing for a Qualifying Proposal. For
purposes of this Agreement, a "Qualifying Proposal" shall
mean a written, bona fide Acquisition Proposal (as
defined below) that the Company's board of directors (i)
determines is reasonably capable of being financed and
(ii) determines, after consultation with its financial
advisors, provides consideration to the holders of the
Company's capital stock that is more favorable than that
provided by the Transactions. For purposes of this
Agreement, an "Acquisition Proposal" shall mean a merger
or other business combination involving the Company or
any Company Subsidiary, or an offer to acquire in any
manner, directly or indirectly, an equity interest in,
substantially all of the equity securities of, or a
substantial portion of the assets of the Company or any
Company Subsidiary.
Section 8.2 Amendment or Supplement. At any
time before or after approval of this Agreement by the
stockholders of the Company and prior to the Effective
Time, this Agreement may be amended or supplemented in
writing by the Company, News Corp. and Fox with respect
to any of the terms contained in this Agreement, except
that following approval by the stockholders of the
Company there shall be no amendment or supplement which
by law requires further approval by such stockholders
without further approval by the stockholders of the
Company.
Section 8.3 Extension of Time, Waiver, Etc.
At any time prior to the Effective Time, the Company,
News Corp. and Fox may:
(a) extend the time for the performance
of any of the obligations or acts of the other party;
(b) waive any inaccuracies in the
representations and warranties of the other party
contained herein or in any document delivered pursuant
hereto; or
(c) waive compliance with any of the
agreements or conditions of the other party contained
herein; provided, however, that no failure or delay by
the Company, News Corp. or Fox in exercising any right
hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other
right hereunder.
Any agreement on the part of a party hereto to
any extension or waiver contemplated by this Section 8.3
shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
Section 9.1 No Survival of Representations and
Warranties. None of the representations and warranties
in this Agreement or in any instrument delivered pursuant
to this Agreement shall survive the Merger or the
termination of this Agreement pursuant to Article VIII.
All of the covenants and agreements in this Agreement
shall survive the Merger indefinitely. Except for the
covenants and agreements contained in Section 6.4 and
this Article IX, none of the covenants and agreements
contained in this Agreement shall survive the termination
of this Agreement pursuant to Article VIII.
Section 9.2 Expenses. Whether or not the
Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the Transactions shall
be paid by the party incurring such expenses, except that
the expenses incurred in connection with the preparation
and printing of the Proxy Statement/Prospectus shall be
paid in equal shares by the Company and News Corp.
Section 9.3 Counterparts. This Agreement may
be executed in two or more counterparts, all of which
shall be considered the same agreement.
Section 9.4 Governing Law. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (OTHER THAN TO THE EXTENT
REQUIRED BY THE DGCL), WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAWS THEREOF. Each of the parties hereto
acknowledges that the negotiation of this Agreement
occurred in New York, New York and irrevocably agrees
that any legal suit, action or proceeding brought by
another party hereto arising out of or based upon this
Agreement or the transactions contemplated hereby shall
be instituted in any United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York (the "Courts"), waives any objection which
it may now or hereafter have to the laying of venue of
any such proceedings, submits to the exclusive
jurisdiction of such Courts in any such suit, action or
proceeding and agrees not to commence any such suit,
action or proceeding except in such Courts. Each of News
Corp. and Fox hereby appoints News America Publishing
Incorporated, 1211 Avenue of the Americas, New York, New
York 10036, Attention: Arthur M. Siskind, as its
authorized agent (the "Authorized Agent") upon which
process may be served in any such action arising out of
or based upon this Agreement or the transactions
contemplated hereby that may be instituted in any Court
by any party hereto and expressly consents to the
jurisdiction of any such Court, but only in respect of
any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto.
Each of News Corp. and Fox represents and warrants that
the Authorized Agent has agreed to act as said agent for
service of process, and each of News Corp. and Fox agrees
to take any and all action, including the filing of any
and all documents and instruments, that may be necessary
to continue such appointment in full force and effect as
aforesaid. If the Authorized Agent shall cease to act as
News Corp.'s or Fox's agent for service of process, News
Corp. or Fox, as the case may be, shall appoint without
delay another such agent and notify the Company of such
appointment. With respect to any such action in the
Courts, service of process upon the Authorized Agent and
written notice of such service to News Corp. or Fox, as
the case may be, shall be deemed, in every respect,
effective service of process upon News Corp. or Fox, as
the case may be.
Section 9.5 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered by hand, mailed by registered
or certified mail (return receipt requested) or sent by
prepaid overnight courier (with proof of service) or
confirmed facsimile transmission to the parties as
follows (or at such other addresses for a party as shall
be specified by like notice) and shall be deemed given on
the date on which so hand-delivered, mailed, delivered or
sent by confirmed facsimile transmission:
To the Company:
New World Communications Group
Incorporated
3200 Windy Hill Road
Suite 1100-West
Atlanta, Georgia 30339
Facsimile: (770) 563-9610
Attn: Terry C. Bridges
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Suite 3400
Los Angeles, California 90071
Facsimile: (213) 687-5600
Attn.: Thomas C. Janson, Jr.
To News Corp.:
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 768-2029
Attn: Arthur M. Siskind
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
To Fox or Merger Sub:
Fox Television Stations, Inc
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
Facsimile: (310) 369-2572
Attention: Jay Itzkowitz
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
Section 9.6 Miscellaneous. This Agreement:
(a) together with the Confidentiality
Agreement, the Exhibits, the News Corp. Disclosure Letter
and the Company Disclosure Letter, constitutes the entire
agreement, and supersedes all other prior agreements and
understandings, both written and oral, between the
parties with respect to the subject matter hereof and
thereof, including, without limitation, the Memorandum of
Understanding, dated as of July 17, 1996, among the
Company, NWCGP, Holdings and News Corp.;
(b) is not intended to and shall not
confer upon any person other than the parties hereto any
rights or remedies hereunder or by reason hereof, except
as provided in Sections 6.5, 6.11, 6.12, 6.15, 6.17 and
6.18; and
(c) shall not, nor shall any of the
rights or interests hereunder, be assigned by any party
hereto or assignable by operation of law or otherwise
without the prior written consent of the other parties;
provided, that News Corp. may assign its rights under
this Agreement to any News Corp. Subsidiary so long as
News Corp. remains responsible for all of its obligations
hereunder.
Section 9.7 Headings. The headings contained
in this Agreement are for reference purposes and shall
not affect in any way the meaning or interpretation of
this Agreement.
Section 9.8 Severability. Any term or
provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is
enforceable.
Section 9.9 Definitions. The following terms
are defined in the sections or locations indicated below:
Acquisition Proposal Section 8.1(f)
ASX Section 6.10
Authorized Agent Section 9.4
Benefit Plan Section 3.8(e)
Blue Sky Laws Section 3.4(b)
Business Day Section 1.3
Certificate of Merger Section 1.2
Certificates Section 2.1(d)(iii)
Claim Section 6.5(a)
Class A Common Stock Section 2.1(c)
Class B Common Stock Section 2.1(c)
Class A Warrants Section 3.2
Class B Warrants Section 3.2
Closing Section 1.3
Closing Date Section 1.3
Code Section 3.7(a)(v)
Common Stock Certificates Section 2.1(c)
Communications Act Section 3.4(b)
Company page 1
Company Benefit Plans Section 3.8(a)
Company Charter Proposal Section 6.7
Company Common Stock Section 2.1(c)
Company Disclosure Letter Section 3.2
Company Material Adverse Effect Section 3.1(a)
Company Meeting Section 6.7
Company Preferred Stock Section 2.1(d)(ii)(A)
Company SEC Reports Section 3.5
Company Stockholder Approval Section 3.3
Company Stock Option Plans Section 3.2
Company Stock Options Section 3.2
Company Subsidiary Section 3.1(a)
Company Warrants Section 3.2
Confidentiality Agreement Section 6.2
Contracts Section 3.4(a)
Conversion Date Section 4.2
Courts Section 9.4
Custodian Section 2.1(d)(i)(B)
Deposit Agreement Section 2.1(d)(i)(B)
Depositary Section 2.1(d)(i)(B)
DGCL Section 1.1
Dissenting Shares Section 2.2(h)
Effective Time Section 1.2
ERISA Section 3.8(a)
Exchange Act Section 2.1(e)(iv)
Exchange Agent Section 2.2(a)
Exchange Fund Section 2.2(a)
Exchange Ratio Section 2.1(c)
Executive Scheme Section 4.2
Existing Registration Rights
Agreements Section 6.13
FCC Section 3.4(b)
FCC Rules Section 3.4(b)
Fox page 1
Governmental Entity Section 3.4(b)
Holdings page 1
HSR Act Section 3.4(b)
Indebtedness Section 5.1(e)
Indemnified Officer/Director Section 6.5(a)
Indemnified Party Section 6.11(a)
Indemnifying Party Section 6.11(a)
King World Section 3.6
Laws Section 3.4(a)
Liens Section 3.4(a)
Losses Section 6.5(a)
Material Company Subsidiary Section 3.1(b)
Material News Corp. Subsidiary Section 4.1(b)
Maximum Premium Section 6.5(c)
Merger page 1
Merger Filing Section 1.2
Merger Sub page 1
NBC Section 6.1(b)
NBC Agreements Section 6.1(b)
News Corp. page 1
News Corp. Convertible Stock Section 4.2
News Corp. Disclosure Letter Section 4.5(b)
News Corp. Material Adverse Effect Section 4.1(a)
News Corp. Options Section 4.2
News Corp. Ordinary Shares Section 4.2
News Corp. Preferred ADRs Section 2.1(c)
News Corp. Preferred Stock Section 2.1(c)
News Corp. SEC Reports Section 4.6
News Corp. Subsidiary Section 4.1(a)
News Corp. Warrants Section 4.2
NWCGP page 1
NWCG Preferred Stock Section 3.2
NYSE Section 6.10
Outside Date Section 7.1(b)
Plan Section 4.2
Preferred Stock Certificates Section 2.1(d)(iii)
Principal Stockholder page 1
Proxy Statement/Prospectus Section 6.8(a)
Qualifying Proposal Section 8.1(f)
Real Estate Purchase page 1
Real Estate Purchase Agreement page 1
Registration Statement Section 6.8(a)
Representatives Section 6.2
Rule 145 Affiliates Section 6.14
SEC Section 3.1(b)
Securities Act Section 3.4(b)
Series A Preferred Stock Section 2.1(d)(i)(A)
Series B Preferred Stock Section 2.1(b)
Series C Preferred Stock Section 2.1(b)
Series E Preferred Stock Section 2.1(d)(ii)(A)
Series A Preferred Stock Approval Section 3.3
Series E Preferred Stock Approval Section 3.3
Shares Section 2.2(h)
Stock Purchase page 1
Stock Purchase Agreement page 1
Subsidiary Section 3.1(b)
Surviving Corporation Section 1.1
Tax Returns Section 3.7(b)(ii)
Taxes Section 3.7(b)(i)
Transactions Section 3.3
WARN Act Section 6.15
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered
as of the date first above written.
NEW WORLD COMMUNICATIONS
GROUP INCORPORATED
By /s/ William C. Bevins
William C. Bevins
Chief Executive Officer
THE NEWS CORPORATION LIMITED
By /s/ Arthur M. Siskind
Arthur M. Siskind
Director
FOX TELEVISION STATIONS, INC.
By /s/ Jay Itzkowitz
Jay Itzkowitz
Senior Vice President
FOX ACQUISITION CO., INC.
By /s/ Jon Fisse
Jon Fisse
Vice President
EXHIBIT A
FORM OF AFFILIATE LETTER
[Date]
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Attention: Arthur M. Siskind
Ladies and Gentlemen:
I have been advised that as of the date of this
letter agreement I may be deemed to be an "affiliate" of
New World Communications Group Incorporated, a Delaware
corporation (the "Company"), as such term is (i) defined
for purposes of paragraphs (c) and (d) of Rule 145 of the
rules and regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"),
or (ii) used in and for purposes of Accounting Series
Releases 130 and 135, as amended, of the Commission.
Pursuant to the terms of the Agreement and Plan of
Merger, dated as of September 24, 1996 (the "Merger
Agreement"), by and among The News Corporation Limited, a
South Australia corporation ("News Corp."), the Company,
Fox Television Stations, Inc., a Delaware corporation
("Fox"), and Fox Acquisition Co., Inc., a Delaware
corporation and a wholly owned subsidiary of Fox ("Merger
Sub"), Merger Sub will be merged with and into the
Company (the "Merger").
Pursuant to the Merger all of the shares of
capital stock of the Company owned by the undersigned
will be converted into the right to receive News Corp.
American Depositary Receipts (the "News Corp. Preferred
ADRs"), each representing four Preferred Limited Voting
Ordinary Shares of News Corp.
I represent, warrant and covenant to News Corp.
that, with respect to all News Corp. Preferred ADRs
received as a result of the Merger:
1. I shall not make any sale, transfer or
other disposition of the News Corp. Preferred ADRs in
violation of the Act or the Rules and Regulations.
2. I have carefully read this letter and the
Merger Agreement and have had an opportunity to discuss
the requirements of such documents and any other
applicable limitations upon my ability to sell, transfer
or otherwise dispose of News Corp. Preferred ADRs with my
counsel or counsel for the Company.
3. I have been advised that the issuance of
News Corp. Preferred ADRs to me pursuant to the Merger
has been registered with the Commission under the Act.
However, I have also been advised that, since at the time
the Merger was submitted for a vote of the stockholders
of the Company, I may be deemed to have been an affiliate
of the Company and the distribution by me of the News
Corp. Preferred ADRs has not been registered under the
Act, I may not sell, transfer or otherwise dispose of
News Corp. Preferred ADRs issued to me in the Merger
unless (i) such sale, transfer or other disposition has
been registered under the Act or is made in conformity
with Rule 145 under the Act, or (ii) in the opinion of
counsel reasonably acceptable to News Corp. or pursuant
to a "no action" letter obtained by the undersigned from
the staff of the Commission, such sale, transfer or other
disposition is otherwise exempt from registration under
the Act.
4. I understand that [, except as provided
for under the Registration Rights Agreement to be entered
into by News Corp., Fox and the undersigned prior to the
consummation of the transactions contemplated by the
Merger Agreement,](1) News Corp. is under no obligation
to register under the Act the sale, transfer or other
disposition of News Corp. Preferred ADRs by me or on my
behalf or to take any other action necessary in order to
make compliance with an exemption from such registration
available.
5. I understand that News Corp. will give
stop transfer instructions to News Corp.'s transfer
agents with respect to the News Corp. Preferred ADRs
received by me pursuant to the terms of the Merger
Agreement and that the certificates for such News Corp.
Preferred ADRs issued to me, or any substitutions
therefor, will bear a legend substantially to the
following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
WERE ISSUED IN A TRANSACTION TO WHICH RULE 145
UNDER THE SECURITIES ACT OF 1933 APPLIES. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
ONLY BE TRANSFERRED IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT, DATED ___________,
BETWEEN THE REGISTERED HOLDER HEREOF AND THE
NEWS CORPORATION LIMITED, A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES
OF THE NEWS CORPORATION LIMITED."
6. I also understand that unless the transfer
by me of News Corp. Preferred ADRs received pursuant to
the terms of the Merger Agreement has been registered
under the Act or is a sale made in conformity with the
provisions of Rule 145, News Corp. reserves the right to
place a legend substantially to the following effect on
the certificates issued to any transferee:
--------------------------
1 Include as appropriate.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SECURITIES IN A TRANSACTION TO
WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933
APPLIES. THE SECURITIES HAVE NOT BEEN ACQUIRED
BY THE HOLDER WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF
WITHIN THE MEANING OF THE SECURITIES ACT OF
1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OF 1933."
It is understood and agreed that the legends
set forth in paragraphs 5 and 6 above shall be removed by
delivery of substitute certificates without such legend
if such legend is not required for purposes of the Act.
It is understood and agreed that such legends and the
stop orders referred to above will be removed if (i) two
years shall have elapsed from the date the undersigned
acquired the News Corp. Preferred ADRs received in the
Merger and the provisions of Rule 145(d)(2) are then
available to the undersigned, (ii) three years shall have
elapsed from the date the undersigned acquired the News
Corp. Preferred ADRs received in the Merger and the
provisions of Rule 145(d)(3) are then available to the
undersigned, or (iii) News Corp. has received either an
opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to News Corp. or a "no action"
letter obtained by the undersigned from the staff of the
Commission, to the effect that the restrictions imposed
by Rule 145 under the Act no longer apply to the
undersigned.
Execution of this letter should not be
considered an admission on my part that I am an
"affiliate" of the Company as described in the first
paragraph of this letter.
News Corp. agrees that, for a period of at
least three years after the effective date of the Merger,
it will make publicly available the information required
by, and in the manner specified by, Rule 144(c) under the
Act.
Sincerely,
Name:----------------------
Accepted this day of
, 1996:
THE NEWS CORPORATION LIMITED
By:------------------------
Name:
Title:
EXHIBIT B-1
FORM OF LEGAL OPINION OF
SQUADRON, ELLENOFF, PLESENT & SHEINFELD, LLP,**
COUNSEL FOR NEWS CORP.
1. Fox, Merger Sub and each of the other News
Corp. Subsidiaries listed on Schedule A hereto is a
corporation validly existing and in good standing under
the laws of its respective jurisdiction of incorporation.
2. Each of Fox and Merger Sub has the
corporate power and corporate authority to enter into the
Merger Agreement and to consummate the transactions
contemplated thereby. The execution and delivery of the
Merger Agreement by each of Fox and Merger Sub and the
consummation of the transactions contemplated thereby
have been duly authorized by all requisite corporate
action on the part of each of Fox and Merger Sub. The
Merger Agreement has been executed and delivered by each
of Fox and Merger Sub and (assuming it has been duly
authorized, executed and delivered by the Company) is a
valid and binding obligation of each of Fox and Merger
Sub, enforceable against each of Fox and Merger Sub in
accordance with its terms, except (a) to the extent that
enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity) and (b) rights to
indemnification thereunder that may be limited by Federal
or state securities laws or the policies underlying such
laws.
3. The execution, delivery and performance of
the Merger Agreement by each of Fox and Merger Sub will
not result in a breach or violation of any provision of
the certificate of incorporation or by-laws of either Fox
or Merger Sub.
4. Each of the Registration Rights Agreement
and the Deposit Agreement is a valid and binding
obligation of News Corp., enforceable against News Corp.
in accordance with its terms, except to the extent that
enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
--------------------
** The Opinion shall state that the Investors (as
defined in the Registration Rights Agreement) shall
be entitled to rely upon the Opinion to the extent it
relates to the Registration Rights Agreement.
To the extent any matter in the Opinion is governed
by the laws of any jurisdiction other than New York
or Delaware, counsel may rely upon the reasonably
acceptable opinion of counsel in such other
jurisdiction.
proceeding at law or in equity). Upon the issuance by
the Depositary of the News Corp. Preferred ADRs to be
issued in the Merger against the deposit of News Corp.
Preferred Stock in accordance with the provisions of the
Deposit Agreement, such News Corp. Preferred ADRs will be
legally and validly issued and will entitle the holders
thereof to the rights specified therein and in the
Deposit Agreement.
5. The News Corp. Guaranty is a valid and
binding obligation of News Corp., enforceable against
News Corp. in accordance with its terms, except (a) to
the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles
of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity), (b)
rights to indemnification thereunder may be limited by
United States Federal or state securities laws or the
policies underlying such laws and (c) Section 205 of the
Corporations Law prohibits News Corp. from providing a
guaranty of (A) Fox's indemnification obligations under
the Merger Agreement, the Stock Purchase Agreement and
the Registration Rights Agreement and (B) Fox's
obligations to pay amounts under the Registration Rights
Agreement.
6. All consents, authorizations, approvals
and filings with any court, department, commission,
authority, board, bureau, agency or other instrumentality
of the United States, the State of New York or the State
of Delaware (the "Governmental Authorities") required to
be obtained or made by News Corp. and all consents and
filings required to be obtained or made by News Corp.
under the rules of the NYSE, in each case for the
consummation of the Merger and the issuance and sale of
the News Corp. Preferred ADRs to be issued in the Merger,
have been obtained or made, and no such consent,
authorization, approval or filing with a Governmental
Authority is required to be obtained or made to effect
dividend payments on any shares of News Corp. Preferred
Stock or for the Depositary to effect dividend payments
in U.S. dollars on any News Corp. Preferred ADRs. We
express no opinion with respect to any consents,
authorizations, approvals and filings required to be made
with the FCC.
7. The Merger will be effective upon the
filing of the Certificate of Merger with the Secretary of
State of the State of Delaware.
8. The Registration Statement has become
effective under the Securities Act, and we have been
advised by the SEC that no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the best of our knowledge, no proceeding
for that purpose has been instituted or threatened by the
SEC.
9. The statements contained the Registration
Statement under the caption ["Description of American
Depositary Receipts"] and ["Certain United States Federal
Income Tax Matters," as it relates to the News Corp.
Preferred ADRs to be issued in the Merger,] are accurate
and nothing has been omitted from such statements that
would make such statements misleading in any material
respect.
10. Each of the Registration Statement, as of
the effective date thereof, and the Proxy
Statement/Prospectus, as of the date thereof, and as of
the date hereof (in each case other than the financial
statements, schedules and other financial data included
therein, as to which we express no opinion) complies as
to form, in all material respects, with the requirements
of the Securities Act and the rules and regulations
thereunder.
In addition, nothing has come to our attention
that would lead us to believe that the Registration
Statement, at the time it 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 Proxy Statement/Prospectus, as of its date and the
date hereof (in each case, other than the financial
statements, schedules and other financial data included
therein, as to which we express no opinion), insofar as
it relates to News Corp., Fox or Merger Sub, contained or
contains an untrue statement of a material fact or
omitted or omits to state any material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading, except that we express no
opinion or belief with respect to the information
contained or incorporated by reference in the
Registration Statement or the Proxy Statement/Prospectus
to the extent such information was furnished by or
relates to the Company.
Schedule A
[to be reasonably agreed upon]
EXHIBIT B-2
FORM OF LEGAL OPINION OF
ALLEN ALLEN & HEMSLEY,***
AUSTRALIAN COUNSEL FOR NEWS CORP.
1. News Corp. and each of the News Corp.
Subsidiaries listed on Schedule A hereto is a corporation
duly incorporated under the laws of the jurisdiction set
forth opposite its respective name in Schedule A hereto
and is capable of being sued in its corporate name.
There is no application pending, or to our knowledge,
threatened for News Corp. or any of such News Corp.
Subsidiaries to be wound up, dissolved or deregistered
nor is there any application pending or, to our
knowledge, threatened for the appointment of a receiver,
receiver and manager or administrator in respect of News
Corp., the whole or any part of the assets of News Corp,
such News Corp. Subsidiaries or the whole or any part of
the assets of such News Corp. Subsidiaries.
2. All of the shares of News Corp. Preferred
Stock underlying the News Corp. Preferred ADRs to be
issued in the Merger have been duly and validly issued to
the Depositary, are fully paid and non-assessable,
conform with the description thereof in the Registration
Statement and have been admitted for quotation on the
Australian Stock Exchange. The certificates for the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued in the Merger have been
duly and validly issued and delivered to the Depositary,
and the name of the Depositary has been entered in the
Register of Shareholders of News Corp. in respect of such
shares of News Corp. Preferred Stock.
3. The issue of the shares of News Corp.
Preferred Stock underlying the News Corp. Preferred ADRs
to be issued in the Merger (a) complied with the
Corporations Law, the Memorandum and Articles of
Association of News Corp. and the Listing Rules of the
Australian Stock Exchange and (b) did not violate any
preemptive or similar rights of any holder of any equity
securities of News Corp. under the Corporations Law, the
listing rules of the ASX or the rights attaching to such
securities.
4. News Corp. has the corporate power and
corporate authority to enter into the Merger Agreement,
the News Corp. Guaranty and the Registration Rights
Agreement and to consummate the transactions contemplated
thereby. The execution and delivery of the Merger
---------------------
*** The Opinion shall state that the Investors (as
defined in the Registration Rights Agreement) shall
be entitled to rely upon the Opinion to the extent it
relates to the Registration Rights Agreement.
To the extent any matter in the Opinion is governed
by the laws of any jurisdiction other than Australia,
counsel may rely upon the reasonably acceptable
opinion of counsel in such other jurisdiction.
Agreement, the News Corp. Guaranty and the Registration
Rights Agreement by News Corp. and the consummation of
the transactions contemplated thereby have been duly
authorized by all requisite corporate action on the part
of News Corp. Each of the Merger Agreement and the
Registration Rights Agreement has been executed and
delivered by News Corp. and (assuming it has been duly
authorized, executed and delivered by the Company and the
Investors, as applicable) is a valid and binding
obligation of News Corp., enforceable against News Corp.
in accordance with its terms, except (a) to the extent
that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or
other similar laws not or hereafter in effect relating to
creditors' rights generally and (ii) general principles
of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) and (b)
rights to indemnification thereunder may be limited by
United States Federal or state securities laws or the
policies underlying such laws. The News Corp. Guaranty
is a valid and binding obligation of News Corp.,
enforceable against News Corp. in accordance with its
terms, except (a) to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws not or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity), (b) rights to
indemnification thereunder may be limited by United
States Federal or state securities laws or the policies
underlying such laws and (c) Section 205 of the
Corporations Law of South Australia prohibits News Corp.
from providing a guaranty of (A) Fox's indemnification
obligations under the Merger Agreement, the Stock
Purchase Agreement and the Registration Rights Agreement
and (B) Fox's obligations to pay amounts under the
Registration Rights Agreement.
5. The execution, delivery and performance of
the Merger Agreement, the News Corp. Guaranty and the
Registration Rights Agreement by News Corp. will not
result in a breach or violation of any provision of the
Memorandum and Articles of Association of News Corp.
6. No consents, authorizations, approvals or
filings are required to be obtained or made by News Corp.
under the laws of Australia nor are any consents or
filings required to be obtained or made by News Corp.
under the rules of the ASX, in each case for the
consummation of the Merger and the issue and sale of the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued in the Merger and the
issuance and sale of the News Corp. Preferred ADRs to be
issued in the Merger, and no such consent, authorization,
approval or filing is required to be obtained or made to
effect dividend payments on any shares of News Corp.
Preferred Stock or for the Depositary to effect dividend
payments in U.S. dollars on any News Corp. Preferred
ADRs.
7. The choice of New York law to govern the
Merger Agreement, the News Corp. Guaranty and the
Registration Rights Agreement is, under the laws of
Australia, a valid choice of law, and subject to certain
exceptions and time limitations, any final judgment for a
sum of money against News Corp. in relation to the Merger
Agreement or the Registration Rights Agreement rendered
by a competent United States Federal or New York State
court in the Borough of Manhattan, The City of New York,
New York, would be recognized and enforced by the courts
of Australia.
8. Under the laws of the Commonwealth of
Australia, the submission by News Corp. to the
jurisdiction of any United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York and the designation of the law of the
State of New York to apply to the Merger Agreement, the
News Corp. Guaranty and the Registration Rights Agreement
is binding upon News Corp. and, if properly brought to
the attention of the court in accordance with the laws of
the Commonwealth of Australia, would be enforceable in a
judicial proceeding in the Commonwealth of Australia.
9. News Corp. is not entitled to any immunity
on the basis of sovereignty or otherwise in respect of
its obligations under the Merger Agreement, the News
Corp. Guaranty or the Registration Rights Agreement and
could not impose any such immunities as a defense to any
suit or action brought or maintained in respect of its
obligations under the Merger Agreement, the News Corp.
Guaranty or the Registration Rights Agreement; and if
News Corp. were to become entitled to such immunity, News
Corp.'s waiver of immunity in Section 6.18 of the Merger
Agreement, Section 7 of the News Corp. Guaranty and
Section 8.12 of the Registration Rights Agreement is a
valid and legally binding obligation of News Corp.
10. News Corp. has the power to submit, and
has taken all necessary corporate action to submit, to
the jurisdiction of United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York, and to appoint News America Publishing
Incorporated as the authorized agent of News Corp. for
the purposes and to the extent described in Section 9.4
of the Merger Agreement, Section 8.2 of the News Corp.
Guaranty and Section 8.10 of the Registration Rights
Agreement.
11. No holder of Class B Common Stock (other
than News Corp., Merger Sub, Fox or any other News Corp.
Subsidiary) will be liable for any stamp duty or other
issuance or transfer taxes in Australia or to any taxing
authority thereof or therein in connection with (a) the
authorization, issuance, sale and delivery of the shares
of News Corp. Preferred Stock underlying the News Corp.
Preferred ADRs to be issued in the Merger, (b) the
deposit with the Depositary of the shares of News Corp.
Preferred Stock underlying the News Corp. Preferred ADRs
to be issued in the Merger, (c) the sale and delivery by
Fox of the News Corp. Preferred ADRs to be issued in the
Merger, or (d) the consummation of any other transactions
contemplated by the Merger Agreement in connection with
the issuance and sale of the shares underlying the News
Corp. Preferred Stock to be issued in the Merger and the
News Corp. Preferred ADRs to be issued in the Merger.
12. The statements contained the Registration
Statement under the captions ["Description of Capital
Stock"], ["Australian Tax Matters"] and ["Exchange
Controls and Other Limitations Affecting Security
Holders,"] and the statement regarding the enforceability
of civil liabilities against Australian persons under
["Enforceability of Judgments,"] insofar as they relate
to matters of Australian law, are accurate and nothing
has been omitted from such statements that would make
such statements misleading in any material respect.
13. The Deposit Agreement is a valid and
legally binding obligation of News Corp., enforceable
against News Corp. in accordance with its terms, except
to the extent that enforcement thereof may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or
other similar laws not or hereafter in effect relating to
creditors' rights generally and (b) general principles of
equity (regardless of whether enforcement is considered
in a proceeding at law or in equity).
Schedule A
[to be reasonably agreed upon with regard to Australian
entities only]
EXHIBIT C
FORM OF LEGAL OPINION OF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
COUNSEL FOR THE COMPANY
1. The Company and each of the Company
Subsidiaries listed on Schedule A attached hereto has
been duly incorporated and is validly existing and in
good standing under the laws of its respective
jurisdiction of incorporation.
2. The Company has the corporate power and
corporate authority to enter into the Merger Agreement
and to consummate the transactions contemplated thereby.
The execution and delivery of the Merger Agreement by the
Company and the consummation of the transactions
contemplated thereby have been duly authorized by all
requisite corporate action on the part of the Company.
The Merger Agreement has been executed and delivered by
the Company and (assuming it has been duly authorized,
executed and delivered by News Corp., Fox and Merger Sub)
is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its
terms, except (a) to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity) and (b) that rights to
indemnification thereunder may be limited by Federal or
state securities laws or the policies underlying such
laws.
3. The execution and delivery by the Company
of the Merger Agreement and the performance by the
Company of its obligations thereunder, in accordance with
its terms, do not (i) conflict with the Amended and
Restated Certificate of Incorporation or the Amended and
Restated By-laws of the Company, (ii) constitute a
violation of or a default under any Applicable Contracts
(as hereinafter defined) or (iii) cause the creation of
any security interest or lien upon any of the property of
the Company pursuant to any Applicable Contracts. We do
not express any opinion, however, as to whether the
execution, delivery or performance by the Company of the
Merger Agreement will constitute a violation of or a
default under any covenant, restriction or provision with
respect to financial ratios or tests or any aspect of the
financial condition or results of operations of the
Company. "Applicable Contracts" mean those agreements or
instruments set forth on a Schedule to a certificate
provided by the Company and which have been identified to
us.
4. Neither the execution or delivery by the
Company of the Merger Agreement nor the consummation by
the Company of the Merger in accordance with the terms
and provisions thereof will violate any Applicable Law
(as hereinafter defined). "Applicable Laws" shall mean
those laws, rules and regulations of the State of New
York, the general corporate law of the State of Delaware
and of the United States of America which, in our
experience, are normally applicable to transactions of
the type contemplated by the Merger Agreement.
5. No Governmental Approval (as hereinafter
defined), which has not been obtained or taken and is not
in full force and effect, is required to authorize or is
required in connection with the execution, delivery or
performance of the Merger Agreement by the Company,
except that we express no opinion with regard to the
securities or Blue Sky laws of the various states.
"Governmental Approval" means any consent, approval,
license, authorization or validation of, or filing,
recording or registration with, any Governmental
Authority pursuant to Applicable Laws.
6. The Proxy Statement/Prospectus of the
Company, as of the date it was mailed to stockholders of
the Company and as of the date hereof, appeared on its
face to be appropriately responsive in all material
respects to the applicable requirements of the Securities
Act and the Exchange Act and the rules and regulations
thereunder, except that, in each case, we express no
opinion or belief as to the financial statements,
schedules and other financial data included or
incorporated, or deemed to be incorporated, by reference
therein or excluded therefrom or any information to the
extent it was furnished by or relates to News Corp., Fox
or Merger Sub, and we do not assume any responsibility
for the accuracy, completeness or fairness of the
statements contained in the Proxy Statement/Prospectus.
In addition, we have participated in
conferences with officers and other representatives of
the Company, representatives of the independent public
accountants of the Company, officers and other
representatives of News Corp., counsel for News Corp. and
representatives of the independent public accountants of
News Corp., at which the contents of the Proxy
Statement/Prospectus and related matters were discussed
and, although we are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Proxy
Statement/Prospectus and have made no independent check
or verification thereof, on the basis of the foregoing,
no facts have come to our attention that have led us to
believe that, insofar as it relates to the Company, the
Proxy Statement/Prospectus, as of its date and the date
of the stockholder meeting, contained or contains an
untrue statement of a material fact or omitted or omits
to state any material fact required to be stated therein
or necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading, except that we express no opinion or belief
with respect to the financial statements, schedules and
other financial data included or incorporated, or deemed
to be incorporated, by reference in the Proxy
Statement/Prospectus or the information included or
incorporated, or deemed to be incorporated, by reference
in the Proxy Statement/Prospectus to the extent such
information was furnished by or relates to News Corp.,
Fox or Merger Sub.
Schedule A
[to be reasonably agreed upon]
EXHIBIT 2.2
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of September 24,
1996 (this "Agreement"), between NWCG (Parent) Holdings
Corporation, a Delaware corporation (the "Seller"), The News
Corporation Limited, (ACN 007 910 330) a South Australia
corporation ("News Corp."), and Fox Television Stations,
Inc., a Delaware corporation in which News Corp. has an
indirect interest (the "Purchaser").
WHEREAS, the Seller owns all of the outstanding
shares of capital stock of NWCG Holdings Corporation, a
Delaware corporation ("Holdings"), and 2,682,236 shares of
Class B Common Stock, par value $.01 per share (the "Class B
Common Stock"), of New World Communications Group
Incorporated, a Delaware corporation (the "Company").
WHEREAS, Holdings owns 34,510,000 shares of Class B
Common Stock.
WHEREAS, the Company, News Corp., the Purchaser and
Fox Acquisition Co., Inc., a Delaware corporation and a
wholly owned subsidiary of the Purchaser ("Merger Sub"), are
parties to the Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), pursuant to which
Merger Sub will be merged with and into the Company (the
"Merger").
WHEREAS, as a condition to the willingness of News
Corp., the Purchaser and Merger Sub to enter into the Merger
Agreement, and as an inducement for each of them to do so,
the Seller has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements
contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
Section 1.1 Purchase and Sale. Upon the terms and
subject to the conditions set forth herein, the Seller agrees
to sell, assign, transfer, convey and deliver to the
Purchaser, and the Purchaser agrees to purchase and accept
from the Seller, on the Closing Date (as defined below), all
of the Seller's rights, title and interest in and to all of
the outstanding shares of capital stock of Holdings (the
"Holdings Shares") and all of the shares of Class B Common
Stock owned by the Seller at the Effective Time (the "Company
Shares," and, together with the Holdings Shares, the
"Transferred Shares"), free and clear of all liens,
encumbrances and charges other than permitted Liens (as
defined below) (the "Acquisition").
Section 1.2 Purchase Price. In consideration for
the Acquisition, the Purchaser shall, in accordance with
Section 5.12, pay for, and procure the delivery to, and in
the name of, the Seller on the Closing Date of, that number
of American Depositary Shares of News Corp. (the "News Corp.
Preferred ADRs"), each of which represents four fully paid
and nonassessable Preferred Limited Voting Ordinary Shares,
par value A$.50 per share, of News Corp. (the "News Corp.
Preferred Stock"), equal to (a) the product of (i) the number
of shares of Class B Common Stock of the Company directly or
indirectly owned by the Seller or Holdings immediately prior
to the consummation of the Acquisition and (ii) 1.45 less (b)
the number determined by dividing (i) the accreted value as
of the Closing Date of the Senior Notes due 1999 of Holdings
(the "Holdings Notes") minus $10 million by (ii) $18.625.
ARTICLE II
THE CLOSING
Section 2.1 Closing Date. Subject to the
satisfaction or waiver of all of the conditions to closing
contained in Article VI, the consummation of the Acquisition
(the "Closing") shall take place immediately prior to, and at
the same place as, the closing of the Merger (the date of the
Closing being herein referred to as the "Closing Date").
Section 2.2 Transactions To Be Effected at the
Closing. At the Closing:
(a) the Seller shall deliver to the Purchaser
certificates representing the Transferred Shares, duly
endorsed in blank, or accompanied by stock powers duly
executed in blank, by the Seller; and
(b) the Purchaser shall procure the delivery
to the Seller of certificates registered in the Seller's name
for the number of News Corp. Preferred ADRs representing the
Purchase Price as determined pursuant to Section 1.2.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller represents and warrants to News Corp.
and the Purchaser as follows:
Section 3.1 Organization and Qualifications. Each
of the Seller and Holdings is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and
authority and all governmental permits, approvals and other
authorizations necessary to own, lease and operate its
properties and to carry on its business as it is now being
conducted, except where the failure to be so organized,
existing or in good standing or to have such power, authority
and governmental permits, approvals and other authorizations
would not, individually or in the aggregate, have a material
adverse effect on the business, assets, financial or other
condition, or results of operations of the Seller and
Holdings, taken as a whole (a "Seller Material Adverse
Effect").
Section 3.2 Capitalization. The authorized
capital stock of Holdings consists of 1,000 shares of common
stock, par value $.01 per share (the "Holdings Common
Stock"), and 1,000 shares of preferred stock, par value $.01
per share ("Holdings Preferred Stock"), of which 100 shares
of Holdings Common Stock are issued and outstanding and no
shares of Holdings Preferred Stock are issued and
outstanding. There are no options or agreements to which the
Seller, Holdings, Ronald O. Perelman or any entity, other
than the Company and its Subsidiaries (as defined below),
controlled, directly or indirectly, by Ronald O. Perelman
(the "Perelman Affiliates") are a party obligating the
Seller, Holdings, Ronald O. Perelman or any Perelman
Affiliate to issue, transfer, grant or sell any shares of
capital stock of, or other equity interests in, or securities
convertible into or exchangeable for any capital stock or
other equity interests in, Holdings or the Company.
Section 3.3 Title to Stock. Except as set forth
in Section 3.3 of the letter from the Seller, dated as of the
date hereof, addressed to News Corp. and the Purchaser (the
"Seller Disclosure Letter"), the Seller owns as of the date
hereof all of the outstanding shares of Holdings Common Stock
and 2,682,236 shares of Class B Common Stock free and clear
of any security interests, liens, claims, pledges, options,
rights of first refusal, agreements, limitations on voting
rights, charges and other encumbrances of any nature
whatsoever (collectively, "Liens"). At the Closing, the
Purchaser will acquire good and marketable title to the
Transferred Shares free and clear of any Liens, other than
the Lien on the Holdings Shares securing the Holdings Notes.
Except as set forth in Section 3.3 of the Seller Disclosure
Letter, Holdings owns as of the date hereof 34,510,000 shares
of Class B Common Stock, which shares are free and clear of
any Liens. Except as set forth in this Section 3.3 and
except for warrants to purchase 1,500,000 shares of Class B
Common Stock, neither the Seller, Holdings, Ronald O.
Perelman nor any Perelman Affiliate owns any shares of
capital stock of the Company.
Section 3.4 Authority Relative to This Agreement.
The Seller has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions
contemplated hereby (the "Transactions"). The execution and
delivery of this Agreement by the Seller and the consummation
by the Seller of the Transactions have been duly and validly
authorized by all necessary corporate action and no other
corporate proceedings on the part of the Seller are necessary
to authorize this Agreement or to consummate the
Transactions. This Agreement has been duly and validly
executed and delivered by the Seller and, assuming the due
authorization, execution and delivery thereof by News Corp.
and the Purchaser, constitutes the legal, valid and binding
obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and by
equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief are
subject and except that rights to indemnity hereunder may be
subject to Federal or state securities laws or the policies
underlying such laws.
Section 3.5 No Conflict; Required Filings and
Consents. (a) Except as set forth in Section 3.5 of the
Seller Disclosure Letter, the execution and delivery of this
Agreement by the Seller do not, and the performance of its
obligations under this Agreement and the consummation of the
Transactions by the Seller will not, (i) conflict with or
violate the certificate of incorporation or bylaws or
equivalent organizational documents of the Seller or
Holdings, (ii) subject to the making of the filings and
obtaining the approvals identified in Section 3.5(b),
conflict with or violate any law, rule, regulation, order,
judgment or decree (collectively, "Laws") applicable to the
Seller or Holdings or by which any property or asset of the
Seller or Holdings is bound or affected, or (iii) subject to
the making of the filings and obtaining the approvals
identified in Section 3.5(b), conflict with or result in any
breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default)
under, result in the loss (by the Seller or Holdings) or
modification in a manner materially adverse to the Seller and
Holdings of any material right or benefit under, or give to
others any right of termination, amendment, acceleration,
repurchase or repayment, increased payments or cancellation
of, or result in the creation of any Liens on any property or
asset of the Seller or Holdings pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license,
permit, franchise, or other instrument or obligation
(collectively, "Contracts"), to which the Seller or Holdings
is a party or by which the Seller or Holdings or any property
or asset of the Seller or Holdings is bound or affected,
except, in the case of clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay in any material
respect consummation of the Transactions, or otherwise,
individually or in the aggregate, prevent the Seller from
performing its obligations under this Agreement in any
material respect, and would not, individually or in the
aggregate, have a Seller Material Adverse Effect.
(b) The execution and delivery of this
Agreement by the Seller do not, and the performance of its
obligations under this Agreement and the consummation of the
Transactions by the Seller will not, require any consent,
approval, authorization or permit of, or filing with or
notification to, any federal, state or local governmental or
regulatory agency, authority, commission or instrumentality,
whether domestic or foreign (each a "Governmental Entity"),
except (i) for (A) applicable requirements, if any, of the
Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and state securities or "blue sky" laws
("Blue Sky Laws"), (B) the pre-merger notification
requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act") and (C) approval of the
Transactions by the Federal Communications Commission (the
"FCC") under the Communications Act of 1934, as amended (the
"Communications Act"), and the rules and regulations of the
FCC promulgated thereunder (the "FCC Rules") and (ii) where
the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate,
prevent or delay in any material respect consummation of the
Transactions, or otherwise prevent the Seller from performing
its obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a
Seller Material Adverse Effect.
Section 3.6 SEC Reports and Financial Statements.
Each form, report, schedule, registration statement and
definitive proxy statement filed by Holdings with the
Securities and Exchange Commission (the "SEC") since December
31, 1994 and prior to the date hereof (as such documents have
been amended prior to the date hereof, collectively, the
"Holdings SEC Reports"), as of their respective dates,
complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and
the rules and regulations thereunder. None of the Holdings
SEC Reports, as of their respective dates, contains any
untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading,
except for such statements, if any, as have been modified or
superseded by subsequent filings prior to the date hereof.
The financial statements of Holdings included in such reports
comply as to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated
in the notes thereto or, in the case of the unaudited interim
financial statements, as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited
interim financial statements, to normal, year-end audit
adjustments) the financial position of Holdings as at the
dates thereof and the results of its operations and cash
flows for the periods then ended. Since June 30, 1996,
Holdings has not incurred any liabilities or obligations
(whether absolute, accrued, fixed, contingent, liquidated,
unliquidated or otherwise and whether due or to become due)
of any nature, except liabilities, obligations or
contingencies (a) which are reflected on the unaudited
balance sheet of Holdings as at June 30, 1996 (including the
notes thereto), or (b) which (i) were incurred in the
ordinary course of business after June 30, 1996 and
consistent with past practices, (ii) are disclosed in the
Holdings SEC Reports filed after June 30, 1996 or (iii) would
not, individually or in the aggregate, have a Seller Material
Adverse Effect. Since June 30, 1996, there has been no
change in any of the significant accounting (including tax
accounting) policies, practices or procedures of Holdings.
Holdings has no direct subsidiaries other than the Company.
Section 3.7 Absence of Certain Changes or Events.
Except for the Holdings Notes, Holdings does not have any
material liabilities or obligations. Holdings has no
agreement, arrangement or understanding with King World
Productions, Inc. ("King World") pursuant to which Holdings
is obligated to make any payment to King World as a result of
recent discussions regarding a possible transaction between
the Company and King World. Holdings has conducted no
operations other than in connection with the Holdings Shares
and the Holdings Notes.
Section 3.8 Taxes. Except as set forth in Section
3.8 of the Seller Disclosure Letter:
(a) Holdings has timely filed (or has had
timely filed on its behalf) or will timely file or cause to
be timely filed, all material Tax Returns required by
applicable Law to be filed by it prior to or as of the
Effective Time. All such Tax Returns and amendments thereto
are, or will be before the Effective Time, true, complete and
correct in all material respects.
(b) Holdings has paid (or has had paid on its
behalf), or where payment is not yet due, has established (or
have had established on its behalf and for its sole benefit
and recourse), or will establish or cause to be established
on or before the Effective Time, an adequate reserve for the
payment of, all material Taxes due with respect to any period
ending prior to or as of the Effective Time.
(c) No deficiency or adjustment for any
material Taxes has been proposed, asserted or assessed
against Holdings, that has not been resolved or paid or for
which an adequate reserve has not been established in
accordance with generally accepted accounting principles.
There are no Liens for material Taxes upon the assets of
Holdings, except Liens for current Taxes not yet due.
(d) Holdings has not filed a consent under
section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code").
(e) Holdings has not waived any statute of
limitations with respect to Taxes or agreed to any extension
of time with respect to a Tax assessment, Tax deficiency or
Tax Return. There are no Tax Returns of Holdings which are
currently the subject of an audit.
(f) All Tax allocations or Tax sharing
agreements to which Holdings is a party shall be cancelled
immediately prior to the Closing Date.
(g) Since July 17, 1996 neither the Company
nor any of its Subsidiaries (as defined in the Merger
Agreement) has taken any action, nor will take any action,
that would cause the acquisition of the Company pursuant to
the Merger Agreement and this Agreement to fail to qualify
for the exceptions described in former Treas. Regs.
SECTION 1.1502-13(f)(2)(i), Treas. Regs. SECTION 1.1502-13(j)(5),
former Treas. Regs. SECTION 1.1502-19(g)(1) and Treas. Regs.
SECTION 1.1502-19(c)(3), other than the Transactions (as defined
in the Merger Agreement).
(h) For purposes of this Agreement, the
following terms shall have the following meanings:
(i) "Taxes" shall mean all Federal,
state, local and foreign taxes, and other
assessments of a similar nature (whether imposed
directly or through withholding), including (A) any
interest, additions to tax, or penalties applicable
thereto or with respect to Tax Returns and (B) any
liabilities under Treasury Regulations section
1.1502-6.
(ii) "Tax Returns" shall mean all
Federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms
and information returns and any amended tax return
relating to Taxes.
Section 3.9 Litigation. Except as set forth in
Section 3.9 of the Seller Disclosure Letter or as disclosed
in the Holdings SEC Reports filed since December 31, 1995,
there are no claims, suits, actions or proceedings pending
or, to the Seller's knowledge, threatened or contemplated,
nor are there any investigations or reviews by any
Governmental Entity pending or, to the Seller's knowledge,
threatened or contemplated, against, relating to or affecting
the Seller or Holdings, which could reasonably be expected to
have, individually or in the aggregate, a Seller Material
Adverse Effect, or to prohibit or materially restrict the
consummation of the Transactions, nor is there any judgment,
decree, order, injunction, writ or rule of any court,
governmental department, commission, agency, instrumentality
or authority or any arbitrator outstanding against the Seller
or Holdings having, or which, insofar as can be reasonably
foreseen, in the future is likely to have, any such Seller
Material Adverse Effect. In addition, there have not been
any developments with respect to any of the claims, suits,
actions, proceedings, investigations or reviews disclosed in
the Holdings SEC Reports which, insofar as can be reasonably
foreseen, in the future are likely to have a Seller Material
Adverse Effect.
Section 3.10 Registration Statement. The
information supplied or to be supplied by Holdings and its
Representatives (as defined in Section 5.4) for inclusion in
the Registration Statement (as defined in Section 5.8) will
not, either at the time the Registration Statement is filed
with the SEC, at the time any amendment thereof or supplement
thereto is filed with the SEC, or at the time it becomes
effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading.
Section 3.11 Broker's Fees. No investment banker,
broker or finder is entitled to a commission or fee from the
Seller or Holdings in respect of this Agreement based upon
any arrangement or agreement made by or on behalf of the
Seller or Holdings, except as otherwise provided in the
Merger Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF NEWS CORP.
News Corp. hereby represents and warrants to the
Seller as follows:
Section 4.1 Organization and Qualifications;
Subsidiaries.
(a) Each of News Corp. and each Material News
Corp. Subsidiary (as defined below) is a corporation,
partnership or other legal entity duly incorporated or
organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its
incorporation or organization and has the requisite power and
authority and all necessary governmental permits, approvals
and other authorizations necessary to own, lease and operate
its properties and to carry on its business as it is now
being conducted, except where the failure to be so organized,
existing or, if applicable, in good standing or to have such
power, authority and governmental permits, approvals and
other authorizations would not, individually or in the
aggregate, have a material adverse effect on the business,
assets, financial or other condition, or results of
operations of News Corp. and the Subsidiaries (as defined
below) of News Corp., and Twentieth Holdings Corporation and
its Subsidiaries, including, without limitation, the
Purchaser (each, a "News Corp. Subsidiary"), taken as a whole
(a "News Corp. Material Adverse Effect").
(b) The Purchaser and each News Corp.
Subsidiary that (i) constitutes a Significant Subsidiary of
News Corp. within the meaning of Rule 1-02 of Regulation S-X
of the SEC, (ii) owns the material assets of or is the
licensee of a United States broadcast television station, or
(iii) is otherwise material to the business or operations of
News Corp. and the News Corp. Subsidiaries, taken as a
whole, is referred to herein as a "Material News Corp.
Subsidiary." For purposes of this Agreement, a "Subsidiary"
of any person means (A) a corporation in which such person, a
subsidiary of such person, or such person and one or more
subsidiaries of such person, directly or indirectly, at the
date of determination, has either (i) a majority ownership
interest or (ii) the power, under ordinary circumstances, to
elect, or to direct the election of, a majority of the board
of directors of such corporation or (B) a partnership in
which such person, a subsidiary of such person, or such
person and one or more subsidiaries of such person (i) is, at
the date of determination, a general partner of such
partnership, or (ii) has a majority ownership interest in
such partnership or the right to elect, or to direct the
election of, a majority of the governing body of such
partnership, or (C) any other person (other than a
corporation or a partnership) in which such person, a
subsidiary of such person, or such person and one or more
subsidiaries of such person has either (i) at least a
majority ownership interest or (ii) the power to elect, or to
direct the election of, a majority of the directors or other
governing body of such person.
Section 4.2 Capitalization. The authorized
capital stock of News Corp. consists of 5,000,000,000 shares
of A$.50 each, of which, as of June 30, 1996, 1,940,029,769
were designated as Ordinary Shares, par value A$.50 each (the
"News Corp. Ordinary Shares"), and were issued and
outstanding, 977,363,617 were designated as News Corp.
Preferred Stock and were issued and outstanding, and
25,000,000 were designated as 6.25% Convertible Preference
Shares, par value A$.50 each (the "News Corp. Convertible
Stock"), and were issued and outstanding. All of such shares
were validly issued, fully paid and nonassessable. As of
June 30, 1996, (a) an aggregate of 2,598,530 options ("News
Corp. Options") over Ordinary Shares were outstanding under
News Corp. Executives' Share Option Scheme (the "Executive
Scheme"), (b) an aggregate of 1,299,265 News Corp. Options
over News Corp. Preferred Stock were outstanding under the
Executive Scheme, (c) an aggregate of 5,335,319 News Corp.
Options over News Corp. Ordinary Shares were outstanding
under News Corp. Share Option Plan (the "Plan"), (d) an
aggregate of 4,892,659 News Corp. Options over News Corp.
Preferred Stock were outstanding under the Plan, (e) warrants
to purchase an aggregate of 209,708,738 News Corp. Ordinary
Shares (the "News Corp. Warrants") were outstanding, (f)
209,708,738 News Corp. Ordinary Shares were reserved for
issuance upon exercise of News Corp. Warrants, (g) 4,690,938
News Corp. Ordinary Shares and 2,345,469 shares of News Corp.
Preferred Stock were reserved for issuance upon conversion of
Zero Coupon Exchangeable Notes due March 2002, (h) 85,356,000
News Corp. Ordinary Shares and 42,678,000 shares of News
Corp. Preferred Stock were reserved for issuance upon
conversion of Liquid Yield Option Notes (LYON's) due March
11, 2013, and (i) 25,000,000 News Corp. Ordinary Shares and
12,500,000 shares of News Corp. Preferred Stock were reserved
for issuance upon conversion of News Corp. Convertible Stock
on September 13, 1998 (the "Conversion Date"), provided News
Corp. Ordinary Share price is A$21.62 per share or greater on
the Conversion Date. (If the News Corp. Ordinary Share price
is below A$21.62 per share the number of shares to be issued
on conversion will be determined by dividing the adjusted
share price into A$500 million. The adjusted share price
will be calculated as 92.5% of the weighted average sale
price during the 10 trading days prior to the Conversion
Date.) Except as set forth above, as of June 30, 1996, no
shares of capital stock or other voting securities of News
Corp. were issued, reserved for issuance or outstanding and,
since such date, no shares of capital stock or other voting
securities or options in respect thereof have been issued
except (x) upon the exercise of News Corp. Stock Options
outstanding on June 30, 1996 or (y) upon the conversion of
convertible securities or upon the exercise of News Corp.
Warrants, in each case outstanding on June 30, 1996. Except
as set forth above, and except with respect to agreements
between News Corp. and MCI Communications Corporation and the
Scheme of Arrangement involving News Corp. and News
International plc, the terms of which were previously
disclosed to the Company, and except as contemplated herein,
as of June 30, 1996 (i) there are no options or agreements
relating to the issued or unissued capital stock of News
Corp. or any News Corp. Subsidiary, or obligating News Corp.
or any News Corp. Subsidiary to issue, transfer, grant or
sell any shares of capital stock of, or other equity
interests in, or securities convertible into or exchangeable
for any capital stock or other equity interests in, News
Corp. or any News Corp. Subsidiary, (ii) there are no
outstanding contractual obligations of News Corp. or any News
Corp. Subsidiary to repurchase, redeem or otherwise acquire
any shares of News Corp. capital stock or any shares of
capital stock of any News Corp. Subsidiary, (iii) the
shareholders of News Corp. have no preemption rights with
respect to the News Corp. Preferred Shares underlying the
News Corp. Preferred ADRs to be delivered pursuant to this
Agreement and (iv) the issuance of the News Corp. Preferred
Shares underlying the News Corp. Preferred ADRs to be
delivered by the Purchaser pursuant to this Agreement will
not result in an adjustment of the exercise price or number
of shares issuable upon exercise in respect of any options,
warrants or convertible securities of News Corp.
Section 4.3 Validity of News Corp. Preferred Stock
and News Corp. Preferred ADRs. The News Corp. Preferred ADRs
to be delivered pursuant to this Agreement will be issued by
the Depositary (as defined in Section 5.12) under the terms
of the Deposit Agreement (as defined in Section 5.12). All
of the shares of News Corp. Preferred Stock underlying News
Corp. Preferred ADRs to be delivered pursuant to this
Agreement, when paid for by Fox and deposited in accordance
with Section 5.12 and the terms of the Deposit Agreement,
will be duly authorized, validly issued, fully paid and
nonassessable, and free and clear of any Liens. Upon the due
issuance by the Depositary of News Corp. Preferred ADRs
evidencing News Corp. Preferred Stock against the deposit of
News Corp. Preferred Stock in accordance with the terms of
the Deposit Agreement, the News Corp. Preferred ADRs to be
delivered pursuant to this Agreement will be duly and validly
issued and persons in whose names such News Corp. Preferred
ADRs are registered will be entitled to the rights of
registered holders of News Corp. Preferred ADRs specified
therein and in the Deposit Agreement, and such News Corp.
Preferred ADRs will conform in all material respects to the
description of News Corp. Preferred ADRs contained in the
Registration Statement. The Deposit Agreement has been duly
and validly authorized by all necessary corporate action of
News Corp., and, assuming the due authorization, execution
and delivery thereof by the Depositary, has been duly and
validly executed and delivered by News Corp., and constitutes
the legal, valid and binding obligation of News Corp.,
enforceable against News Corp. in accordance with its terms,
except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to
creditors' rights generally and by equitable principles to
which the remedies of specific performance and injunctive and
similar forms of relief are subject. The Seller will not be
liable for any stamp duty or other issuance or transfer taxes
or duties in connection with (a) the issuance and delivery of
the News Corp. Preferred Stock underlying the News Corp.
Preferred ADRs to be delivered pursuant this Agreement, (b)
the deposit with the Custodian of the News Corp. Preferred
Stock underlying the News Corp. Preferred ADRs to be
delivered pursuant to this Agreement, (c) the issuance and
delivery of the News Corp. Preferred ADRs to be delivered
pursuant to this Agreement or (d) the consummation of any
other Transaction.
Section 4.4 Authority Relative to This Agreement.
(a) Each of News Corp. and the Purchaser has all necessary
corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to
consummate the Transactions.
(b) The execution and delivery of this
Agreement by News Corp. and the Purchaser and the
consummation by News Corp. and the Purchaser of the
Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings
on the part of News Corp. or the Purchaser are necessary to
authorize this Agreement or to consummate the Transactions.
This Agreement has been duly and validly executed and
delivered by News Corp. and the Purchaser and, assuming the
due authorization, execution and delivery thereof by the
Seller, constitutes the legal, valid and binding obligation
of each of News Corp. and the Purchaser, enforceable against
News Corp. and the Purchaser in accordance with its terms,
except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to
creditors' rights generally and by equitable principles to
which the remedies of specific performance and injunctive and
similar forms of relief are subject and except that rights to
indemnity hereunder may be subject to Federal or state
securities laws or the policies underlying such laws.
Section 4.5 No Conflict; Required Filings and
Consents. (a) The execution and delivery of this Agreement
by News Corp. and the Purchaser do not, and the performance
of their respective obligations under this Agreement and the
consummation of the Transactions by News Corp. and the
Purchaser will not, (i) conflict with or violate the articles
of incorporation or bylaws or equivalent organizational
documents of News Corp., the Purchaser or any other Material
News Corp. Subsidiary, (ii) subject to making the filings and
obtaining the approvals identified in Section 4.5(b),
conflict with or violate any Law applicable to News Corp.,
the Purchaser or any other Material News Corp. Subsidiary or
by which any property or asset of News Corp., the Purchaser
or any other Material News Corp. Subsidiary is bound or
affected, or (iii) subject to making the filings and
obtaining the approvals identified in Section 4.5(b),
conflict with or result in any breach of or constitute a
default (or an event which with notice or lapse of time or
both would become a default) under, result in the loss (by
News Corp., the Purchaser or any other Material News Corp.
Subsidiary) or modification in a manner materially adverse to
News Corp., the Purchaser and the other News Corp.
Subsidiaries of a material right or benefit under, or give to
others any right of termination, amendment, acceleration,
repurchase or repayment, increased payments or cancellation
of, or result in the creation of any Liens on any property or
asset of News Corp., the Purchaser or any other Material News
Corp. Subsidiary pursuant to, any Contract to which News
Corp., the Purchaser or any other Material News Corp.
Subsidiary is a party or by which News Corp., the Purchaser
or any other Material News Corp. Subsidiary or any property
or asset of News Corp., the Purchaser or any other Material
News Corp. Subsidiary is bound, except, in the case of
clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not
prevent or delay in any material respect consummation of the
Transactions, or otherwise, individually or in the aggregate,
prevent News Corp. or the Purchaser from performing their
respective obligations under this Agreement in any material
respect, and would not, individually or in the aggregate,
have a News Corp. Material Adverse Effect. No authorization,
approval or consent of any Governmental Entity in Australia
is currently required to effect dividend payments on the News
Corp. Preferred Shares to be delivered to the Custodian
pursuant to Section 5.12 or for the Depositary to effect
dividend payments on the News Corp. Preferred ADRs to be
delivered by the Purchaser pursuant to this Agreement.
(b) Except as set forth in Section 4.5 of
the disclosure letter from News Corp., dated the date hereof,
addressed to the Seller (the "News Corp. Disclosure Letter"),
the execution and delivery of this Agreement by News Corp.
and the Purchaser do not, and the performance of their
respective obligations under this Agreement and the
consummation of the Transactions by News Corp. and the
Purchaser will not, require any consent, approval,
authorization or permit of, or filing with or notification
to, any Governmental Entity, except (i) for (A) applicable
requirements, if any, of the Exchange Act, the Securities Act
or the Blue Sky Laws, (B) the pre-merger notification
requirements of the HSR Act, (C) the approval of the
Transactions by the FCC under the Communications Act and the
FCC Rules, and (D) the filing of listing applications and the
filing of an application for quotation with the stock
exchanges on which News Corp. Preferred Stock and News Corp.
Preferred ADRs are listed or quoted, and (ii) where the
failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not,
individually or in the aggregate, prevent or delay in any
material respect consummation of the Transactions, or
otherwise prevent News Corp. or the Purchaser from performing
its obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a News
Corp. Material Adverse Effect.
Section 4.6 SEC Reports and Financial Statements.
Each form, report, schedule and registration statement filed
by News Corp. with the SEC since December 31, 1994 and prior
to the date hereof (as such documents have been amended prior
to the date hereof, the "News Corp. SEC Reports"), as of
their respective dates, complied in all material respects
with the applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations thereunder.
None of the News Corp. SEC Reports, as of their respective
dates, contained any 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, in the
light of the circumstances under which they were made, not
misleading, except for such statements, if any, as have been
modified or superseded by subsequent filings prior to the
date hereof. The consolidated financial statements of News
Corp. and the News Corp. Subsidiaries included in such
reports have been prepared in accordance with Australian
generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as
may be indicated in the notes thereto) and give a true and
fair view (subject, in the case of the unaudited interim
financial statements, to normal, year-end audit adjustments)
of the consolidated financial position of News Corp. and the
News Corp. Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for
the periods then ended, and such financial statements and the
reconciliations to United States generally accepted
accounting principles comply as to form in all material
respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect
thereto. Since March 31, 1996, neither News Corp. nor any of
the News Corp. Subsidiaries has incurred any liabilities or
obligations (whether absolute, accrued, fixed, contingent,
liquidated, unliquidated or otherwise and whether due or to
become due) of any nature, except liabilities, obligations or
contingencies (a) which are reflected on the unaudited
balance sheet of News Corp. and the News Corp. Subsidiaries
as at March 31, 1996 (including the notes thereto), or
(b) which (i) were incurred in the ordinary course of
business after March 31, 1996 and consistent with past
practices, (ii) are disclosed in the News Corp. SEC Reports
filed after March 31, 1996 or (iii) would not, individually
or in the aggregate, have a News Corp. Material Adverse
Effect. Since March 31, 1996, there has been no change in
any of the significant accounting (including tax accounting)
policies, practices or procedures of News Corp. or any News
Corp. Material Subsidiary.
Section 4.7 Absence of Certain Changes or Events.
Except as contemplated by this Agreement or as disclosed in
any News Corp. SEC Report, since March 31, 1996, (a) News
Corp. and the News Corp. Subsidiaries have conducted their
respective businesses only in the ordinary course, consistent
with past practice, and have not taken any of the actions set
forth in Section 5.2 hereof, and (b) there has not occurred
or arisen any event that, individually or in the aggregate,
has had or, insofar as reasonably can be foreseen, is likely
in the future to have, a News Corp. Material Adverse Effect,
other than events or developments generally affecting the
industry in which News Corp. and the News Corp. Subsidiaries
operate.
Section 4.8 Litigation. Except as disclosed in
Section 4.8 of the News Corp. Disclosure Letter or in the
News Corp. SEC Reports, there are no claims, suits, actions
or proceedings pending or, to News Corp.'s knowledge,
threatened or contemplated, nor are there any investigations
or reviews by any Governmental Entity pending or, to News
Corp.'s knowledge, threatened or contemplated, against,
relating to or affecting News Corp. or any of the News Corp.
Subsidiaries, which could reasonably be expected to have,
individually or in the aggregate, a News Corp. Material
Adverse Effect, or to prohibit or materially restrict the
consummation of the Transactions, nor is there any judgment,
decree, order, injunction, writ or rule of any court,
governmental department, commission, agency, instrumentality
or authority or any arbitrator outstanding against News Corp.
or any News Corp. Subsidiary having, or which, insofar as can
be reasonably foreseen, in the future is likely to have, any
such News Corp. Material Adverse Effect. In addition, there
have not been any developments with respect to any of the
claims, suits, actions, proceedings, investigations or
reviews disclosed in the News Corp. SEC Reports filed prior
to the date hereof which, insofar as can be reasonably
foreseen, in the future are likely to have a News Corp.
Material Adverse Effect.
Section 4.9 Registration Statement. The
information supplied or to be supplied by News Corp., any
News Corp. Subsidiary or their respective Representatives for
inclusion in the Registration Statement will not, either at
the time the Registration Statement is filed with the SEC, at
the time any amendment thereof or supplement thereto is filed
with the SEC, or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Registration Statement, other than as to
information supplied by the Seller or its Representatives,
will comply in all material respects with the provisions of
the Securities Act and the rules and regulations promulgated
thereunder.
Section 4.10 FCC Qualification. Except as
expressly contemplated by the third sentence of Section
5.3(b), (a) the Purchaser is, for purposes of obtaining the
approval of the FCC under the Communications Act, legally,
financially and otherwise qualified to acquire control of the
Company, and (b) after due investigation, neither News Corp.
nor the Purchaser is aware of any other facts or
circumstances that might prevent or delay the prompt approval
of the FCC under the Communications Act.
Section 4.11 Brokers. No broker, finder,
investment banker or other person is entitled to any
brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on
behalf of News Corp. or the Purchaser.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business of the Seller and
Holdings Pending the Closing. The Seller covenants and
agrees that (a) until the Closing, (i) the Seller will cause
Holdings not to issue or authorize the issuance of, grant or
otherwise create any additional shares of, or any options to
acquire any shares of, its capital stock or any debt or
equity securities convertible into or exchangeable for such
capital stock and (ii) except as set forth in Section 5.1 of
the Seller Disclosure Letter or except as contemplated by
this Agreement, the Seller will not, and will cause Holdings
not to, sell, pledge or otherwise dispose of any capital
stock of Holdings or the Company and (b) as of the Closing,
the Seller will cause Holdings not to have any liabilities or
obligations other than the Holdings Notes, liabilities and
obligations under the Indenture, dated as of June 30, 1994,
as amended and restated, as in effect on the date hereof,
between Holdings and Nationsbank of Georgia, N.A., as Trustee
(the "Indenture"), and those immaterial liabilities and
obligations incurred in the ordinary course of business in
connection with maintaining the corporate existence of
Holdings, in connection with and reasonably incident to
Holding's obligations under the Holdings Notes and the
Indenture, or which are set forth in Section 5.1 of the
Seller Disclosure Letter.
Section 5.2 Conduct of Business of the Purchaser
and News Corp. Pending the Closing. Each of the Purchaser
and News Corp. covenants and agrees that, except as expressly
permitted or contemplated by this Agreement, until the
Effective Time, unless the Seller shall otherwise agree in
writing prior to the taking of any action otherwise
prohibited by the terms of this Section 5.2, News Corp.
shall, and shall cause each News Corp. Subsidiary (other than
the Purchaser and its Subsidiaries) to, and the Purchaser
shall, and shall cause its Subsidiaries to, conduct its
operations and business in the ordinary and usual course of
business. Without limiting the generality of the foregoing,
and except as otherwise expressly permitted or contemplated
by this Agreement, prior to the Effective Time, without the
prior written consent of the Seller, which consent will not
be unreasonably withheld, News Corp. will not, and will cause
each News Corp. Subsidiary (other than the Purchaser and its
Subsidiaries) not to, and the Purchaser will not, and will
cause its Subsidiaries not to (a) amend its articles of
association or by-laws or equivalent organizational documents
in any manner that would be adverse to the holders of News
Corp. capital stock, or, unless appropriate adjustment is
made in the Exchange Ratio (as defined in the Merger
Agreement), subdivide, reclassify, recapitalize, split,
combine or exchange any of its shares of capital stock, or
(b) take, or permit any affiliate to take, any action that is
reasonably likely to delay, or adversely impact, the approval
by any Governmental Entity of the Transactions contemplated
hereby.
Section 5.3 Governmental Approvals. (a) As
promptly as practicable after the execution of this
Agreement, if required, News Corp., the Purchaser and the
Seller shall file notification reports under the HSR Act and
shall request early termination of the waiting period under
the HSR Act. News Corp., the Purchaser and the Seller shall
request early termination of the waiting period under the HSR
Act and use their commercially reasonable efforts to obtain
clearance or authorization under the HSR Act of the
transactions contemplated by this Agreement and the Merger
Agreement at the earliest practicable time.
(b) The Purchaser and the Company have
jointly filed with the FCC all requisite applications and
other necessary documents to obtain approval of the
Transactions by the FCC. The Seller, News Corp. and the
Purchaser shall cooperate and use their commercially
reasonable efforts to obtain all required consents and
approvals (including approvals of the FCC to the transfer of
control of the entities that are controlled by the Seller and
hold licenses issued by the FCC) and consents from
governmental agencies and third parties, including, without
limitation, taking all action necessary, including
commitments by News Corp., the Purchaser and their
Subsidiaries to divest WITI, Channel 6, Milwaukee, Wisconsin,
if necessary in order to comply with the FCC's present rules.
Notwithstanding the foregoing, the Purchaser will not be
required to take any action to reduce the percentage of U.S.
television households served by stations in which the
Purchaser or its Subsidiaries have an attributable interest
below 35%, as computed pursuant to the FCC's present rules,
to the extent that such excess is due to (i) the Company's
failure to divest the assets of KNSD, Channel 39, San Diego,
California pursuant to the Asset Purchase Agreement, dated as
of May 22, 1996, with National Broadcasting Company, Inc.
("NBC") with respect to the sale to NBC or another buyer on
similar terms of all of the assets related to KNSD-TV,
Channel 39, San Diego, California (such agreement, together
with the Asset Purchase Agreement, dated as of May 22, 1996,
with NBC with respect to the sale to NBC of all of the assets
related to WVTM-TV Channel 13, Birmingham, Alabama, being
referred to collectively as the "NBC Agreements"), or (ii)
changes in the current FCC attribution or multiple ownership
rules that result in an FCC attribution to the Purchaser of
interests held by the Purchaser as of July 17, 1996 if such
interests were not attributed to the Purchaser as of such
date.
Section 5.4 Access to Information. Subject to
applicable law, from the date hereof to the Effective Time,
the Seller shall (and shall cause its Subsidiaries and
officers, directors, employees, auditors and agents to)
afford the officers, employees, auditors and agents (the
"Representatives") of News Corp. and the Purchaser reasonable
access at reasonable times to its officers, employees,
agents, properties, offices, plants and other facilities,
books, records and Tax Returns, provided, that the Seller
and its affiliates shall not be required to make available
any of their Tax Returns or information set forth therein
except for such information as relates exclusively to
Holdings, and shall furnish such Representatives with all
financial, operating and other data and information as may be
reasonably requested. All information obtained will be
subject to the Confidentiality Agreement among the Company,
News Corp., Holdings and the Seller, dated as of July 17,
1996 (the "Confidentiality Agreement").
Section 5.5 Further Action, Reasonable Efforts.
(a) Upon the terms and subject to the conditions hereof,
each of the parties hereto shall use commercially reasonable
efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the Transactions, including,
without limitation, using commercially reasonable efforts to
obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental
Entities, make all filings and required submissions with
Governmental Entities, including foreign filings and
submissions, and obtain all consents and approvals from
parties to Contracts with the parties to this Agreement or
their respective Subsidiaries as are necessary for the
consummation of the Transactions. In case at any time after
the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the
proper officers and directors of the parties to this
Agreement or their respective Subsidiaries shall use their
reasonable efforts to take all such action.
(b) Each of the parties to this Agreement and
their respective Subsidiaries shall use its commercially
reasonable efforts not to take any action, or enter into any
transaction, which would result in a breach of any
representation, warranty, covenant or agreement made by such
party in this Agreement.
Section 5.6 Public Announcements. Each of the
parties to this Agreement and their respective Subsidiaries
shall consult with each other before issuing any press
release or otherwise making any public statements with
respect to this Agreement or any of the Transactions and
shall not issue any such press release or make any such
public statement without the prior consent of the other
parties to this Agreement, which consent shall not be
unreasonably withheld; provided, however, that any such
person may, without the prior consent of the other parties to
this Agreement, issue such press release or make such public
statement as may be required by law or any listing agreement
or arrangement to which any such person is a party with a
national securities exchange or if it has used all reasonable
efforts to consult with the other parties to this Agreement
and to obtain such parties' consent but has been unable to do
so in a timely manner.
Section 5.7 Notification of Certain Matters. News
Corp. and the Purchaser shall give prompt notice to the
Seller, and the Seller shall give prompt notice to News Corp.
and the Purchaser, of (a) the occurrence or nonoccurrence of
any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in
this Agreement to be untrue or any covenant, condition or
agreement contained in this Agreement not to be complied with
or satisfied and (b) any failure of News Corp., the Purchaser
or the Seller, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.7 shall not
limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
Section 5.8 Registration Statement. News Corp.
shall use its commercially reasonable efforts to cause the
Registration Statement (as defined in the Merger Agreement)
to include a resale prospectus that would permit the Seller
or any affiliate thereof (or any pledgee of News Corp.
Preferred ADRs under a bona fide pledge arrangement with the
Seller) (whether offered for sale directly or in connection
with the issuance of debt, equity or other securities
(including, without limitation, any options, rights, warrants
or similar securities) of Seller (or an affiliate of Seller
or an entity established by or at the request of Seller or an
affiliate of Seller) that are or may be exchangeable or
exercisable for or convertible into News Corp. Preferred
ADRs or News Corp. Preferred Shares) to sell without
restriction all News Corp. Preferred ADRs delivered to the
Seller pursuant to this Agreement or issued to the Seller or
any of its affiliates pursuant to the exercise of warrants to
purchase shares of capital stock of the Company and, after
the filing of the Registration Statement, shall use its
commercially reasonable efforts to prepare and file with the
SEC such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep such
Registration Statement continuously effective for a period
ending on the second anniversary of the Closing, and during
such period shall use its commercially reasonable efforts to
cause the resale prospectus to be supplemented by any
required prospectus supplement. In addition, the provisions
of the Registration Rights Agreement (as defined in Section
5.9) applicable to the Shelf Registration (as defined in
Section 2(a) of the Registration Rights Agreement),
including, without limitation, the provisions with respect to
blue sky, listing, payment of expenses and indemnification,
shall be applicable to the Registration Statement.
Section 5.9 Registration Rights Agreement. Prior
to the Closing Date, News Corp. and the Purchaser shall enter
into a Registration Rights Agreement in the form of Exhibit A
hereto (the "Registration Rights Agreement") with the Seller.
Section 5.10 Cooperation With Respect to Certain
Tax Matters.
(a) The Purchaser recognizes that Holdings
has joined with the Seller in filing unitary, consolidated or
combined Tax Returns. After the Closing Date (i) the Seller
shall include (to the extent required by law) the taxable
income or loss, and all other items, of Holdings for periods
ending on or before the Closing Date, in its unitary,
consolidated or combined Tax Returns, and (ii) with respect
to any other Tax Returns for any taxable period that includes
but does not end on the Closing Date (the "Straddle Tax
Returns"), the Seller shall prepare a schedule allocating the
taxable income or loss, and all other items, of Holdings to
the period commencing with the first day of the taxable
period covered by such Straddle Tax Return up to and
including the Closing Date (excluding taxable income or loss,
and all other items, of the Company arising after the closing
of the Merger) (the "Pre-Closing Period") and the period
commencing with the first day after the Closing Date and
ending with the last day of the taxable period covered by
such Straddle Tax Return (including taxable income or loss,
and all other items, of the Company arising after the closing
of the Merger) (the "Post-Closing Period") by closing the
books of Holdings after the consummation of the Merger.
Holdings shall file any Straddle Tax Returns on the basis of
the allocation of income, loss or other items agreed to by
the Purchaser and Seller. With respect to each Straddle Tax
Return filed by Holdings, Seller shall pay to Holdings the
Tax liability determined to be attributable to the Pre-
Closing Period on the basis of the allocation determined
under this Section within 10 days after the filing of such
Tax Return.
(b) The Seller shall be responsible for, and
shall have ultimate discretion with respect to, (i) all Tax
Returns required or permitted by applicable law to be filed
by Holdings (or by the Seller on its behalf) with respect to
periods that end on or before the Closing Date, (ii) any
elections related to such Tax Returns, which must be
reasonably acceptable to the Purchaser, and (iii)
notwithstanding anything herein to the contrary, any audit,
assessment of Taxes, other examination by any Tax authority,
proceeding or appeal of such proceeding relating to Taxes
("Audit") (including the execution of any waiver of
limitation with respect to any Audit) relating to any such
Tax Returns. The Purchaser and Holdings shall cooperate with
the Seller for the purpose of making any election under
applicable law which will not adversely affect Holdings or
the Purchaser. In the event that any Audit for which the
Seller is responsible pursuant to this Section 5.10(b) could
reasonably be expected to result in a material increase in
Tax liability for which the Purchaser or Holdings would be
liable, the Seller shall consult in good faith with the
Purchaser or Holdings, as the case may be, in respect of the
specific issues that could give rise to such increased Tax
liability and will not terminate or settle such Audit without
the prior written consent of the Purchaser and Holdings,
which consent will not be unreasonably withheld.
(c) The Purchaser and Holdings shall be
responsible for, and shall have ultimate discretion with
respect to, (i) all Tax Returns required to be filed by
Holdings with respect to periods that begin after the Closing
Date and (ii) the Straddle Tax Returns, if any, and (iii) any
Audit (including the execution of any waiver of limitation
with respect to any Audit) relating to any such Tax Returns;
provided, however, that (A) in the case of any Straddle Tax
Return, the preparation and filing of such Return shall be
subject to review by the Seller, and (B) in the event that
any Audit for which the Purchaser is responsible pursuant to
this Section 5.10(c) could reasonably be expected to result
in a material increase in Tax liability for which the Seller
would be liable, the Purchaser shall consult in good faith
with the Seller in respect of the specific issues that could
give rise to such increased Tax liability and will not
terminate or settle such Audit without the prior written
consent of the Seller, which consent will not be unreasonably
withheld.
(d) After the Closing Date, each of the
Purchaser and Holdings, on the one hand, and the Seller, on
the other, shall (i) provide, or cause to be provided, to
each other's respective Subsidiaries, officers, employees,
accountants, representatives and affiliates, such information
(including, without limitation, accounting, audits, and
related schedules), access and assistance as may reasonably
be requested, including making available employees and the
books and records of Holdings and the Company, by any of them
in connection with the preparation of SEC reports, forms,
schedules and registration statements or other financial
accounting statements of or by Holdings or Seller or any of
their respective affiliates or any Tax Return or any Audit of
Holdings or any of its affiliates in respect of which the
Purchaser, Holdings or the Seller, as the case may be, is
responsible pursuant to Sections 5.10(b) or 5.10(c) hereof
and (ii) retain, or cause to be retained, for so long as any
such taxable years or Audits shall remain open for
adjustments, any records or information which may be relevant
to any such Tax Returns or Audits. Notwithstanding anything
to the contrary in this Agreement, neither News Corp. and the
News Corp. Subsidiaries nor Seller and its affiliates shall
be required to make available any of their Tax Returns or
information set forth therein except for such information as
relates exclusively to Holdings.
(e) Each of the Purchaser, Holdings and the
Seller shall (i) promptly inform the other party of, (ii)
keep the other party regularly apprised of the progress with
respect to, and (iii) notify the other party in writing not
later than (A) ten business days after the receipt of any
notice of or (B) fifteen business days prior to the
settlement or final determination of, any Audit for which it
was responsible pursuant to Sections 5.10(b) or 5.10(c)
hereof which could affect the Tax liability of such other
party for any taxable year.
(f) Unless otherwise required by law,
Holdings (or any affiliate of Holdings prior to the Closing
Date on behalf of Holdings) shall not make any election for
Federal, state, local or foreign tax purposes with respect to
a Pre-Closing period or any taxable period of Holdings ending
on or prior to the Closing Date, which adversely affects the
Tax attributes of Holdings.
(g) Section 338(h)(10) Election.
(i) If so requested by the
Purchaser upon notice to the Seller on or before
the Closing Date, the Seller and the Purchaser
shall jointly make an election under section
338(h)(10) of the Code with respect to the sale of
the Holdings Shares (the "Election"). The
Purchaser shall take all necessary steps to
properly make a section 338(g) election (as
hereinafter defined) in connection with the
Election. The Purchaser and the Seller agree to
cooperate in good faith with each other in the
preparation and timely filing of any Tax Returns
required to be filed in connection with the making
of such an election, including the exchange of
information and the joint preparation and filing of
Form 8023-A and related schedules. The Purchaser
and the Seller agree to report the transfers under
this Agreement consistent with such elections and
shall take no position contrary thereto unless
required to do so by applicable tax law as a result
of a determination as defined in section 1313(a) of
the Code or pursuant to this Section 5.10(g).
(ii) The Purchaser shall be
responsible for the preparation and filing of all
forms required to be filed in connection with the
Election. The Purchaser shall deliver such forms
to the Seller at least 30 days prior to the date
such forms are required to be filed. All such
forms must be reasonably acceptable to the Seller.
The Seller shall execute and deliver to the
Purchaser such documents or forms as are requested
and are required by any laws in order to file such
election properly within 20 days of the request by
the Purchaser for such forms. The Seller shall
provide the Purchaser with such information as the
Purchaser reasonably requests in order to prepare
the section 338 forms within 30 days after the
Purchaser's request for such information.
(iii) Notwithstanding any other
provision of this Agreement, the Seller agrees that
any income and gain recognized as a result of, and
in accordance with, the making of the Election will
be included in the consolidated Federal income tax
return of the consolidated group that includes the
Seller and any resulting tax liability will be paid
by the Seller or the consolidated group that
includes the Seller.
(iv) Without the written approval of
the Seller, the Purchaser will not make any filings
in state or local jurisdictions with respect to the
Election.
(v) The Seller and the Purchaser
agree that, for purposes of the Election, the price
for the Holdings Shares is the amount deemed paid
for the shares of the Company owned by Holdings on
the Closing Date and agree to file all Tax Returns
relating to the Election in accordance with this
allocation.
(h) In the event that subsequent to the
consummation of the Transactions, Holdings has Tax attributes
that are carriedback under applicable Tax law to a Tax Return
for a taxable period ending on or before the Closing Date
which included Holdings, any Tax benefit resulting therefrom
shall be paid to the Purchaser within three days of the
receipt of the refund from the applicable Tax authority. The
amount of the Tax benefit shall be reasonably determined by
the Seller or its affiliates. In no event will the Purchaser
or its affiliates have any right to review the Tax Returns of
the Seller or its affiliates or to have access to the
information used or contained in such Tax Returns by reason
of this provision.
Section 5.11 Other Agreements. Fox shall cause
the Company, immediately after the closing of the Merger, to
enter into agreements with AGI, in form and substance
reasonably satisfactory to the Seller, terminating and fully
releasing any party thereto from any further obligation under
the Non-competition Agreement between the Company and AGI,
dated as of March 9, 1994, and the Indemnification Agreement
between the Company and AGI, dated as of March 9, 1994.
Section 5.12 News Corp. Preferred ADRs. Prior to
the Closing, Fox shall (a) pay News Corp. consideration to be
agreed upon by Fox and News Corp. for the issuance of the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued pursuant to this Agreement,
and (b) procure that News Corp., pursuant to the terms of the
Deposit Agreement (as defined below), (i) deposits with the
Custodian (as defined in the Deposit Agreement) the shares of
News Corp. Preferred Stock underlying the News Corp.
Preferred ADRs to be issued pursuant to this Agreement and
(ii) instructs the Depositary to deliver the News Corp.
Preferred ADRs to be issued pursuant to this Agreement in
accordance with the written instructions of the Seller. For
purposes of this Agreement, "Depositary" shall mean Citibank,
N.A., as Depositary pursuant to the Deposit Agreement, dated
as of November 11, 1994, among News Corp., the Depositary and
the holders from time to time of News Corp. Preferred ADRs
(the "Deposit Agreement").
Section 5.13 NYSE; ASX. News Corp. shall (a)
promptly prepare and submit to the New York Stock Exchange
("NYSE") applications covering the News Corp. Preferred
ADRs to be issued pursuant to the Transactions and shall use
commercially reasonable efforts to cause such securities to
be approved for listing on the NYSE prior to the Effective
Time, subject to official notice of issuance, and (b) within
ten days after the Closing Date, prepare and submit to the
Australian Stock Exchange ("ASX") applications covering the
News Corp. Preferred Stock underlying the News Corp.
Preferred ADRs issued pursuant to the Transactions pursuant
to the Listing Rules of the ASX to cause such securities to
be approved for quotation by the ASX.
Section 5.14 Sovereign Immunity. News Corp.
hereby waives any immunity to which it may become entitled on
the basis of sovereignty or otherwise in respect of its
obligations under this Agreement and agrees not to interpose
any such immunity as a defense to any suit or action brought
or maintained in respect of News Corp.'s obligations under
this Agreement.
ARTICLE VI
CONDITIONS TO THE TRANSACTIONS
Section 6.1 The respective obligations of each
party to this Agreement to effect the Transaction shall be
subject to the following conditions:
(a) All conditions to the consummation of the
Merger (other than the condition that the transactions
contemplated by this Agreement shall have been consummated)
shall have been satisfied or waived and all actions necessary
to consummate the Merger other than the Merger Filing shall
have been taken.
(b) The Closing shall have occurred at or
before the close of business in New York City on June 30,
1997 (the "Outside Date").
(c) All necessary regulatory and governmental
approvals and consents, including, without limitation, the
approval of the FCC, shall have been obtained.
(d) Any applicable waiting period under the
HSR Act shall have expired or been terminated.
(e) No action shall have been taken, and no
statute, rule, regulation, executive order, judgment, decree,
or injunction (other than a temporary restraining order)
shall have been enacted, entered, promulgated or enforced
(and not repealed, superseded, lifted or otherwise made
inapplicable), by any court of competent jurisdiction or
Governmental Entity which restrains, enjoins or otherwise
prohibits the consummation of the Transactions (each party
agreeing to use its commercially reasonable efforts to avoid
the effect of any such statute, rule, regulation or order or
to have any such order, judgment, decree or injunction
lifted).
(f) The News Corp. Preferred ADRs shall have
been approved for listing on the NYSE, subject only to
official notice of issuance.
Section 6.2 Conditions to Obligations of the
Seller to Effect the Transactions. The obligations of the
Seller to effect the Transactions are subject to the
satisfaction of the following conditions, unless waived by
the Seller:
(a) The representations and warranties of
News Corp. contained herein that are qualified as to
materiality shall be true and accurate, and those not so
qualified shall be true and accurate in all material
respects, in each case at and as of the Closing with the same
force and effect as though made at and as of the Closing
(except to the extent a representation or warranty speaks
specifically as of an earlier date).
(b) Each of News Corp. and the Purchaser
shall have performed, in all material respects, all
obligations and complied, in all material respects, with all
covenants required by this Agreement to be performed or
complied with by it prior to the Closing.
(c) News Corp. shall have delivered to the
Seller a certificate, dated the Effective Time and signed by
its Chairman of the Board and Chief Executive Officer or
President, evidencing compliance with Sections 6.2(a) and
(b).
(d) The Purchaser shall have delivered to the
Seller a certificate, dated the Effective Time and signed by
its Chairman of the Board and Chief Executive or President,
evidencing compliance with Section 6.2(b).
(e) News Corp. shall have executed and
delivered the Registration Rights Agreement.
(f) The Assignment and Assumption Agreement,
dated as of the date hereof, between Fox and Four Star
Holdings Corp. shall be in full force and effect and Fox
shall have performed all of its obligations thereunder.
(g) The closing of the transactions
contemplated by the Purchase and Sale Agreement, dated as of
the date hereof, between the Purchaser and 1440 Sepulveda
Limited Partnership shall have occurred.
(h) The Company shall have received legal
opinions of Squadron, Ellenoff, Plesent & Sheinfeld, LLP and
Allen, Allen & Hemsley, counsel to News Corp. and Fox, in
form and substance reasonably acceptable to the Company and
its counsel, addressing the matters set forth in Exhibits B-1
and B-2, respectively.
Section 6.3 Conditions to Obligations of News
Corp. and the Purchaser to Effect the Transactions. The
obligations of News Corp. and the Purchaser to effect the
Transactions are subject to the satisfaction of the following
conditions, unless waived by News Corp. and the Purchaser:
(a) The representations and warranties of the
Seller contained herein that are qualified as to materiality
shall be true and accurate, and those not so qualified shall
be true and accurate in all material respects, in each case
at and as of the Closing with the same force and effect as
though made at and as of the Closing (except to the extent a
representation or warranty speaks specifically as of an
earlier date).
(b) The Seller shall have performed, in all
material respects, all obligations and complied, in all
material respects, with all covenants required by this
Agreement to be performed or complied with by it prior to the
Closing.
(c) The Seller shall have delivered to News
Corp. and the Purchaser a certificate, dated the Effective
Time and signed by its Chairman of the Board and Chief
Executive Officer or President, evidencing compliance with
Sections 6.3(a) and (b).
(d) News Corp. and Fox shall have received
the legal opinion of Skadden, Arps, Slate, Meagher & Flom,
counsel to the Company, in form and substance reasonably
acceptable to New Corp. and Fox and their counsel, addressing
the matters set forth in Exhibit C.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be
terminated and abandoned at any time prior to the Closing:
(a) by the mutual written consent of the
Seller, the Purchaser and News Corp.;
(b) by the Seller, the Purchaser or News
Corp., if (i) the Closing shall not have occurred on or
before the Outside Date or (ii) any court of competent
jurisdiction in the United States or any other jurisdiction
shall have issued an order, judgment or decree (other than a
temporary restraining order) restraining, enjoining or
otherwise prohibiting the Merger or the other material
Transactions and such order, judgment or decree shall have
become final and nonappealable; provided, however, that the
right to terminate this Agreement pursuant to clause
(i) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur
on or before such date;
(c) by the Seller, if there has been a
material breach by News Corp. or the Purchaser, as the case
may be, of any representation, warranty, covenant or
agreement set forth in this Agreement, which breach has not
been cured within ten Business Days following receipt by News
Corp. or the Purchaser, as the cas may be, of notice of such
breach from the Seller; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.1(c)
shall not be available to the Seller if the Seller, at such
time, is in material breach of any representation, warranty,
covenant or agreement set forth in this Agreement;
(d) by News Corp. or the Purchaser, if there
has been a material breach by the Seller of any
representation, warranty, covenant or agreement set forth in
this Agreement, which breach has not been cured within ten
Business Days following receipt by the Seller of notice of
such breach from News Corp. or the Purchaser; provided,
however, that the right to terminate this Agreement pursuant
to this Section 7.1(d) shall not be available to News Corp.
or the Purchaser if News Corp. or the Purchaser, at such
time, is in material breach of any representation, warranty,
covenant or agreement set forth in this Agreement;
(e) by News Corp. or the Purchaser, if:
(i) the Merger Agreement is
terminated in accordance with its terms;
(ii) the Seller or any of its
affiliates enters into any agreement to consummate
a Qualifying Proposal (as defined below); or
(iii) the Seller's board of directors
approves or recommends any Qualifying Proposal; and
(f) by the Seller if the Seller's board of
directors approves, and the Seller enters into, an agreement
providing for a Qualifying Proposal. For purposes of this
Agreement, a "Qualifying Proposal" shall mean a written, bona
fide Acquisition Proposal (as defined below) that the
Seller's board of directors (i) determines is reasonably
capable of being financed and (ii) determines, after
consultation with its financial advisors, provides
consideration to the holders of the Seller's capital stock
that is more favorable than that provided by the
Transactions. For purposes of this Agreement, an
"Acquisition Proposal" shall mean a merger or other business
combination involving the Seller or Holdings, or an offer to
acquire in any manner, directly or indirectly, an equity
interest in, substantially all of the equity securities of,
or a substantial portion of the assets of the Seller or
Holdings.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
Section 8.1 Survival. The representations and
warranties of the Seller and News Corp. contained in this
Agreement shall not survive the Closing, provided, that (a)
the representations and warranties of the Seller contained in
Sections 3.1 through 3.5 and the representations and
warranties of News Corp. contained in Section 4.1 through 4.5
shall survive the Closing indefinitely, (b) the
representations and warranties of the Seller contained in
Sections 3.6, 3.7, 3.9, 3.10 and 3.11 and the representations
and warranties of News Corp. contained in Section 4.9 shall
survive the Closing for a period of one year and (c) and the
representations and warranties of the Seller contained in
Section 3.8(g) shall survive the Closing for a period of
three years. The covenants and agreements contained in this
Agreement shall survive the Closing indefinitely.
Section 8.2 Indemnification.
(a) By the Seller. The Seller hereby agrees
to indemnify and hold harmless News Corp., Fox and the
Surviving Corporation from and against any and all damages,
claims, losses or reasonable expenses, including reasonable
fees and expenses of counsel ("Damages"), actually suffered
(i) as a result of a breach of any representation or warranty
made by the Seller in Section 3.1 through 3.7, 3.8(g), 3.9,
3.10 or 3.11 for claims made during the respective survival
period of such representations and warranties pursuant to
Section 8.1, provided, that Damages actually suffered as a
result of a breach of any representation or warranty made by
the Seller in Section 3.6 or 3.9 as to the Holdings SEC
Reports shall not have resulted from information contained
therein relating to any Subsidiaries of Holdings, including,
without limitation, the Company and its Subsidiaries to the
extent included in any consolidated financial statements of
Holdings or otherwise, and, provided, further, that for the
Buyer to claim indemnification as a result of a breach of any
representation made by the Seller in Section 3.8(g), (A) News
Corp. and its affiliates (including the Company) must
consistently file Tax Returns after the Closing on the basis
that they qualify for the exceptions set forth in Section
3.8(g) and (B) any Tax liability resulting from the failure
to qualify for such exceptions must be directly caused by the
failure of the Company to comply with its obligations under
Section 3.8(g) and not by any action of News Corp. or any of
its affiliates (including the Company) that occur after the
Closing, or (ii) as a result of any claim arising as a result
of the Transactions that is asserted (A) pursuant to Section
5.01 of the Stockholders Agreement, dated as of May 25, 1993,
by and among SCI Television, Inc., Andrews Group Incorporated
and the Initial Executing Shareholders (as defined therein)
by any Initial Executing Stockholder or (B) pursuant to
Section 2.1 of the Registration and Tag Along Rights
Agreement, dated as of March 28, 1994, among the Company,
Andrews Group Incorporated and the Purchasers (as defined
therein) by any Initial Holder (as defined therein) or any
Permitted Transferee thereof (as defined therein) or (C)
pursuant to Section 6(c)(viii) of the Certificate of
Designation of Preferences and Rights of the 6.375%
Cumulative Redeemable Convertible Preferred Stock, Series A,
of the Company an Initial Holder (as defined therein).
(b) By News Corp.. News Corp. hereby agrees
to indemnify and hold harmless the Seller from and against
any and all Damages actually suffered as a result of a breach
of any representation or warranty made by News Corp. in
Section 4.1 through 4.5 or 4.9.
(c) Tax Indemnification.
(i) The Seller shall be liable for,
shall pay to the appropriate Tax authorities, and
shall indemnify and hold the Purchaser harmless
against, all Taxes that are due and payable with
respect to Holdings and any other company, except
the Company and its Subsidiaries, with which
Holdings files a consolidated Federal tax return
and that relate to (A) the taxable periods ending
before or on the Closing Date, (B) the Pre-Closing
Period (excluding taxable income or loss, and all
other items, of the Company after the closing of
the Merger), and (C) any liabilities arising under
Treasury Regulation section 1.1502-6 and similar
provisions of foreign, state or local law. The
Seller shall be liable for, and shall indemnify and
hold the Purchaser and the Company and its
Subsidiaries harmless against, any liabilities
arising under Treasury Regulations section 1.1502-6
or under similar provisions of foreign, state or
local law to which the Company or its Subsidiaries
may be subject as a result of any Subsidiaries of
the Company having joined with the Seller (or its
affiliates) in the filing of consolidated,
combined, or unitary Tax Returns. The Seller shall
be entitled to all Tax refunds (including interest)
attributable to the taxable periods in respect of
which the Seller is so obligated to indemnify the
Purchaser under this Section 8.2(c)(i).
(ii) The Purchaser and Holdings
shall be liable for, shall pay to the appropriate
Tax authorities, and shall indemnify and hold the
Seller harmless against all Taxes of Holdings that
relate to (A) the taxable periods that begin after
the Closing Date and (B) the Post-Closing Period
(including taxable income or loss, and all other
items, of the Company after the closing of the
Merger). The Purchaser and Holdings shall be
entitled to any Tax refund (including interest)
attributable to the taxable periods in respect of
which the Purchaser and Holdings are so obligated
to indemnify the Seller under this Section
8.2(c)(ii).
(d) Conduct of Indemnification Proceedings.
If any Person shall be entitled to indemnity hereunder (an
"indemnified party"), such indemnified party shall give
prompt notice to the party from which such indemnity is
sought (the "indemnifying party") of any claim or of the
commencement of any proceeding with respect to which such
indemnified party seeks indemnification or contribution
pursuant hereto; provided, however, that the delay or failure
to so notify the indemnifying party shall not relieve the
indemnifying party from any obligation or liability except to
the extent that the indemnifying party has been materially
prejudiced by such delay or failure. Except as otherwise
provided in this Agreement, the indemnifying party shall have
the right, exercisable by giving written notice to an
indemnified party promptly after the receipt of written
notice from such indemnified party of such claim or
proceeding, to assume, at the indemnifying party's expense,
the defense of any such claim or proceeding, with counsel
reasonably satisfactory to such indemnified party; provided,
however, that an indemnified party shall have the right to
employ separate counsel in any such claim or proceeding and
to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless: (i) the indemnifying party agrees
to pay such fees and expenses, (ii) the indemnifying party
fails promptly to assume the defense of such claim or
proceeding or fails to employ counsel reasonably satisfactory
to such indemnified party or (iii) the named parties to any
proceeding (including impleaded parties) include both such
indemnified party and the indemnifying party, and such
indemnified party shall have been advised in writing (a copy
of which shall be provided to the indemnifying party) by
counsel that there may be one or more legal defenses
available to it which are different from or additional to
those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party);
in which case the indemnified party shall have the right to
employ counsel and to assume the defense of such claim or
proceeding to the extent such claim is effected by such
defense; provided, however, that the indemnifying party shall
not, in connection with any one such claim or proceeding or
separate but substantially similar or related claims or
proceedings in the same jurisdiction, arising out of the same
general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one firm of
attorneys (together with appropriate local counsel) at any
time for all of the indemnified parties. Whether or not such
defense is assumed by the indemnifying party, such
indemnified party will not be subject to any liability for
any settlement made without its consent. The indemnifying
party shall not consent to entry of any judgment or enter
into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance
reasonably satisfactory to the indemnified party, from all
liability in respect of such claim or litigation for which
such indemnified party would be entitled to indemnification
hereunder.
(e) Treatment. Except as otherwise required
by law, all indemnification payments hereunder shall be
treated as an adjustment to the purchase price for the
Transferred Shares.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered by hand, mailed by registered or
certified mail (return receipt requested) or sent by prepaid
overnight courier (with proof of service) or confirmed
facsimile transmission to the parties as follows (or at such
other addresses for a party as shall be specified by like
notice) and shall be deemed given on the date on which so
hand-delivered, mailed, delivered or sent by confirmed
facsimile transmission:
(a) if to the Seller, to:
c/o MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Facsimile No.: (212) 572-5056
Attention: Barry F. Schwartz
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Suite 3400
Los Angeles, California 90071
Facsimile No.: (213) 687-5600
Attention: Thomas C. Janson, Jr.
(b) if to News Corp., to:
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Facsimile No.: (213) 768-2029
Attention: Arthur M. Siskind
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
(c) If to the Purchaser, to:
Fox Television Stations, Inc
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
Facsimile: (310) 369-2572
Attention: Jay Itzkowitz
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
Section 9.2 Expenses. All costs and expenses
incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such
expenses.
Section 9.3 Counterparts. This Agreement may be
executed in two or more counterparts, all of which shall be
considered the same agreement.
Section 9.4 Governing Law. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF. Each of the parties hereto
acknowledges that the negotiation of this Agreement occurred
in New York, New York and irrevocably agrees that any legal
suit, action or proceeding brought by another party hereto
arising out of or based upon this Agreement or the
transactions contemplated hereby shall be instituted in any
United States Federal or New York State court in the Borough
of Manhattan, The City of New York, New York (the "Courts"),
waives any objection which it may now or hereafter have to
the laying of venue of any such proceedings, submits to the
exclusive jurisdiction of such Courts in any such suit,
action or proceeding and agrees not to commence any such
suit, action or proceeding except in such Courts. Each of
the Purchaser and News Corp. hereby appoints News America
Publishing Incorporated, 1211 Avenue of the Americas, New
York, New York 10036, Attention: Arthur M. Siskind, as its
authorized agent (the "Authorized Agent") upon which process
may be served in any such action arising out of or based upon
this Agreement or the transactions contemplated hereby that
may be instituted in any Court by any party hereto and
expressly consents to the jurisdiction of any such Court, but
only in respect of any such action, and waives any other
requirements of or objections to personal jurisdiction with
respect thereto. Each of the Purchaser and News Corp.
represents and warrants that the Authorized Agent has agreed
to act as said agent for service of process, and each of the
Purchaser and News Corp. agrees to take any and all action,
including the filing of any and all documents and
instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. If the
Authorized Agent shall cease to act as the Purchaser's or
News Corp.'s agent for service of process, the Purchaser or
News Corp., as the case may be, shall appoint without delay
another such agent and notify the Seller of such appointment.
With respect to any such action in the Courts, service of
process upon the Authorized Agent and written notice of such
service to the Purchaser or News Corp. shall be deemed, in
every respect, effective service of process upon the
Purchaser or News Corp., as the case may be.
Section 9.5 Headings. The headings contained in
this Agreement are for reference purposes and shall not
affect in any way the meaning or interpretation of this
Agreement.
Section 9.6 Entire Agreement. This Agreement,
together with Confidentiality Agreement, the Seller
Disclosure Letter and the News Corp. Disclosure Letter,
constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof,
including, without limitation, the Memorandum (as defined in
the Merger Agreement).
Section 9.7 Severability Any term or provision of
this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is
enforceable.
IN WITNESS WHEREOF, this Agreement has been signed
on behalf of the Seller, News Corp. and the Purchaser, all as
of the date first written above.
NWCG (PARENT) HOLDINGS
CORPORATION
By: /s/ Glenn P. Dickes
Glenn P. Dickes
Vice President
THE NEWS CORPORATION LIMITED
By: /s/ Arthur M. Siskind
Arthur M. Siskind
Director
FOX TELEVISION STATIONS, INC.
By: /s/ Jay Itzkowitz
Jay Itzkowitz
Senior Vice President
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the
"Agreement") is made and entered into as of ,
1996, by and among The News Corporation Limited (ACN 007
910 330), a South Australia corporation (the "Company"),
Fox Television Station, Inc., a Delaware corporation in
which the Company has an indirect interest ("Fox"), and
the persons named on the signature pages hereto (each, an
"Investor," and collectively, the "Investors").
WHEREAS, the Investors own shares of capital
stock (the "Predecessor Shares"), or warrants to purchase
shares of capital stock (the "Predecessor Warrants"), of
New World Communications Group Incorporated, a Delaware
corporation (the "Predecessor Corporation");
WHEREAS, pursuant to the Stock Purchase
Agreement, dated as of September 24, 1996, among the
Company, Fox and certain of the Investors (the "Stock
Purchase Agreement"), Fox will purchase certain of the
Predecessor Shares and all of the outstanding shares of
capital stock of NWCG Holdings Corporation, a Delaware
corporation, in exchange for Company Preferred ADRs (as
defined below);
WHEREAS, in connection with the Agreement and
Plan of Merger, dated as of September 24, 1996 (the
"Merger Agreement"), by and among the Company, the
Predecessor Corporation, Fox and Fox Acquisition Co.,
Inc., a Delaware corporation and a wholly owned
subsidiary of Fox ("Merger Sub"), Merger Sub will be
merged with and into the Predecessor Corporation and the
Predecessor Warrants will become exercisable for Company
Preferred ADRs and certain of the Predecessor Shares will
be converted into the right to receive, or become
convertible into, Company Preferred ADRs; and
WHEREAS, in order to induce certain of the
Investors to execute and deliver to Fox and the Company
the Stock Purchase Agreement and all of the Investors to
execute and deliver to Fox certain voting agreements, the
Company has agreed to provide the registration rights and
Fox has agreed to pay the expenses and provide the
indemnification set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual
covenants and agreements set forth herein, and for other
good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as
follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms
shall have the following meanings:
Advice: See Section 4 hereof.
Affiliate means, with respect to any specified
person, any other person directly or indirectly
controlling or controlled by or under direct or indirect
common control with such specified person. For the
purposes of this definition, "control" when used with
respect to any specified person means the power to direct
the management and policies of such person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative
to the foregoing.
Business Day means any day that is not a
Saturday, a Sunday or a legal holiday on which banking
institutions in the State of New York are not required to
be open.
Capital Stock means, with respect to any
person, any and all shares, interests, participations or
other equivalents (however designated) of corporate stock
issued by such person, including each class of common
stock and preferred stock of such person.
Company: See the introductory clauses hereof.
Company Preferred ADRs means the American
Depositary Receipts of the Company, each of which
represents four fully paid and nonassessable Company
Preferred Shares, issued pursuant to the Merger
Agreement or the Stock Purchase Agreement or acquired
upon exercise of warrants of the Predecessor Corporation,
or any other shares of Capital Stock or other securities
into which such Company Preferred ADRs or Company
Preferred Shares shall be reclassified or changed,
including, without limitation, by reason of a merger,
consolidation, exchange, reorganization or
recapitalization. If the Company Preferred ADRs or
Company Preferred Shares have been so reclassified or
changed, or if the Company pays a dividend or makes a
distribution on the Company Preferred ADRs or Company
Preferred Shares in shares of Capital Stock or other
securities, or subdivides (or combines) its outstanding
Company Preferred ADRs or Company Preferred Shares into a
greater (or smaller) number of Company Preferred ADRs or
Company Preferred Shares, a Company Preferred ADR or
Company Preferred Share, as the case may be, shall be
deemed to be such number of shares of Capital Stock and
amount of other securities to which a holder of a Company
Preferred ADR or Company Preferred Share, as the case may
be, outstanding immediately prior to such change,
reclassification, exchange, dividend, distribution,
subdivision or combination would be entitled.
Company Preferred Shares means the Preferred
Limited Voting Ordinary Shares, par value A$.50 per
share, of the Company.
Delay Period: See Section 2(d) hereof.
Demand Notice: See Section 2(b) hereof.
Demand Registration: See Section 2(c) hereof.
Demand Registration Statement means a
Registration Statement intended to affect a Demand
Registration.
Effectiveness Period: See Section 2(d) hereof.
Exchange Act means the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
SEC promulgated thereunder.
Hold-back Period: See Section 3 hereof.
Holder means a person who owns Registrable
Securities and is either (i) an Investor, (ii) a person
to whom an Investor has transferred Registrable
Securities in a transaction not involving a public
offering (e.g. pursuant to Rule "4(1-1/2)" or any similar
private transfer exemption) that has agreed to be bound
by the terms of this Agreement as if such person were an
Investor, (iii) upon the death of any Investor, the
executor of the estate of such Investor or such
Investor's heirs, devisees, legatees or assigns or (iv)
upon the disability of any Investor, any guardian or
conservator of such Investor.
Initial Shelf Registration: See Section 2(a)
hereof.
Interruption Period: See Section 4 hereof.
Investor(s): See the introductory clauses
hereof.
Merger Agreement: See the introductory clauses
hereof.
person means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
Predecessor Corporation: See the introductory
clauses hereof.
Predecessor Shares: See the introductory
clauses hereof.
Prospectus means the prospectus included in any
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted
from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), as
amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion
of the Registrable Securities covered by such
Registration Statement and all other amendments and
supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such
prospectus.
Registrable Securities means Company Preferred
ADRs or Company Preferred Shares originally issued
pursuant to the Merger Agreement or the Stock Purchase
Agreement or upon exercise of a Predecessor Warrant and
beneficially owned by an Investor or an Affiliate of an
Investor (or any pledgee of New Corp. Preferred ADRs
under a bona fide pledge arrangement with an Investor)
(whether offered for sale directly or in connection with
the issuance of debt, equity or other securities
(including, without limitation, any options, rights,
warrants or similar securities) of an Investor (or an
Affiliate of an Investor or a person established by or at
the request of an Investor) or another person that are or
may be exchangeable or exercisable for or convertible
into Company Preferred ADRs or Company Preferred Shares
(collectively, "Derivative Securities")) unless (i) such
securities have previously been disposed of by a Holder
pursuant to an effective Registration Statement under
Section 5 of the Securities Act, or (ii) such securities
owned by New World Communications Group (Parent) Holdings
Corporation, a Delaware corporation, or its assignee
("NWCGP") have become freely transferable without
restriction under the Securities Act.
Registration means registration under the
Securities Act of the offering of Registrable Securities
pursuant to the Initial Shelf Registration or the Demand
Registration.
Registration Period: See Section 2(b) hereof.
Registration Statement means any registration
statement of the Company under the Securities Act that
covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus
included therein, amendments and supplements to such
registration statement, including pre- and post-effective
amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in
such registration statement.
SEC means the Securities and Exchange
Commission.
Securities Act means the Securities Act of
1933, as amended, and the rules and regulations of the
SEC promulgated thereunder.
Shelf Registration means the registration under
the Securities Act of the offering of Registrable
Securities on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act (or any similar rule
that may be adopted by the SEC).
Shelf Registration Statement means a
Registration Statement intended to effect a Shelf
Registration.
Stock Purchase Agreement: See the introductory
clauses hereof.
underwritten registration or underwritten
offering means a registration under the Securities Act in
which Registrable Securities, or securities of any person
exchangeable or exercisable for or convertible into
Registrable Securities, are sold to or through an
underwriter for reoffering or distribution pursuant to a
public offering.
SECTION 2. Initial Shelf Registration; Demand
Registration.
(a) At or before the Effective Time (as
defined in the Merger Agreement), the Company shall
prepare and file with the SEC a Shelf Registration
Statement on an appropriate form (the "Initial Shelf
Registration"). The Company shall include in the Initial
Shelf Registration all Registrable Securities with
respect to which a Holder has, not later than the second
day prior to the effectiveness of such Shelf Registration
Statement, given the Company written notice of such
Holder's intention to sell thereunder; provided, however,
that the Company shall not be obligated to include
Registerable Securities of Apollo Advisors L.P., or its
affiliates, unless Apollo Advisors L.P. and its
affiliates collectively include not less than 1,500,000
Company Preferred ADRs in the Initial Shelf Registration
Statement. The Company shall use its commercially
reasonable efforts to cause such Initial Shelf
Registration Statement to be declared effective by the
SEC at or before the Effective Time.
(b) NWCGP shall have the right, during the
period (the "Registration Period") commencing on the
second anniversary hereof and ending on the third
anniversary hereof, by written notice (the "Demand
Notice") given to the Company, to request the Company to
register under and in accordance with the provisions of
the Securities Act all or part of the Registrable
Securities designated by such Holders; provided, that
such Demand Notice may only be given in the event that,
in the opinion of counsel reasonably satisfactory to the
Company (which opinion shall be in writing and furnished
to the Company), the Registrable Shares must be sold
pursuant to an effective registration statement in order
for such shares to be sold to the public in the United
States without restriction under the Securities Act.
Upon receipt of any such Demand Notice, the Company will
promptly notify all other Holders of the receipt of such
Demand Notice and allow them the opportunity to include
Registrable Securities held by them in the proposed
registration by submitting their own Demand Notice.
NWCGP shall be entitled to one Demand Registration
pursuant to this Section 2(b) unless such Demand
Registration did not become effective or was not
maintained effective for a period (whether or not
continuous) of at least one year or such shorter period
which shall terminate when all the Registrable Securities
covered by such Demand Registration have been disposed of
pursuant thereto, in which case NWCGP will be entitled,
in such case, to one additional Demand Registration
pursuant hereto.
(c) As soon as practicable, but in any
event within 20 days after the date on which the Company
first receives a Demand Notice pursuant to Section 2(b)
hereof, the Company shall file with the SEC a
Registration Statement on the appropriate form for the
registration and sale of the total number of Registrable
Securities specified in such Demand Notices in accordance
with the intended method or methods of distribution
specified by NWCGP in such Demand Notice (a "Demand
Registration"). The Company shall use its commercially
reasonable efforts to cause such Registration Statement
to be declared effective by the SEC as soon as possible,
but in any event within 60 days of the date of the
Company's earliest receipt of a Demand Notice.
(d) The Company agrees to use
commercially reasonable efforts to keep any Registration
Statement filed pursuant to this Section 2 continuously
effective and usable for the sale of Registrable
Securities (i)(A) in the case of the Initial Shelf
Registration, until two years from the Effective Time,
and (B) in the case of a Demand Registration, until one
year from the date on which the SEC declares such
Registration Statement effective, or (ii) until all the
Registrable Securities covered by such Registration
Statement have been sold pursuant to such Registration
Statement, if earlier, in either case as such period may
be extended pursuant to this Section 2. Notwithstanding
the foregoing, the Company shall have the right to delay
the filing of any Demand Registration Statement otherwise
required to be prepared and filed by the Company pursuant
to this Section 2, or to suspend the use of any
Registration Statement, for a period not in excess of 30
days (a "Delay Period") if the Board of Directors of the
Company determines in its reasonable good faith judgment
that the registration and distribution of the Registrable
Securities covered or to be covered by such Registration
Statement would materially interfere with any pending
acquisition or corporate reorganization or other material
transaction involving the Company or any of its
subsidiaries or would require disclosure of any other
material corporate development that the Company is not
otherwise required to disclose, which disclosure would
materially adversely affect the Company. The Company
will promptly give the Holders written notice of such
determination and an approximation of the period of the
anticipated delay; provided, however, that the aggregate
number of days included in all Delay Periods during any
consecutive 12 months shall not exceed the aggregate of
(x) 90 days minus (y) the number of days occurring during
all Hold-Back Periods and Interruption Periods during
such 12 month period. Each Holder agrees to cease all
disposition efforts under such Registration Statement
with respect to Registrable Securities held by such
Holder immediately upon receipt of notice of the
beginning of any Delay Period. The Company shall provide
prompt written notice to the Holders of the end of each
Delay Period. Notwithstanding the foregoing, the Company
shall not be entitled to initiate a Delay Period unless
it shall concurrently prohibit (i) sales by other
security holders under registration statements covering
securities held by such other security holders and (ii)
sales of securities of the Company by directors and
executive officers during such period. The time period
for which the Company is required to maintain the
effectiveness of a Registration Statement referred to
above shall be extended by the aggregate number of days
of all Delay Periods, Hold-Back Periods and Interruption
Periods affecting such Registration, and such period and
any extension thereof is hereinafter referred to as the
"Effectiveness Period."
(e) The Company shall not include any
securities that are not Registrable Securities in any
Registration Statement filed pursuant to this Section 2
without the prior written consent of the Holders of a
majority in number of the Registrable Securities covered
by such Registration Statement. As of the date hereof,
there are no agreements granting any person (an "Other
Security Holder") the right to include any securities of
such Other Security Holder (or such Other Security
Holder's successors or assigns) in any registration
pursuant to Section 2. The Company shall not enter into
any agreement granting any Other Security Holder
registration rights that would permit any securities of
such Other Security Holder (or such Other Security
Holder's successors or assigns) to be included in a
Registration Statement filed pursuant to this Section 2.
(f) NWCGP may, at any time prior to the
effective date of the Registration Statement filed
pursuant to a Demand Notice, revoke such request by
providing a written notice to the Company to such effect,
provided, that NWCGP may not make any such revocation
request with respect to more than one Demand Notice.
SECTION 3. Hold-Back Agreements.
During any Effectiveness Period, NWCGP and each
of its Affiliates having Registrable Securities covered
by the Registration Statement to which such Effectiveness
Period relates shall, if requested by the managing
underwriter or underwriters in an underwritten offering
by the Company for the account of the Company, agree not
to effect any public sale or distribution of any
securities of the same type (including any underlying
securities) as the securities being offered by the
Company (except as part of such underwritten offering or
pursuant to Rule 144 or 145 under the Securities Act),
during a period of up to 90 days, beginning on the
effective date of such underwritten offering (such 90 day
period being referred to as a "Hold-Back Period"). In
addition, during any Effectiveness Period, the Company
shall, if requested by the managing underwriter or
underwriters in an underwritten offering for the account
of NWCGP or any of its Affiliates, agree not to effect
any public sale or distribution of any securities of the
same type (including any underlying securities) as the
securities being offered by such Holders (except as part
of such underwritten offering) during a period of up to
90 days, beginning on the effective date of such
underwritten offering.
SECTION 4. Registration Procedures.
In connection with the registration obligations
of the Company pursuant to and in accordance with Section
2 hereof, the Company will use its commercially
reasonable efforts to effect such registration to permit
the sale of such Registrable Securities in accordance
with the Holders' intended method or methods of
disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
(a) prepare and file with the SEC a
Registration Statement for the sale of the Registrable
Securities on any form for which the Company then
qualifies or which counsel for the Company shall deem
appropriate in accordance with such Holders' intended
method or methods of distribution thereof and, subject to
Section 2(d), use its commercially reasonable efforts to
cause such Registration Statement to become effective and
remain effective as provided herein;
(b) prepare and file with the SEC such
amendments (including post-effective amendments) to the
Registration Statement, and such supplements to the
Prospectus, as may be required by the rules, regulations
or instructions applicable to the Securities Act during
the applicable period in accordance with the intended
methods of disposition specified by the Holders owning
any Registrable Securities covered by such Registration
Statement, make generally available earnings statements
satisfying the provisions of Section 11(a) of the
Securities Act (provided that the Company shall be deemed
to have complied with this clause if it has complied with
Rule 158 under the Securities Act), and cause the
Prospectus as so supplemented to be filed pursuant to
Rule 424 under the Securities Act; provided, that a
reasonable time before filing a Registration Statement or
Prospectus, or any amendments or supplements thereto
(including reports to be filed by it under the Exchange
Act that, upon filing, will be incorporated or deemed to
be incorporated by reference in any Registration
Statement or Prospectus), the Company will furnish to the
Holders owning Registrable Securities covered by such
Registration Statement, and their counsel, for review and
comment, copies of all such documents to be filed;
(c) notify the Holders owning any
Registrable Securities covered by such Registration
Statement promptly and (if requested) confirm such notice
in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed,
and, with respect to a Registration Statement or any
post-effective amendment, when the same has become
effective, (ii) of any request by the SEC for amendments
or supplements to a Registration Statement or related
Prospectus or for additional information, (iii) of the
issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) of
the receipt by the Company of any notification with
respect to the suspension of the qualification or
exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, and
(v) of the happening of any event that requires the
making of any changes in such Registration Statement,
Prospectus or documents incorporated or deemed to be
incorporated therein by reference so that they will not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary to make the statements therein not
misleading;
(d) use its commercially reasonable
efforts to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification or
exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction;
(e) furnish to the Holders disposing of
Registrable Securities covered by such Registration
Statement, counsel for such Holders and each managing
underwriter, if any, without charge, one executed copy of
the Registration Statement, as declared effective by the
SEC, and of each post-effective amendment thereto, in
each case, including financial statements and schedules
and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and deliver, without
charge, such number of conformed copies of the
Registration Statement and each amendment thereto, and of
the preliminary prospectus, any amended preliminary
prospectus, each final Prospectus and any amendment or
supplement thereto, as such Holder may reasonably request
in order to facilitate the disposition of the Registrable
Securities covered by the Registration Statement in
conformity with the requirements of the Securities Act;
(f) prior to any public offering of
Registrable Securities, use its commercially reasonable
efforts to register or qualify such Registrable
Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Holders
disposing of Registrable Securities covered by the
Registration Statement shall reasonably request in
writing; provided, however, that the Company shall in no
event be required to qualify generally to do business as
a foreign corporation in any jurisdiction where it is not
at the time so qualified or to take any action that would
subject it to general service of process or taxation in
any jurisdiction where it is not then subject;
(g) except during any Delay Period, upon
the occurrence of any event contemplated by Section
4(c)(v) above, promptly file a supplement or post-
effective amendment to the Registration Statement or
related Prospectus or any document incorporated or deemed
to be incorporated therein by reference or any other
required document so that, as thereafter delivered to the
purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain an untrue
statement of a material fact or omit to state any
material fact required to be stated therein or necessary
to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(h) use its commercially reasonable
efforts to cause all Registrable Securities covered by
the Registration Statement to be listed on each
securities exchange or automated interdealer quotation
system, if any, on which similar securities issued by the
Company are then listed or quoted;
(i) on or before the effective date of
the Registration Statement, provide the transfer agent of
the Company for the Registrable Securities with printed
certificates for the Registrable Securities in a form
eligible for deposit with The Depositary Trust Company;
(j) if such offering is an underwritten
offering, make available for inspection by any Holder
disposing of Registrable Securities included in such
Registration Statement, any underwriter of such offering,
and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the
"Inspectors"), all financial and other records and other
information, pertinent corporate documents and properties
of any of the Company and its subsidiaries (collectively,
the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence
responsibility; provided, however, that the Records that
the Company determines, in good faith, to be confidential
shall not be disclosed to any Inspector unless (i) such
Inspector signs a confidentiality agreement reasonably
satisfactory to the Company (which shall permit the
disclosure of such Records in such Registration Statement
or the related Prospectus if necessary to avoid or
correct a material misstatement in or material omission
from such Registration Statement or Prospectus), (ii)
after consultation with counsel for the applicable
Inspectors, the Holders and the Company, the disclosure
of such Records is necessary to avoid or correct a
material misstatement or material omission in such
Registration Statement or (iii) the release of such
Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, provided that
each Holder shall, promptly after learning that
disclosure of such Records is sought in a court having
jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of such Records;
and
(k) if such offering is an underwritten
offering, enter into such agreements (including an
underwriting agreement in form, scope and substance as is
customary in underwritten offerings) and take all such
other appropriate and reasonable actions requested by the
Holders owning a majority of the Registrable Securities
being sold in connection therewith (including those
reasonably requested by the managing underwriters) in
order to expedite or facilitate the disposition of such
Registrable Securities, and in such connection, (i) use
its commercially reasonable efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel
and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters and
counsel to the Holders disposing of Registrable
Securities), addressed to each Holder selling Registrable
Securities covered by such Registration Statement and
each of the underwriters as to the matters customarily
covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by
such counsel and underwriters, (ii) use its commercially
reasonable efforts to obtain "cold comfort" letters and
updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other
independent certified public accountants of any
subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial
data are, or are required to be, included in the
Registration Statement), addressed to each Holder selling
Registrable Securities covered by the Registration
Statement (unless such accountants shall be prohibited
from so addressing such letters by applicable standards
of the accounting profession) and each of the
underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten
offerings, and (iii) if requested and if an underwriting
agreement is entered into, provide indemnification
provisions and procedures substantially to the effect set
forth in Section 7 hereof with respect to all parties to
be indemnified pursuant to said Section. The above shall
be done at each closing under such underwriting or
similar agreement, or as and to the extent required
thereunder.
With respect to any Registration under Section
2 hereof, the Company may require each Holder disposing
of Registrable Securities covered by such Registration to
furnish such information regarding the Holder and such
Holder's intended disposition of Registrable Securities
as the Company may from time to time reasonably request
in writing. In connection with any offering of
Derivative Securities, the Company shall use commercially
reasonable efforts to cooperate with a Holder in
connection with such offering, provided, that the Company
shall not be required to assume any liabilities of a
nature that it would not otherwise be liable for in
connection with a direct sale by a Holder of Registrable
Securities.
Upon receipt of any notice from the Company of
the happening of any event of the kind described in
Section 4(c)(ii), 4(c)(iii), 4(c)(iv) or 4(c)(v) hereof,
each Holder shall (i) forthwith discontinue disposition
of any Registrable Securities pursuant to such
Registration Statement or Prospectus until receipt of the
copies of the supplemented or amended Prospectus
contemplated by Section 4(g) hereof, or until such Holder
is advised in writing (the "Advice") by the Company that
the use of the applicable Prospectus may be resumed, and
has received copies of any amended or supplemented
Prospectus or any additional or supplemental filings
which are incorporated, or deemed to be incorporated, by
reference in such Prospectus (such period during which
disposition is discontinued being an "Interruption
Period") and (ii) if requested by the Company, deliver
to the Company (at the expense of the Company) all copies
then in its possession, other than permanent file copies
then in its possession, of the Prospectus covering such
Registrable Securities at the time of receipt of such
request.
SECTION 5. Registration Expenses.
Whether or not any Registration Statement is
filed or becomes effective, Fox shall pay all costs, fees
and expenses incident to the Company's performance of or
compliance with this Agreement including, without
limitation, (i) all registration and filing fees,
including NASD filing fees, (ii) fees and expenses of
compliance with securities or Blue Sky laws, including
reasonable fees and disbursements of counsel in
connection therewith, (iii) printing expenses (including,
without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses
(including preliminary prospectuses) if the printing of
prospectuses is requested by the Holders or the managing
underwriter, if any), (iv) messenger, telephone and
delivery expenses, (v) fees and disbursements of counsel
for the Company, (vi) fees and disbursements of all
independent certified public accountants of the Company
(including, without limitation, expenses of any "cold
comfort" letters required in connection with this
Agreement) and all other persons retained by the Company
in connection with the Registration Statement,
(vii) reasonable fees and disbursements of one counsel,
other than the Company's counsel, selected to represent
all such Holders by Holders owning a majority in number
of the Registrable Securities being registered, (viii)
fees and expenses customarily reimbursed or paid by
issuers or selling securityholders on behalf of
underwriters in underwritten offerings and (ix) all other
reasonable costs, fees and expenses incident to the
Company's performance or compliance with this Agreement.
Notwithstanding the foregoing, the fees and expenses of
any persons (other than fees and disbursements of the
counsel selected by Holders owning a majority in number
of the Registrable Securities being registered) retained
by a Holder, and any discounts, commissions or brokers'
fees or fees of similar securities industry professionals
and any transfer taxes relating to the disposition of the
Registrable Securities by a Holder, will be payable by
such Holder, and Fox will have no obligation to pay any
such amounts.
SECTION 6. Underwriting Requirements.
(a) Subject to Section 6(b) hereof, any
Holder shall have the right, by written notice, to
specify that it intends to dispose of Registrable
Securities covered by a Registration Statement pursuant
to an underwritten offering.
(b) In the case of any underwritten
offering(s) pursuant to the Initial Shelf Registration
Statement or the Demand Registration, the Holders selling
securities in such underwritten offering shall select the
institution or institutions that shall manage or lead the
offering or placement, subject to the reasonable
satisfaction of the Company. Any selection or other
decision by Holders pursuant to this paragraph (b) shall
be made by the Holders of a majority in number of the
Registrable Securities to be sold pursuant to the
applicable underwritten offering. No Holder shall be
entitled to participate in an underwritten offering
unless and until such Holder has entered into an
underwriting or other agreement with such institution or
institutions for such offering in such form as the
Company and such institution or institutions shall
determine.
SECTION 7. Indemnification.
(a) Indemnification by Fox. Fox shall,
without limitation as to time, indemnify and hold
harmless, to the full extent permitted by law, each
Holder whose Registrable Securities are covered by a
Registration Statement or Prospectus, the officers,
directors and agents and employees of each of them, each
Person who controls each such Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and
employees of each such controlling person, to the fullest
extent lawful, from and against any and all losses,
claims, damages, liabilities, judgment, reasonable costs
(including, without limitation, reasonable costs of
preparation and reasonable attorneys' fees) and
reasonable expenses (collectively, "Losses"), as
incurred, arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in
such Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission
or alleged omission of a material fact required to be
stated therein or necessary to make the statements
therein not misleading, except insofar as the same are
based upon information furnished in writing to the
Company by or on behalf of such Holder expressly for use
therein; provided, however, that Fox shall not be liable
to any Holder to the extent that any such Losses arise
out of or are based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in
any preliminary prospectus if (i) having previously been
furnished by or on behalf of the Company with copies of
the Prospectus, such Holder failed to send or deliver a
copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registrable
Securities by such Holder to the person asserting the
claim from which such Losses arise and (ii) the
Prospectus would have completely corrected such untrue
statement or alleged untrue statement or such omission or
alleged omission.
(b) Indemnification by Holder of
Registrable Securities. In connection with any
Registration Statement in which a Holder is
participating, and as a condition to such participation,
such Holder shall (i) furnish to the Company in writing
such information as the Company reasonably requests for
use in connection with any Registration Statement or
Prospectus and (ii) be deemed to have agreed to
indemnify, to the fullest extent permitted by law, the
Company, its directors, officers, agents and employees,
each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, from and against
all Losses arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in
any Registration Statement or Prospectus or any amendment
or supplement thereto, or any preliminary prospectus, or
arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein
or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or
alleged omission is based upon and in conformity with any
information so furnished in writing by or on behalf of
such Holder to the Company expressly for use in such
Registration Statement or Prospectus.
(c) Conduct of Indemnification
Proceedings. If any Person shall be entitled to
indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party
from which such indemnity is sought (the "indemnifying
party") of any claim or of the commencement of any
proceeding with respect to which such indemnified party
seeks indemnification or contribution pursuant hereto;
provided, however, that the delay or failure to so notify
the indemnifying party shall not relieve the indemnifying
party from any obligation or liability except to the
extent that the indemnifying party has been materially
prejudiced by such delay or failure. The indemnifying
party shall have the right, exercisable by giving written
notice to an indemnified party promptly after the receipt
of written notice from such indemnified party of such
claim or proceeding, to assume, at the indemnifying
party's expense, the defense of any such claim or
proceeding, with counsel reasonably satisfactory to such
indemnified party; provided, however, that an indemnified
party shall have the right to employ separate counsel in
any such claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such
counsel shall be at the expense of such indemnified party
unless: (l) the indemnifying party agrees to pay such
fees and expenses, (2) the indemnifying party fails
promptly to assume the defense of such claim or
proceeding or fails to employ counsel reasonably
satisfactory to such indemnified party or (3) the named
parties to any proceeding (including impleaded parties)
include both such indemnified party and the indemnifying
party, and such indemnified party shall have been advised
in writing (a copy of which shall be furnished to the
indemnifying party) by counsel that there may be one or
more legal defenses available to it which are different
from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not
have the right to assume the defense of such action on
behalf of such indemnified party); in which case the
indemnified party shall have the right to employ counsel
and to assume the defense of such claim or proceeding to
the extent such claim is effected by such defense;
provided, however, that the indemnifying party shall not,
in connection with any one such claim or proceeding or
separate but substantially similar or related claims or
proceedings in the same jurisdiction, arising out of the
same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one firm of
attorneys (together with appropriate local counsel) at
any time for all of the indemnified parties. Whether or
not such defense is assumed by the indemnifying party,
such indemnified party will not be subject to any
liability for any settlement made without its consent.
The indemnifying party shall not consent to entry of any
judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a
release, in form and substance reasonably satisfactory to
the indemnified party, from all liability in respect of
such claim or litigation for which such indemnified party
would be entitled to indemnification hereunder.
(d) Contribution. If the indemnification
provided for in this Section 7 is unavailable to an
indemnified party in respect of any Losses (other than in
accordance with its terms), then each applicable
indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such
Losses, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party, on the one
hand, and such indemnified party, on the other hand, in
connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such
indemnifying party, on the one hand, and indemnified
party, on the other hand, shall be determined by
reference to, among other things, whether any action in
question, including any untrue or alleged untrue
statement of a material fact or omission or alleged
omission to state a material fact, has been taken by, or
relates to information supplied by, such indemnifying
party or indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity
to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include any
reasonable legal or other fees or expenses incurred by
such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be
just and equitable if contribution pursuant to this
Section 7(d) were determined by pro rata allocation or by
any other method of allocation that does not take account
of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the
provision of this Section 7(d), an indemnifying party
that is a Holder shall not be required to contribute any
amount which is in excess of the amount by which the
total proceeds received by such Holder from the sale of
Registrable Securities (net of all underwriting discounts
and commissions) exceeds the amount of any damages that
such indemnifying party 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 Securities Act) shall be entitled to
contribution from any Person who was not guilty of such
fraudulent misrepresentation.
SECTION 8. Miscellaneous.
8.1 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered by hand, mailed by registered
or certified mail (return receipt requested) or sent by
prepaid overnight courier (with proof of service) or
confirmed facsimile transmission to the parties as
follows (or at such other addresses for a party as shall
be specified by like notice) and shall be deemed given on
the date on which so hand-delivered, mailed, delivered or
sent by confirmed facsimile transmission:
To the Company:
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
(212) 768-2029
Attention: Arthur M. Siskind
With a copy (which shall not constitute notice)
to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
To Fox:
Fox Television Stations, Inc.
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
Facsimile: (310) 369-2572
With a copy (which shall not constitute notice)
to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
To a Holder, at the address set forth on
Schedule 8.1 hereto.
8.2 Separability. If any provision of this
Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining
provisions hereof which shall remain in full force and
effect.
8.3 Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties
hereto and their respective heirs, devisees, legatees,
legal representatives, successors and assigns. Except as
set forth herein, neither the Company nor any Holder
shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the
Company and the other Holders, with respect to an
assignment by any Holder, or the Holders, with respect to
an assignment by the Company; provided, that no consent
of the Company or the other Holders shall be required for
the assignment by any Holder of this Agreement or any of
the rights and obligations of such Holder hereunder to
any person described in clause (ii) of the definition of
"Holder" to whom Registrable Securities are transferred
by such Holder. If the Company is a party to a merger,
consolidation or other transaction in which all or part
of the Registrable Securities are converted or changed
into securities of any other person, the Company shall
make appropriate provision for such other person to
become a party to this Agreement and to provide the
registration and other rights with respect to the
securities of such other person.
8.4 Entire Agreement. This Agreement
represents the entire agreement of the parties and shall
supersede any and all previous contracts, arrangements or
understandings between the parties hereto with respect to
the subject matter hereof, including, without limitation,
the Memorandum (as defined in the Merger Agreement).
8.5 Amendments and Waivers. Except as
otherwise provided herein, the provisions of this
Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained
the written consent of Holders of at least a majority in
number of the Registrable Securities then outstanding.
8.6 Publicity. The Holders and the Company
agree that no public release or announcement concerning
the transactions contemplated hereby shall be issued by
either party without the prior consent of the other
party, which consent shall not be unreasonably withheld,
except to the extent that the Holders or the Company is
advised by counsel that such release or announcement is
necessary or advisable under applicable law or the rules
or regulations of any securities exchange, in which case
the party required to make the release or announcement
shall to the extent practicable provide the other party
with an opportunity to review and comment on such release
or announcement in advance of its issuance.
8.7 Expenses. Whether or not the transactions
contemplated hereby are consummated, except as otherwise
provided herein, all costs and expenses incurred in
connection with the execution of this Agreement shall be
paid by the party incurring such costs or expenses.
8.8 Interpretation. The headings contained in
this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of
this Agreement.
8.9 Counterparts. This Agreement may be
executed in two or more counterparts, all of which shall
be considered one and the same agreement, and shall
become effective when two or more such counterparts have
been signed by each of the parties and delivered to the
other party.
8.10 Governing Law. THIS AGREEMENT SHALL BE
CONSTRUED, INTERPRETED, AND GOVERNED IN ACCORDANCE WITH
THE LAWS OF NEW YORK, WITHOUT REFERENCE TO RULES RELATING
TO CONFLICTS OF LAW. Each of the parties hereto
acknowledges that the negotiation of this Agreement
occurred in New York, New York and irrevocably agrees
that any legal suit, action or proceeding brought by
another party hereto arising out of or based upon this
Agreement or the transactions contemplated hereby shall
be instituted in any United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York (the "Courts"), waives any objection which
it may now or hereafter have to the laying of venue of
any such proceedings, submits to the exclusive
jurisdiction of such Courts in any such suit, action or
proceeding and agrees not to commence any such suit,
action or proceeding except in such Courts. The Company
hereby appoints News America Publishing Incorporated,
1211 Avenue of the Americas, New York, New York 10036,
Attention: Arthur M. Siskind, as its authorized agent
(the "Authorized Agent") upon which process may be served
in any such action arising out of or based upon this
Agreement or the transactions contemplated hereby that
may be instituted in any Court by any party hereto and
expressly consents to the jurisdiction of any such Court,
but only in respect of any such action, and waives any
other requirements of or objections to personal
jurisdiction with respect thereto. The Company
represents and warrants that the Authorized Agent has
agreed to act as said agent for service of process, and
the Company agrees to take any and all action, including
the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full
force and effect as aforesaid. If the Authorized Agent
shall cease to act as the Company's agent for service of
process, the Company shall appoint without delay another
such agent and notify the Company of such appointment.
With respect to any such action in the Courts, service of
process upon the Authorized Agent and written notice of
such service to the Company shall be deemed, in every
respect, effective service of process upon the Company.
8.11 Calculation of Time Periods. Except as
otherwise indicated, all periods of time referred to
herein shall include all Saturdays, Sundays and holidays;
provided, that if the date to perform the act or give any
notice with respect to this Agreement shall fall on a day
other than a Business Day, such act or notice may be
timely performed or given if performed or given on the
next succeeding Business Day.
8.12 Immunity Waiver. News Corp. hereby
waives any immunity to which it may become entitled on
the basis of sovereignty or otherwise in respect of its
obligations under this Agreement and agrees not to
interpose any such immunity as a defense to any suit or
action brought or maintained in respect of News Corp.'s
obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first
written above.
THE NEWS CORPORATION LIMITED
By:____________________________
Name:
Title:
FOX TELEVISION STATIONS, INC.
By:____________________________
Name:
Title:
[INVESTOR]
By:____________________________
Name:
Title:
SCHEDULE 8.11
INVESTOR
NOTICE ADDRESSES
EXHIBIT B-1
FORM OF LEGAL OPINION OF
SQUADRON, ELLENOFF, PLESENT & SHEINFELD, LLP,*
COUNSEL FOR NEWS CORP.
1. Fox and each of the other News Corp.
Subsidiaries listed on Schedule A hereto is a corporation
validly existing and in good standing under the laws of
its respective jurisdiction of incorporation.
2. Fox has the corporate power and corporate
authority to enter into the Stock Purchase Agreement and
to consummate the transactions contemplated thereby. The
execution and delivery of the Stock Purchase Agreement by
Fox and the consummation of the transactions contemplated
thereby have been duly authorized by all requisite
corporate action on the part of Fox. The Stock Purchase
Agreement has been executed and delivered by Fox and
(assuming it has been duly authorized, executed and
delivered by the Seller) is a valid and binding
obligation of Fox, enforceable against Fox in accordance
with its terms, except (a) to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity) and (b) rights to
indemnification thereunder that may be limited by Federal
or state securities laws or the policies underlying such
laws.
3. The execution, delivery and performance of
the Stock Purchase Agreement by Fox will not result in a
breach or violation of any provision of the certificate
of incorporation or by-laws of Fox.
4. Each of the Registration Rights Agreement
and the Deposit Agreement is a valid and binding
obligation of News Corp., enforceable against News Corp.
in accordance with its terms, except to the extent that
enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity). Upon the issuance by
the Depositary of the News Corp. Preferred ADRs to be
issued pursuant to the Stock Purchase Agreement against
the deposit of News Corp. Preferred Stock in accordance
with the provisions of the Deposit Agreement, such News
Corp. Preferred ADRs will be legally and validly issued
-----------------------
* To the extent any matter in the Opinion is governed by
the laws of any jurisdiction other than New York or
Delaware, counsel may rely upon the reasonably
acceptable opinion of counsel in such other
jurisdiction.
and will entitle the holders thereof to the rights
specified therein and in the Deposit Agreement.
5. The News Corp. Guaranty is a valid and
binding obligation of News Corp., enforceable against
News Corp. in accordance with its terms, except (a) to
the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles
of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity), (b)
rights to indemnification thereunder may be limited by
United States Federal or state securities laws or the
policies underlying such laws and (c) Section 205 of the
Corporations Law prohibits News Corp. from providing a
guaranty of (A) Fox's indemnification obligations under
the Merger Agreement, the Stock Purchase Agreement and
the Registration Rights Agreement and (B) Fox's
obligations to pay amounts under the Registration Rights
Agreement.
6. All consents, authorizations, approvals
and filings with any court, department, commission,
authority, board, bureau, agency or other instrumentality
of the United States, the State of New York or the State
of Delaware (the "Governmental Authorities") required to
be obtained or made by News Corp. and all consents and
filings required to be obtained or made by News Corp.
under the rules of the NYSE, in each case for the
consummation of the transactions contemplated by the
Stock Purchase Agreement and the issuance and sale of the
News Corp. Preferred ADRs to be issued pursuant to the
Stock Purchase Agreement, have been obtained or made, and
no such consent, authorization, approval or filing with a
Governmental Authority is required to be obtained or made
to effect dividend payments on any shares of News Corp.
Preferred Stock or for the Depositary to effect dividend
payments in U.S. dollars on any News Corp. Preferred
ADRs. We express no opinion with respect to any
consents, authorizations, approvals and filings required
to be made with the FCC.
7. The Registration Statement has become
effective under the Securities Act, and we have been
advised by the SEC that no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the best of our knowledge, no proceeding
for that purpose has been instituted or threatened by the
SEC.
8. The statements contained the Registration
Statement under the caption ["Description of American
Depositary Receipts"] and ["Certain United States Federal
Income Tax Matters," as it relates to the News Corp.
Preferred ADRs to be issued in the Merger,] are accurate
and nothing has been omitted from such statements that
would make such statements misleading in any material
respect.
9. Each of the Registration Statement, as of
the effective date thereof, and the Proxy
Statement/Prospectus, as of the date thereof, and as of
the date hereof (in each case, other than the financial
statements, schedules and other financial data included
therein, as to which we express no opinion) complies as
to form, in all material respects, with the requirements
of the Securities Act and the rules and regulations
thereunder.
In addition, nothing has come to our attention
that would lead us to believe that the Registration
Statement, at the time it 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 Proxy Statement/Prospectus, as of its date and the
date hereof (in each case, other than the financial
statements, schedules and other financial data included
therein, as to which we express no opinion), insofar as
it relates to News Corp., Fox or Merger Sub, contained or
contains an untrue statement of a material fact or
omitted or omits to state any material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading, except that we express no
opinion or belief with respect to the information
contained or incorporated by reference in the
Registration Statement or the Proxy Statement/Prospectus
to the extent such information was furnished by or
relates to the Company.
Schedule A
[to be reasonably agreed upon]
EXHIBIT B-2
FORM OF LEGAL OPINION OF
ALLEN ALLEN & HEMSLEY,**
AUSTRALIAN COUNSEL FOR NEWS CORP.
1. News Corp. and each of the News Corp.
Subsidiaries listed on Schedule A hereto is a corporation
duly incorporated under the laws of the jurisdiction set
forth opposite its respective name in Schedule A hereto
and is capable of being sued in its corporate name.
There is no application pending, or to our knowledge,
threatened for News Corp. or any of such News Corp.
Subsidiaries to be wound up, dissolved or deregistered
nor is there any application pending or, to our
knowledge, threatened for the appointment of a receiver,
receiver and manager or administrator in respect of News
Corp., the whole or any part of the assets of News Corp,
such News Corp. Subsidiaries or the whole or any part of
the assets of such News Corp. Subsidiaries.
2. All of the shares of News Corp. Preferred
Stock underlying the News Corp. Preferred ADRs to be
issued pursuant to the Stock Purchase Agreement have been
duly and validly issued to the Depositary, are fully paid
and non-assessable, conform with the description thereof
in the Registration Statement and have been admitted for
quotation on the Australian Stock Exchange. The
certificates for the shares of News Corp. Preferred Stock
underlying the News Corp. Preferred ADRs to be issued
pursuant to the Stock Purchase Agreement have been duly
and validly issued and delivered to the Depositary, and
the name of the Depositary has been entered in the
Register of Shareholders of News Corp. in respect of such
shares of News Corp. Preferred Stock.
3. The issue of the shares of News Corp.
Preferred Stock underlying the News Corp. Preferred ADRs
to be issued pursuant to the Stock Purchase Agreement (a)
complied with the Corporations Law, the Memorandum and
Articles of Association of News Corp. and the Listing
Rules of the Australian Stock Exchange and (b) did not
violate any preemptive or similar rights of any holder of
any equity securities of News Corp. under the
Corporations Law, the listing rules of the ASX or the
rights attaching to such securities.
4. News Corp. has the corporate power and
corporate authority to enter into the Stock Purchase
Agreement, the News Corp. Guaranty and the Registration
Rights Agreement and to consummate the transactions
contemplated thereby. The execution and delivery of the
Stock Purchase Agreement, the News Corp. Guaranty and the
Registration Rights Agreement by News Corp. and the
consummation of the transactions contemplated thereby
have been duly authorized by all requisite corporate
------------------
* To the extent any matter in the Opinion is governed by
the laws of any jurisdiction other than Australia,
counsel may rely upon the reasonably acceptable
opinion of counsel in such other jurisdiction.
action on the part of News Corp. Each of the Stock
Purchase Agreement and the Registration Rights Agreement
has been executed and delivered by News Corp. and
(assuming it has been duly authorized, executed and
delivered by the Seller and the Investors, as applicable)
is a valid and binding obligation of News Corp.,
enforceable against News Corp. in accordance with its
terms, except (a) to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws not or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity) and (b) rights to
indemnification thereunder may be limited by United
States Federal or state securities laws or the policies
underlying such laws. The News Corp. Guaranty is a valid
and binding obligation of News Corp., enforceable against
News Corp. in accordance with its terms, except (a) to
the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or
other similar laws not or hereafter in effect relating to
creditors' rights generally and (ii) general principles
of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity), (b)
rights to indemnification thereunder may be limited by
United States Federal or state securities laws or the
policies underlying such laws and (c) Section 205 of the
Corporations Law of South Australia prohibits News Corp.
from providing a guaranty of (A) Fox's indemnification
obligations under the Merger Agreement, the Stock
Purchase Agreement and the Registration Rights Agreement
and (B) Fox's obligations to pay amounts under the
Registration Rights Agreement.
5. The execution, delivery and performance of
the Stock Purchase Agreement, the News Corp. Guaranty and
the Registration Rights Agreement by News Corp. will not
result in a breach or violation of any provision of the
Memorandum and Articles of Association of News Corp.
6. No consents, authorizations, approvals or
filings are required to be obtained or made by News Corp.
under the laws of Australia nor are any consents or
filings required to be obtained or made by News Corp.
under the rules of the ASX, in each case, for the
consummation of the transactions contemplated by the
Stock Purchase Agreement, and the issue and sale of the
shares of News Corp. Preferred Stock underlying the News
Corp. Preferred ADRs to be issued pursuant to the Stock
Purchase Agreement and the issuance and sale of the News
Corp. Preferred ADRs to be issued pursuant to the Stock
Purchase Agreement, and no such consent, authorization,
approval or filing is required to be obtained or made to
effect dividend payments on any shares of News Corp.
Preferred Stock or for the Depositary to effect dividend
payments in U.S. dollars on any News Corp. Preferred
ADRs.
7. The choice of New York law to govern the
Stock Purchase Agreement, the News Corp. Guaranty and the
Registration Rights Agreement is, under the laws of
Australia, a valid choice of law, and subject to certain
exceptions and time limitations, any final judgment for a
sum of money against News Corp. in relation to the Stock
Purchase Agreement or the Registration Rights Agreement
rendered by a competent United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York, would be recognized and enforced by the
courts of Australia.
8. Under the laws of the Commonwealth of
Australia, the submission by News Corp. to the
jurisdiction of any United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York and the designation of the law of the
State of New York to apply to the Stock Purchase
Agreement, the News Corp. Guaranty and the Registration
Rights Agreement is binding upon News Corp. and, if
properly brought to the attention of the court in
accordance with the laws of the Commonwealth of
Australia, would be enforceable in a judicial proceeding
in the Commonwealth of Australia.
9. News Corp. is not entitled to any immunity
on the basis of sovereignty or otherwise in respect of
its obligations under the Stock Purchase Agreement, the
News Corp. Guaranty or the Registration Rights Agreement
and could not impose any such immunities as a defense to
any suit or action brought or maintained in respect of
its obligations under the Stock Purchase Agreement, the
News Corp. Guaranty or the Registration Rights Agreement;
and if News Corp. were to become entitled to such
immunity, News Corp.'s waiver of immunity in Section 5.14
of the Stock Purchase Agreement, Section 7 of the News
Corp. Guaranty and Section 8.12 of the Registration
Rights Agreement is a valid and legally binding
obligation of News Corp.
10. News Corp. has the power to submit, and
has taken all necessary corporate action to submit, to
the jurisdiction of United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York, and to appoint News America Publishing
Incorporated as the authorized agent of News Corp. for
the purposes and to the extent described in Section 9.4
of the Stock Purchase Agreement, Section 8.2 of the News
Corp. Guaranty and Section 8.10 of the Registration
Rights Agreement.
11. No holder of Company Common Stock, Company
Preferred Stock, Company Stock Options or Company
Warrants (other than News Corp., Merger Sub, Fox or any
other News Corp. Subsidiary) will be liable for any stamp
duty or other issuance or transfer taxes in Australia or
to any taxing authority thereof or therein in connection
with (a) the authorization, issuance, sale and delivery
of the shares of News Corp. Preferred Stock underlying
the News Corp. Preferred ADRs to be issued pursuant to
the Stock Purchase Agreement, (b) the deposit with the
Depositary of the shares of News Corp. Preferred Stock
underlying the News Corp. Preferred ADRs to be issued
pursuant to the Stock Purchase Agreement, (c) the sale
and delivery by Fox of the News Corp. Preferred ADRs to
be issued pursuant to the Stock Purchase Agreement, or
(d) the consummation of any other transactions
contemplated by the Stock Purchase Agreement in
connection with the issuance and sale of the shares
underlying the News Corp. Preferred Stock to be issued
pursuant to the Stock Purchase Agreement and the News
Corp. Preferred ADRs to be issued pursuant to the Stock
Purchase Agreement.
12. The statements contained the Registration
Statement under the captions ["Description of Capital
Stock"], ["Australian Tax Matters"] and ["Exchange
Controls and Other Limitations Affecting Security
Holders,"] and the statement regarding the enforceability
of civil liabilities against Australian persons under
["Enforceability of Judgments,"] insofar as they relate
to matters of Australian law, are accurate and nothing
has been omitted from such statements that would make
such statements misleading in any material respect.
13. The Deposit Agreement is a valid and
legally binding obligation of News Corp., enforceable
against News Corp. in accordance with its terms, except
to the extent that enforcement thereof may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or
other similar laws not or hereafter in effect relating to
creditors' rights generally and (b) general principles of
equity (regardless of whether enforcement is considered
in a proceeding at law or in equity).
Schedule A
[to be reasonably agreed upon with regard to Australian
entities only]
EXHIBIT C
FORM OF LEGAL OPINION OF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
COUNSEL FOR THE SELLER
1. Each of the Seller and Holdings is validly
existing and in good standing under the laws of its
respective jurisdiction of incorporation.
2. The Seller has the corporate power and
corporate authority to enter into the Stock Purchase
Agreement and to consummate the transactions contemplated
thereby. The execution and delivery of the Stock
Purchase Agreement by the Seller and the consummation of
the transactions contemplated thereby have been duly
authorized by all requisite corporate action on the part
of the Seller. The Stock Purchase Agreement has been
executed and delivered by the Seller and (assuming it has
been duly authorized, executed and delivered by News
Corp. and Fox) is a valid and binding obligation of the
Seller, enforceable against the Seller in accordance with
its terms, except (a) to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity) and (b) that rights to
indemnification thereunder may be limited by Federal or
state securities laws or the policies underlying such
laws.
3. The execution and delivery by the Seller
of the Stock Purchase Agreement and the performance by
the Seller of its obligations thereunder, in accordance
with its terms, do not (i) conflict with the Restated
Certificate of Incorporation or the By-laws of the
Seller, (ii) constitute a violation of or a default under
any Applicable Contracts (as hereinafter defined) or
(iii) cause the creation of any security interest or lien
upon any of the property of the Company pursuant to any
Applicable Contracts. We do not express any opinion,
however, as to whether the execution, delivery or
performance by the Seller of the Stock Purchase Agreement
will constitute a violation of or a default under any
covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial
condition or results of operations of the Seller.
"Applicable Contracts" mean those agreements or
instruments set forth on a Schedule to a certificate
provided by the Seller and which have been identified to
us.
4. Neither the execution or delivery by the
Seller of the Stock Purchase Agreement nor the
consummation by the Seller of the transactions
contemplated thereby in accordance with the terms and
provisions thereof will violate any Applicable Law (as
hereinafter defined). "Applicable Laws" shall mean those
laws, rules and regulations of the State of New York, the
general corporate law of the State of Delaware and of the
United States of America which, in our experience, are
normally applicable to transactions of the type
contemplated by the Stock Purchase Agreement.
5. No Governmental Approval (as hereinafter
defined), which has not been obtained or taken and is not
in full force and effect, is required to authorize or is
required in connection with the execution, delivery or
performance of the Stock Purchase Agreement by the
Seller, except that we express no opinion with regard to
the securities or Blue Sky laws of the various states.
"Governmental Approval" means any consent, approval,
license, authorization or validation of, or filing,
recording or registration with, any Governmental
Authority pursuant to Applicable Laws.
EXHIBIT 10.1
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated as
of September 24, 1996, among Fox Television Stations,
Inc., a Delaware corporation ("Fox"), NWCG (Parent)
Holdings Corporation, a Delaware corporation ("NWCGP"),
and NWCG Holdings Corporation, a Delaware corporation and
a wholly owned subsidiary of NWCGP ("Holdings," and
together with NWCGP, each a "Stockholder" and
collectively, the "Stockholders").
WHEREAS, The News Corporation Limited, a South
Australia corporation that has an indirect interest in
Fox ("News Corp."), Fox, Fox Acquisition Co., Inc., a
Delaware corporation and a wholly owned subsidiary of
Fox, and New World Communications Group Incorporated, a
Delaware corporation (the "Company"), are parties to the
Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement").
WHEREAS, the Merger (as defined in the Merger
Agreement) is subject to certain conditions, including
the approval and adoption of the Merger Agreement and the
Company Charter Proposal (as defined in the Merger
Agreement) by the holders of a majority of the
outstanding shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"), of the
Company and the Class B Common Stock, par value $.01 per
share (the "Class B Common Stock"), of the Company voting
together as a single class.
WHEREAS, News Corp., Fox and NWCGP are parties
to the Stock Purchase Agreement, dated as of the date
hereof (the "Stock Purchase Agreement"), pursuant to
which Fox has agreed to purchase from NWCGP all of the
shares of capital stock of the Company owned by NWCGP and
all of the outstanding shares of capital stock of
Holdings.
WHEREAS, each Stockholder is the record and
beneficial owner of the shares of Class B Common Stock
set forth opposite such Stockholder's name on the
signature pages hereto (such shares, together with any
additional shares of capital stock of the Company
beneficially owned by such Stockholder after the date
hereof and prior to the Termination Date (as defined in
Section 5.4), being collectively referred to herein as
the "Stockholder Shares" of such Stockholder).
WHEREAS, as a condition to the willingness of
Fox to enter into the Stock Purchase Agreement and the
Merger Agreement, and as an inducement to it to do so,
each Stockholder has agreed for the benefit of Fox as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements
contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Capitalized terms
used but not defined herein shall have the meanings
assigned to such terms in the Merger Agreement.
For purposes of this Agreement, the following
terms shall have the following meanings:
"Affiliate" and "Associate", when used with
reference to any person, shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this
Agreement; provided that with respect to any Stockholder,
such terms shall not include the Company, any Subsidiary
of the Company or any other Stockholder party hereto.
A person shall be deemed the "beneficial owner"
of, and shall be deemed to "beneficially own," and shall
be deemed to have "beneficial ownership" of:
(i) any securities that such person or any of
such person's Affiliates or Associates is deemed to
"beneficially own" within the meaning of Rule 13d-3
under the Exchange Act (without regard to section
(d)(1)(i) thereof), as in effect on the date of this
Agreement; and
(ii) any securities (the "underlying
securities") that such person or any of such
person's Affiliates or Associates 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,
rights, warrants or options, or otherwise (it being
understood that such person shall also be deemed to
be the beneficial owner of the securities
convertible into or exchangeable for the underlying
securities).
ARTICLE II
COVENANTS OF THE STOCKHOLDERS
Section 2.1 Agreement to Vote. At any meeting
of the stockholders of the Company held prior to the
Termination Date (as defined in Section 5.4), however
called, and at every adjournment or postponement thereof
prior to the Termination Date, or in connection with any
written consent of the stockholders of the Company given
prior to the Termination Date, each Stockholder shall
vote all of the Stockholder Shares beneficially owned by
such Stockholder (a) in favor of the Merger Agreement,
the Company Charter Proposal and each of the transactions
contemplated thereby and any actions required in
furtherance hereof and thereof; and (b) against any
action or agreement that would, directly or indirectly,
result in a breach in any material respect of any
covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger
Agreement. Notwithstanding the foregoing, each
Stockholder shall remain free to vote the Stockholder
Shares with respect to any matter not covered by the
preceding sentence in any manner it deems appropriate.
None of the Stockholders shall enter into any agreement
or understanding with any person prior to the Termination
Date, directly or indirectly, to vote, grant any proxy or
give instructions with respect to the voting of the
Stockholder Shares of such Stockholder in any manner
inconsistent with the first sentence of this Section 2.1.
Section 2.2 Proxies and Voting Agreements.
(a) Except as set forth in Section 2.2 of
the letter from the Stockholders, dated the date hereof,
addressed to Fox (the "Stockholder Disclosure Letter"),
each Stockholder hereby revokes any and all previous
proxies granted with respect to matters set forth in
Section 2.1 with respect to the Stockholder Shares of
such Stockholder.
(b) Prior to the Termination Date, none
of the Stockholders shall, directly or indirectly, except
as contemplated hereby, grant any proxies or powers of
attorney with respect to matters set forth in Section
2.1, deposit any of the Stockholder Shares owned by such
Stockholder into a voting trust or enter into a voting
agreement with respect to any of the Stockholder Shares,
in each case with respect to such matters.
Section 2.3 Transfer of Stockholder Shares by
the Stockholder. Prior to the Termination Date and
except as expressly provided by the Stock Purchase
Agreement, none of the Stockholders shall (a) place any
Lien (other than the Lien created by the Holdings
Indenture) on any Stockholder Shares of such Stockholder,
other than pursuant to this Agreement, or (b) sell,
transfer or otherwise dispose of any Stockholder Shares
owned by such Stockholder, other than a sale, transfer or
other disposition (w) pursuant to the Stock Purchase
Agreement, (x) to any other party hereto, or (y) to an
Affiliate of a Stockholder who becomes a party to this
Agreement.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND
ADDITIONAL COVENANTS OF THE STOCKHOLDERS
Each Stockholder represents, warrants and covenants
to Fox, as to itself that:
Section 3.1 Ownership. Such Stockholder is as
of the date hereof the beneficial and record owner of the
Stockholder Shares set forth opposite the name of such
Stockholder on the signature pages hereto, such
Stockholder has the sole right to vote such Stockholder
Shares and, except as set forth in Section 3.1 of the
Stockholder Disclosure Letter, there are no restrictions
on rights of disposition or other Liens pertaining to
such Stockholder Shares. Except as set forth in Section
3.1 of the Stockholder Disclosure Letter, none of the
Stockholder Shares of such Stockholder is subject to any
voting trust or other agreement, arrangement or
restriction with respect to the voting of such
Stockholder Shares.
Section 3.2 Authority and Non-Contravention.
Such Stockholder has all requisite corporate power and
authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and
performance by such Stockholder and the consummation by
such Stockholder of the transactions contemplated hereby
have been duly authorized by all necessary corporate
action on the part of such Stockholder. Such actions by
such Stockholder (a) require no action by or in respect
of, or filing with, any Governmental Entity with respect
to such Stockholder, other than any required filings
under Section 13 of the Exchange Act, (b) except as set
forth in Section 3.2 of the Stockholder Disclosure
Letter, do not and will not violate or contravene any
provision of applicable law or regulation, judgment,
injunction, order or decree binding on such Stockholder
or result in the imposition of any Lien on any asset of
such Stockholder or any of its Affiliates (other than as
provided in this Agreement with respect to Stockholder
Shares) or (c) do not and will not conflict with or
result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would
become a default) under any Contract to which a
Stockholder is a party.
Section 3.3 Binding Effect. This Agreement
has been duly executed and delivered by such Stockholder
and is a legal, valid and binding agreement of such
Stockholder, enforceable against such Stockholder in
accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and
by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief
are subject.
Section 3.4 Total Shares. The Stockholder
Shares listed under the name of such Stockholder on the
signature pages hereto are the only shares of capital
stock of the Company owned beneficially or of record as
of the date hereof by such Stockholder and, except as
set forth in Section 3.4 of the Stockholder Disclosure
Letter, such Stockholder does not have any option to
purchase or right to subscribe for or otherwise acquire
any securities of the Company and has no other interest
in or voting rights with respect to any other securities
of the Company.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF FOX
Fox represents, warrants and covenants to each
Stockholder that:
Section 4.1 Corporate Power and Authority.
Fox has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations
hereunder. The execution, delivery and performance by
Fox of this Agreement and the consummation by Fox of the
transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part
of Fox.
Section 4.2 Binding Effect. This Agreement
has been duly executed and delivered by Fox and is a
legal, valid and binding agreement of Fox, enforceable
against Fox in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors'
rights generally and by equitable principles to which the
remedies of specific performance and injunctive and
similar forms of relief are subject.
ARTICLE V
MISCELLANEOUS
Section 5.1 Expenses. All costs and expenses
incurred in connection with this Agreement shall be paid
by the party incurring such costs or expenses.
Section 5.2 Further Assurances. From time to
time, at the request of Fox, in the case of a
Stockholder, or at the request of a Stockholder, in the
case of Fox, and without further consideration, each
party shall execute and deliver or cause to be executed
and delivered such additional documents and instruments
and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by
this Agreement.
Section 5.3 Specific Performance. Each
Stockholder agrees that Fox would be irreparably damaged
if for any reason such Stockholder fails to perform any
of such Stockholder's obligations under this Agreement,
and that Fox would not have an adequate remedy at law for
money damages in such event. Accordingly, Fox shall be
entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this
Agreement by such Stockholder. This provision is without
prejudice to any other rights that Fox may have against
such Stockholder for any failure to perform its
obligations under this Agreement.
Section 5.4 Amendments; Termination. This
Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a
written agreement executed by the parties hereto. The
representations, warranties, covenants and agreements set
forth in Articles II, III and IV shall terminate, except
with respect to liability for prior breaches thereof,
upon the termination of the Merger Agreement in
accordance with its terms or, if earlier, the Effective
Time of the Merger (the "Termination Date").
Section 5.5 Successors and Assigns. The
provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective estates, heirs, successors and permitted
assigns; provided, however, that a party may not assign,
delegate or otherwise transfer any of such party's rights
or obligations under this Agreement without the consent
of the other parties hereto and any purported assignment,
delegation or transfer without such consent shall be null
and void.
Section 5.6 Certain Events. Each Stockholder
agrees that this Agreement and the obligations hereunder
shall attach to the Stockholder Shares beneficially owned
by such Stockholder and shall be binding upon any person
to which legal or beneficial ownership of such shares
shall pass, whether by operation of law or otherwise.
Section 5.7 Entire Agreement. This Agreement,
together with the Stockholder Disclosure Letter,
constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written
and oral, among the parties with respect to the subject
matter hereof, including, without limitation, the
Memorandum.
Section 5.8 Notices. All notices, requests,
claims, demands and other communications hereunder shall
be in writing and shall be deemed given (i) on the first
Business Day following the date received, if delivered
personally or by facsimile (with telephonic confirmation
of receipt by the addressee), (ii) on the Business Day
following timely deposit with an overnight courier
service, if sent by overnight courier specifying next day
delivery and (iii) on the first Business Day that is at
least five days following deposit in the mails, if sent
by first class mail, to the parties at the following
addresses (or at such other address for a party as shall
be specified by like notice):
If to a Stockholder, to:
c/o MacAndrews & Forbes Holdings, Inc.
35 East 62nd Street
New York, New York 10021
Facsimile: (212) 572-5056
Attention: Barry F. Schwartz
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Suite 3400
Los Angeles, California 90071
Facsimile: (213) 687-5600
Attention: Thomas C. Janson, Jr.
If to Fox, to:
Fox Television Stations, Inc
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
Facsimile: (310) 369-2572
Attention: Jay Itzkowitz
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
Section 5.9 Governing Law. This Agreement
shall be governed by and construed in accordance with the
internal laws of the State of Delaware. Each of the
parties hereto acknowledges that the negotiation of this
Agreement occurred in New York, New York and irrevocably
agrees that any legal suit, action or proceeding brought
by another party hereto arising out of or based upon this
Agreement or the transactions contemplated hereby shall
be instituted in any United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York (the "Courts"), waives any objection which
it may now or hereafter have to the laying of venue of
any such proceedings, submits to the exclusive
jurisdiction of such Courts in any such suit, action or
proceeding and agrees not to commence any such suit,
action or proceeding except in such Courts. Fox hereby
appoints News America Publishing Incorporated, 1211
Avenue of the Americas, New York, New York 10036,
Attention: Arthur M. Siskind, as its authorized agent
(the "Authorized Agent") upon which process may be served
in any such action arising out of or based upon this
Agreement or the transactions contemplated hereby that
may be instituted in any Court by any party hereto and
expressly consents to the jurisdiction of any such Court,
but only in respect of any such action, and waives any
other requirements of or objections to personal
jurisdiction with respect thereto. Fox represents and
warrants that the Authorized Agent has agreed to act as
said agent for service of process, and Fox agrees to take
any and all action, including the filing of any and all
documents and instruments, that may be necessary to
continue such appointment in full force and effect as
aforesaid. If the Authorized Agent shall cease to act as
Fox's agent for service of process, Fox shall appoint
without delay another such agent and notify the
Stockholders of such appointment. With respect to any
such action in the Courts, service of process upon the
Authorized Agent and written notice of such service to
Fox shall be deemed, in every respect, effective service
of process upon Fox.
Section 5.10 Counterparts; Effectiveness.
This Agreement may be executed in two or more
counterparts, all of which shall be considered one and
the same agreement, and, as to a Stockholder, shall
become effective when two or more counterparts have been
signed by each of such Stockholder and Fox and delivered
to the other.
Section 5.11 Descriptive Headings. The
descriptive headings used herein are inserted for
convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of
this Agreement.
Section 5.12 Severability. Whenever possible,
each provision or portion of any provision of this
Agreement will be interpreted in such manner as to be
effective and valid but if any provision or portion of
any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability will not affect any other
provision or portion of any provision, and this Agreement
will be reformed, construed and enforced as if such
invalid, illegal or unenforceable provision or portion of
any provision had never been contained herein. The
parties shall endeavor in good faith negotiations to
replace any invalid, illegal or unenforceable provision
with a valid provision the effects of which come as close
as possible to those of such invalid, illegal or
unenforceable provision.
Section 5.13 Attorneys' Fees. If any action
at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and
necessary disbursements, in addition to any other relief
to which such party may be entitled.
IN WITNESS WHEREOF, Fox and the Stockholders
have caused this Agreement to be duly executed as of the
day and year first above written.
FOX TELEVISION STATIONS, INC.
By: /s/ Jay Itzkowitz
Jay Itzkowitz
Senior Vice President
2,682,236 shares of NWCG (PARENT) HOLDINGS CORPORATION
Class B Common Stock
By: /s/ Glenn P. Dickes
Glenn P. Dickes
Vice President
34,510,000 shares of NWCG HOLDINGS CORPORATION
Class B Common Stock
By: /s/ Glenn P. Dickes
Glenn P. Dickes
Vice President
EXHIBIT 10.2
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated as
of September 24, 1996, among Fox Television Stations,
Inc., a Delaware corporation ("Fox"), The News
Corporation Limited (ACN 007 910 330), a South Australia
corporation that has an indirect interest in Fox ("News
Corp."), and Apollo Advisors, L.P., a Delaware limited
partnership (the "Stockholder").
WHEREAS, News Corp., Fox, Fox Acquisition Co.,
Inc., a Delaware corporation and a wholly owned
subsidiary of Fox, and New World Communications Group
Incorporated, a Delaware corporation (the "Company"), are
parties to the Agreement and Plan of Merger, dated as of
the date hereof (the "Merger Agreement").
WHEREAS, the Merger (as defined in the Merger
Agreement) is subject to certain conditions, including
the approval and adoption of the Merger Agreement by the
holders of a majority of the outstanding shares of Class
A Common Stock, par value $.01 per share (the "Class A
Common Stock"), of the Company and the Class B Common
Stock, par value $.01 per share (the "Class B Common
Stock"), of the Company voting together as a single
class.
WHEREAS, if the Merger Agreement is approved
(the "Series A Preferred Stock Approval") by a majority
of the issued and outstanding shares of the 6.735%
Cumulative Redeemable Convertible Preferred Stock, Series
A, par value $.01 per share, of the Company (the "Series
A Preferred Stock), each issued and outstanding share of
Series A Preferred Stock shall be converted into the
right to receive News Corp. Preferred ADRs as provided by
Section 2.1(d)(i) of the Merger Agreement.
WHEREAS, as of the date hereof, the Stockholder
is the record and beneficial owner of the securities of
the Company set forth opposite the Stockholder's name on
the signature pages hereto (such securities, together
with any other shares of capital stock of the Company
beneficially owned by such Stockholder after the date
hereof and prior to the Termination Date (as defined in
Section 5.4), whether through the acquisition or exercise
or conversion of any of such securities or otherwise,
being collectively referred to herein as the "Stockholder
Shares").
WHEREAS, Fox has requested that the Stockholder
enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements
contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Capitalized terms
used but not defined herein shall have the meanings
assigned to such terms in the Merger Agreement.
For purposes of this Agreement, the following
terms shall have the following meanings:
"Affiliate" and "Associate", when used with
reference to any person, shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this
Agreement; provided that with respect to any Stockholder,
such terms shall not include the Company, any Subsidiary
of the Company or any other Stockholder party hereto.
A person shall be deemed the "beneficial owner"
of, and shall be deemed to "beneficially own," and shall
be deemed to have "beneficial ownership" of:
(i) any securities that such person or any of
such person's Affiliates or Associates is deemed to
"beneficially own" within the meaning of Rule 13d-3
under the Exchange Act (without regard to section
(d)(1)(i) thereof), as in effect on the date of this
Agreement; and
(ii) any securities (the "underlying
securities") that such person or any of such
person's Affiliates or Associates 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,
rights, warrants or options, or otherwise (it being
understood that such person shall also be deemed to
be the beneficial owner of the securities
convertible into or exchangeable for the underlying
securities).
ARTICLE II
COVENANTS OF THE STOCKHOLDERS
Section 2.1 Agreement to Vote. At any meeting
of the stockholders of the Company (including, without
limitation, the holders of Series A Preferred Stock
voting as a class) held prior to the Termination Date (as
defined in Section 6.4), however called, and at every
adjournment or postponement thereof prior to the
Termination Date, or in connection with any written
consent of the stockholders of the Company (including,
without limitation, the holders of Series A Preferred
Stock consenting as a class) given prior to the
Termination Date, the Stockholder shall vote all of the
Stockholder Shares beneficially owned by the Stockholder
as of the record date for such vote or consent that the
Stockholder is entitled to vote in accordance with the
terms of such security (a) in favor of the Merger
Agreement and each of the transactions contemplated
thereby and any actions required in furtherance hereof
and thereof, including, specifically and without
limitation, the Series A Preferred Stock Approval and the
Company Charter Proposal; and (b) against any action or
agreement that would, directly or indirectly, result in a
breach in any material respect of any covenant,
representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement.
Notwithstanding the foregoing, (i) the Stockholder shall
remain free to vote the Stockholder Shares with respect
to any matter not covered by the preceding sentence in
any manner it deems appropriate and (ii) except as
specifically provided above, the Stockholder shall not be
required to approve any affiliate transactions that are
required to be approved by the holders of Series A
Preferred Stock. The Stockholder shall not enter into
any agreement or understanding with any person prior to
the Termination Date, directly or indirectly, to vote,
grant any proxy or give instructions with respect to the
voting of the Stockholder Shares in any manner
inconsistent with the first sentence of this Section 2.1,
provided, that the foregoing shall not in any way
preclude the Stockholder from taking any action
contemplated by Section 2.3.
Section 2.2 Proxies and Voting Agreements.
(a) The Stockholder hereby revokes any
and all previous proxies granted with respect to matters
set forth in Section 2.1 for the Stockholder Shares of
such Stockholder).
(b) Prior to the Termination Date, the
Stockholder shall not, directly or indirectly, except as
contemplated hereby, grant any proxies or powers of
attorney with respect to matters set forth in Section
2.1, deposit any of the Stockholder Shares into a voting
trust or enter into a voting agreement with respect to
any of the Stockholder Shares, in each case with respect
to such matters, provided, that the foregoing shall not
in any way preclude the Stockholder from taking any
action contemplated by Section 2.3.
Section 2.3 Transfer of Stockholder Shares by
the Stockholder. Notwithstanding any other provision of
this Agreement, the Stockholder may sell, transfer or
otherwise dispose of, or place any Lien on, the
Stockholder Shares free and clear of any restrictions
hereunder on the voting of such shares.
ARTICLE III
ADDITIONAL COVENANTS
Section 3.1 Registration Rights Agreement.
Prior to the Closing Date, News Corp. and Fox shall enter
into a Registration Rights Agreement with the Stockholder
with respect to the News Corp. Preferred ADRs to be
received through the Merger or upon exercise or
conversion of the Stockholder Shares in the form of
Exhibit A to the Stock Purchase Agreement, dated as of
the date hereof, among New Corp., Fox and NWCG (Parent)
Holdings Corporation, a Delaware corporation (the
"Registration Rights Agreement").
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND
ADDITIONAL COVENANTS OF THE STOCKHOLDER
The Stockholder represents, warrants and covenants
to Fox that:
Section 4.1 Ownership. The Stockholder is as
of the date hereof the beneficial owner of the
Stockholder Shares set forth opposite the name of the
Stockholder on the signature pages hereto, the
Stockholder has the sole right to vote the Stockholder
Shares on such matters as to which such Stockholder
Shares are entitled to vote and there are no restrictions
on the exercise of such voting rights. None of the
Stockholder Shares is subject to any voting trust or
other agreement, arrangement or restriction with respect
to the voting of the Stockholder Shares.
Section 4.2 Authority and Non-Contravention.
The Stockholder has all requisite partnership power and
authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and
performance by the Stockholder and the consummation by
the Stockholder of the transactions contemplated hereby
have been duly authorized by all necessary partnership
action on the part of the Stockholder. Such actions by
the Stockholder (a) require no action by or in respect
of, or filing with, any Governmental Entity with respect
to the Stockholder, other than any required filings under
Section 13 of the Exchange Act, (b) do not and will not
violate or contravene any provision of applicable law or
regulation, judgment, injunction, order or decree binding
on the Stockholder or result in the imposition of any
Lien on any asset of the Stockholder (other than as
provided in this Agreement with respect to Stockholder
Shares) or (c) do not and will not conflict with or
result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would
become a default) under any Contract to which the
Stockholder is a party.
Section 4.3 Binding Effect. This Agreement
has been duly executed and delivered by the Stockholder
and is a legal, valid and binding agreement of the
Stockholder, enforceable against the Stockholder in
accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and
by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief
are subject.
Section 4.4 Total Shares. The Stockholder
Shares listed under the name of the Stockholder on the
signature pages hereto are the only securities of the
Company owned beneficially or of record as of the date
hereof by such Stockholder and such Stockholder does not
have any other option to purchase or right to subscribe
for or otherwise acquire any securities of the Company
and has no other interest in or voting rights with
respect to any other securities of the Company.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF NEWS CORP.
News Corp. represents, warrants and covenants to the
Stockholder that:
Section 5.1 Organization. Each of News Corp.
and Fox is a corporation duly incorporated or organized,
validly existing and, if applicable, in good standing
under the laws of the jurisdiction of its incorporation
or organization and has the requisite power and authority
and all governmental permits, approvals and other
authorizations necessary to own, lease and operate its
properties and to carry on its business as it is now
being conducted, except where the failure to be so
organized, existing or in good standing or to have such
power, authority and governmental permits, approvals and
other authorizations would not, individually or in the
aggregate, have a News Corp. Material Adverse Effect.
Section 5.2 Authority. Each of News Corp. and
Fox has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transactions
contemplated hereby. The execution and delivery of this
Agreement by each of News Corp. and Fox and the
consummation by each of News Corp. and Fox of the
Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate
proceedings on the part of News Corp. or Fox are
necessary to authorize this Agreement or to consummate
the Transactions. This Agreement has been duly and
validly executed and delivered by each of News Corp. and
Fox and, assuming the due authorization, execution and
delivery thereof by the other parties hereto, constitutes
the legal, valid and binding obligation of each of News
Corp. and Fox enforceable against each of them in
accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and
by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief
are subject and except that rights to indemnity hereunder
may be subject to Federal or state securities laws or the
policies underlying such laws.
Section 5.3 No Conflicts. (a) The execution
and delivery of this Agreement by each of News Corp. and
Fox do not, and the performance of their respective
obligations under this Agreement and the consummation of
the Transactions by News Corp. and Fox will not, (i)
conflict with or violate the certificate of incorporation
or bylaws or equivalent organizational documents of News
Corp. or Fox, (ii) subject to making the filings and
obtaining the approvals identified in Section 5.3(b),
conflict with or violate any Laws applicable to Fox or by
which any property or asset of Fox is bound or affected,
or (iii) subject to making the filings and obtaining the
approvals identified in Section 5.3(b), conflict with or
result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would
become a default) under, result in the loss or
modification in a manner materially adverse to News Corp.
or Fox of any material right or benefit under, or give to
others any right of termination, amendment, acceleration,
repurchase or repayment, increased payments or
cancellation of, or result in the creation of any Liens
on any property or asset of News Corp. or Fox pursuant
to, any Contracts, to which News Corp. or Fox is a party
or by which News Corp. or Fox or any property or asset of
News Corp. or Fox is bound or affected, except, in the
case of clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences which
would not prevent or delay in any material respect
consummation of the Transactions, or otherwise,
individually or in the aggregate, prevent News Corp. or
Fox from performing its obligations under this Agreement
in any material respect, and would not, individually or
in the aggregate, have a News Corp. Material Adverse
Effect.
(b) Except as set forth in Section 4.5 of the
disclosure letter from The News Corporation Limited,
dated the date hereof, addressed to New World
Communications Group Incorporated (the "Disclosure
Letter"), the execution and delivery of this Agreement by
News Corp. and Fox do not, and the performance of its
obligations under this Agreement and the consummation of
the Transactions by News Corp. and Fox will not, require
any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity,
except (i) for (A) applicable requirements, if any, of
the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and state securities or
"blue sky" laws, (B) the pre-merger notification
requirements of the HSR Act, and (C) the approval of the
Transactions by the Federal Communications Commission
(the "FCC") under the Communications Act of 1934, as
amended, and the rules and regulations of the FCC
promulgated thereunder and (ii) where the failure to
obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would
not, individually or in the aggregate, prevent or delay
in any material respect consummation of the Transactions,
or otherwise prevent Fox from performing its obligations
under this Agreement in any material respect, and would
not, individually or in the aggregate, have a News Corp.
Material Adverse Effect.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Expenses. All costs and expenses
incurred in connection with this Agreement shall be paid
by the party incurring such costs or expenses.
Section 6.2 Further Assurances. From time to
time, at the request of News Corp. or Fox, in the case of
the Stockholder, or at the request of the Stockholder, in
the case of News Corp. or Fox, and without further
consideration, each party shall execute and deliver or
cause to be executed and delivered such additional
documents and instruments and take all such further
action as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
Section 6.3 Specific Performance.
(a) The Stockholder agrees that News
Corp. and Fox would be irreparably damaged if for any
reason the Stockholder fails to perform any of the
Stockholder's obligations under this Agreement, and that
News Corp. and Fox would not have an adequate remedy at
law for money damages in such event. Accordingly, News
Corp. and Fox shall be entitled to specific performance
and injunctive and other equitable relief to enforce the
performance of this Agreement by the Stockholder. This
provision is without prejudice to any other rights that
News Corp. and Fox may have against the Stockholder for
any failure to perform its obligations under this
Agreement.
(b) Each of News Corp. and Fox agrees
that the Stockholder would be irreparably damaged if for
any reason News Corp. or Fox fails to perform any of its
obligations under this Agreement, and that the
Stockholder would not have an adequate remedy at law for
money damages in such event. Accordingly, the
Stockholder shall be entitled to specific performance and
injunctive and other equitable relief to enforce the
performance of this Agreement by News Corp. and Fox.
This provision is without prejudice to any other rights
that the Stockholder may have against News Corp. or Fox
for any failure to perform their obligations under this
Agreement.
Section 6.4 Amendments; Termination. This
Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a
written agreement executed by the parties hereto. The
representations, warranties, covenants and agreements set
forth in Articles II, III and IV shall terminate, except
with respect to liability for prior breaches thereof, on
the date (the "Termination Date") of the termination of
the Merger Agreement in accordance with its terms or, if
earlier, the Effective Time of the Merger, but in any
event not later than June 30, 1997.
Section 6.5 Successors and Assigns. The
provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective estates, heirs, successors and permitted
assigns; provided, however, that a party may not assign,
delegate or otherwise transfer any of such party's rights
or obligations under this Agreement without the consent
of the other parties hereto and any purported assignment,
delegation or transfer without such consent shall be null
and void. Notwithstanding the foregoing, no purchaser or
transferee of Stockholder Shares (other than an Affiliate
of the Stockholder) shall be bound by the provisions of
this Agreement and any such purchaser or transferee shall
acquire such shares free of any restrictions pursuant to
this Agreement.
Section 6.6 Certain Events. The Stockholder
agrees that this Agreement and the obligations hereunder
shall attach to the Stockholder Shares beneficially owned
by the Stockholder and shall be binding upon any
Affiliate of the Stockholder to which legal or beneficial
ownership of such shares shall pass, whether by operation
of law or otherwise.
Section 6.7 Entire Agreement. This Agreement
constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written
and oral, among the parties with respect to the subject
matter hereof.
Section 6.8 Notices. All notices, requests,
claims, demands and other communications hereunder shall
be in writing and shall be deemed given (i) on the first
Business Day following the date received, if delivered
personally or by facsimile (with telephonic confirmation
of receipt by the addressee), (ii) on the Business Day
following timely deposit with an overnight courier
service, if sent by overnight courier specifying next day
delivery and (iii) on the first Business Day that is at
least five days following deposit in the mails, if sent
by first class mail, to the parties at the following
addresses (or at such other address for a party as shall
be specified by like notice):
If to the Stockholder, to:
Apollo Advisors, L.P.
1999 Avenue of the Stars, Suite 1900
Los Angeles, California 90067
Facsimile: (310) 201-4166
Attention: Michael Weiner
If to Fox, to:
Fox Television Stations, Inc
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
Facsimile: (310) 369-2572
Attention: Jay Itzkowitz
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
If to News Corp., to:
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 768-2029
Attention: Arthur M. Siskind
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
Section 6.9 Governing Law. This Agreement
shall be governed by and construed in accordance with the
internal laws of the State of Delaware. Each of the
parties hereto acknowledges that the negotiation of this
Agreement occurred in New York, New York and irrevocably
agrees that any legal suit, action or proceeding brought
by another party hereto arising out of or based upon this
Agreement or the transactions contemplated hereby shall
be instituted in any United States Federal or New York
State court in the Borough of Manhattan, The City of New
York, New York (the "Courts"), waives any objection which
it may now or hereafter have to the laying of venue of
any such proceedings, submits to the exclusive
jurisdiction of such Courts in any such suit, action or
proceeding and agrees not to commence any such suit,
action or proceeding except in such Courts. Each of News
Corp. and Fox hereby appoints News America Publishing
Incorporated, 1211 Avenue of the Americas, New York, New
York 10036, Attention: Arthur M. Siskind, as its
authorized agent (the "Authorized Agent") upon which
process may be served in any such action arising out of
or based upon this Agreement or the transactions
contemplated hereby that may be instituted in any Court
by any party hereto and expressly consents to the
jurisdiction of any such Court, but only in respect of
any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto.
Each of News Corp. and Fox represents and warrants that
the Authorized Agent has agreed to act as said agent for
service of process, and each of News Corp. and Fox agrees
to take any and all action, including the filing of any
and all documents and instruments, that may be necessary
to continue such appointment in full force and effect as
aforesaid. If the Authorized Agent shall cease to act as
the agent of each of News Corp. and Fox for service of
process, News Corp. or Fox, as the case may be, shall
appoint without delay another such agent and notify the
Stockholder of such appointment. With respect to any
such action in the Courts, service of process upon the
Authorized Agent and written notice of such service to
News Corp. or Fox, as the case may be, shall be deemed,
in every respect, effective service of process upon News
Corp. or Fox, as the case may be.
Section 6.10 Counterparts; Effectiveness.
This Agreement may be executed in two or more
counterparts, all of which shall be considered one and
the same agreement.
Section 6.11 Descriptive Headings. The
descriptive headings used herein are inserted for
convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of
this Agreement.
Section 6.12 Severability. Whenever possible,
each provision or portion of any provision of this
Agreement will be interpreted in such manner as to be
effective and valid but if any provision or portion of
any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability will not affect any other
provision or portion of any provision, and this Agreement
will be reformed, construed and enforced as if such
invalid, illegal or unenforceable provision or portion of
any provision had never been contained herein. The
parties shall endeavor in good faith negotiations to
replace any invalid, illegal or unenforceable provision
with a valid provision the effects of which come as close
as possible to those of such invalid, illegal or
unenforceable provision.
Section 6.13 Attorneys' Fees. If any action
at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and
necessary disbursements, in addition to any other relief
to which such party may be entitled.
Section 6.14 Disclosure Letter. The
Stockholder shall be entitled to rely upon Section 4.5 of
the Disclosure Letter as fully as if such letter were
addressed to the Stockholder.
75233
IN WITNESS WHEREOF, Fox, News Corp. and the
Stockholder have caused this Agreement to be duly
executed as of the day and year first above written.
FOX TELEVISION STATIONS, INC.
By: /s/ Jay Itzkowitz
Jay Itzkowitz
Senior Vice President
THE NEWS CORPORATION LIMITED
By: /s/ Arthur M. Siskind
Arthur M. Siskind
Director
712,128 Series A Preferred
Stock APOLLO ADVISORS, L.P.
0 Class A Warrants
258,037 Class B Warrants
By: /s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Vice President
EXHIBIT 10.3
GUARANTY
THIS GUARANTY (this "Agreement"), dated as of
September 24, 1996, is entered into by The News
Corporation Limited (ACN 007 910 330), a South Australia
Corporation ("News Corp."), in favor of the Guaranteed
Parties (as defined in the fourth paragraph below).
WHEREAS, News Corp., New World Communications
Group Incorporated, a Delaware corporation ("New World"),
NWCG (Parent) Holdings Corporation, a Delaware
corporation ("Parent"), and NWCG Holdings Corporation, a
Delaware corporation, are party to the Memorandum of
Understanding, dated as of July 17, 1996 (the
"Memorandum").
WHEREAS, News Corp. has assigned, pursuant to
the terms thereof, the Memorandum to Fox Television
Stations, Inc., a Delaware corporation in which News
Corp. has an indirect interest ("Fox").
WHEREAS, Fox is entering into the following
agreements (collectively, the "Guaranteed Agreements"):
(1) Agreement and Plan of Merger, dated as of
the date hereof, among New World, News Corp., Fox
and Fox Acquisition Co., Inc., a Delaware
corporation and a wholly owned subsidiary of Fox
(the "Merger Agreement").
(2) Voting Agreement, dated as of the date
hereof, among Fox and Parent.
(3) Stock Purchase Agreement, dated as of the
date hereof, among News Corp., Fox and Parent,
including, without limitation, the Registration
Rights Agreement attached thereto as Exhibit A.
(4) Purchase and Sale Agreement, dated as of
the date hereof, among Fox and 1440 Sepulveda
Limited Partnership, a California limited
partnership ("1440").
(5) Assignment and Assumption Agreement, dated
as of the date hereof, among Fox and Four Star
Holdings Corp., a Delaware corporation ("Four
Star").
WHEREAS, it is a condition precedent to the
willingness of each of New World, Parent, 1440 and Four
Star (collectively, the "Guaranteed Parties") to enter
into the Guaranteed Agreements that News Corp. shall have
executed this Guaranty.
WHEREAS, News Corp. will receive value and
obtain benefits in exchange for delivering this Guaranty
of Fox's obligations under the Guaranteed Agreements,
including, without limitation, the novation of News
Corp.'s obligations under the Memorandum, the receipt of
which value and benefits are hereby acknowledged, and
News Corp. accordingly desires to enter into this
Guaranty in order to satisfy the condition precedent set
forth in the foregoing paragraph.
NOW, THEREFORE, in consideration of the
premises and other good and valuable consideration, the
receipt of which is hereby acknowledged, News Corp.
hereby agrees as follows:
1. Guaranty. News Corp. hereby, to the
fullest extent permitted by applicable law,
unconditionally, absolutely, continuingly and irrevocably
guarantees to the Guaranteed Parties and any other
persons entitled to indemnification pursuant to the
Guaranteed Agreements (the "Indemnified Persons") (a) the
punctual payment when due of all amounts, costs,
expenses, liabilities and obligations of every nature of
Fox from time to time owed or payable to the Guaranteed
Parties and any other Indemnified Persons under the
Guaranteed Agreements, and in the event Fox shall fail in
any manner whatsoever to pay, when required, any of such
payment obligations, then News Corp. will pay, or cause
to be duly and punctually paid, such payment obligations
of Fox thereunder, and (b) the punctual performance of
all of the obligations of Fox under the Guaranteed
Agreements and agrees that if for any reason whatsoever
Fox shall, in any manner, fail or be unable to duly,
punctually and fully perform any such obligation under
the Guaranteed Agreements, News Corp. shall forthwith
perform each and every such obligation, or cause each
such obligation to be performed, all without regard to
any exercise or non-exercise by the Guaranteed Parties or
any other Indemnified Person of any right, remedy, power
or privilege under or in respect of this Agreement or the
Guaranteed Agreements.
2. Obligations Absolute. News Corp. agrees
that its obligations under this Agreement will be paid
and performed strictly in accordance with the terms of
this Agreement, regardless of any misrepresentation,
irregularity or other defect in this Agreement or any
Guaranteed Agreement, or the invalidity or
unenforceability hereof or thereof. The obligations of
News Corp. under this Agreement constitute a present and
continuing guaranty of payment and not of collection,
shall be, to the fullest extent permitted by applicable
law, absolute and unconditional, shall not be subject to
any counterclaim, set-off, deduction or defense based
upon any claim News Corp. may have against Fox, the
Guaranteed Parties or any other Indemnified Persons, and
shall remain in full force and effect without regard to,
and shall not be released, discharged or in any way
affected or impaired by, any thing, event, happening,
matter, circumstance or condition whatsoever (whether or
not News Corp. shall have any knowledge or notice thereof
or consent thereto). The liability of News Corp. under
this Agreement shall be absolute, unconditional, present
and continuing until all of the obligations of Fox under
the Guaranteed Agreements (the "Obligations") have been
indefeasibly paid in full or performed, as applicable,
irrespective of:
(a) any attempt to collect from Fox;
(b) any lack of validity or enforceability of
this Agreement or any Guaranteed Agreement, or any
provision hereof or thereof, or any other agreement
or instrument relating hereto or thereto or any
assignment or transfer of any of the foregoing or
any failure or omission to enforce or agreement not
to enforce, or the stay or enjoining by order of
court, by operation of law or otherwise, of the
exercise or non-exercise of any right, power,
privilege or remedy under or with respect to the
foregoing;
(c) any amendment, waiver, renewal, extension
or release of, or any consent to departure from or
other action or inaction with respect to, any
Guaranteed Agreement or any other agreement or
instrument relating hereto or thereto;
(d) any new conveyance of, or any exchange,
release or non-perfection of, any collateral or
security interest, acceptance by the Guaranteed
Parties or any other Indemnified Person of partial
payment from Fox, or any release or amendment or
waiver of or consent to departure from any other
guaranty or security, for all or any of the
Obligations;
(e) any merger or consolidation of News Corp.
or any News Corp. Subsidiary (as defined in Section
6.1), including Fox, into or with any other person,
or any other change in News Corp. or Fox whatsoever,
or any sale, lease or transfer of any or all of the
assets of News Corp. or any News Corp. Subsidiary,
including Fox, to any other person;
(f) any absence of any notice to, or knowledge
by, News Corp. of the existence or occurrence of any
of the matters or events set forth in the foregoing
clauses (a) through (e), above;
(g) any sale, transfer or other disposition by
News Corp., directly or indirectly, of any stock of
Fox;
(h) any bankruptcy, insolvency,
reorganization, arrangement, composition,
adjustment, dissolution, liquidation or other like
proceeding relating to Fox, or any action taken with
respect to this Agreement or any of the Guaranteed
Agreements by any trustee or receiver, or by any
court, in any such proceeding, whether or not News
Corp. shall have notice or knowledge of any of the
foregoing, or
(i) any other happening, event or circumstance
which might otherwise constitute a defense available
to, or a discharge of, the obligations of News Corp.
hereunder;
provided, however, that anything to the contrary
contained herein notwithstanding, News Corp. shall not be
deemed to have waived any claims that News Corp. may have
against a Guaranteed Party as a result of any breach by
such Guaranteed Party of its obligations under the
Guaranteed Agreements, it being understood that this
proviso shall not create any right of offset with respect
to any such claim.
3. Waiver. News Corp. hereby waives
promptness, diligence, all set-offs, counterclaims,
presentments, protests and notice of acceptance and any
other notice with respect to any of the Obligations and
with respect to this Agreement and any requirement of the
Guarantied Parties or any other Indemnified Persons to
protect, secure, perfect or insure any security interest
or lien or any property subject hereto or exhaust any
right or take any action against Fox or any other person
or entity or any collateral. No single or partial
exercise of any right hereunder shall preclude any other
or further exercise thereof or the exercise of any other
right. To the fullest extent permitted by law, News
Corp. waives all principles or provisions of law
(statutory or otherwise), regulation or order now or
hereafter in effect in any jurisdiction which are or
might be in conflict with the terms of this Agreement or
affecting any rights of any of the Guaranteed Parties or
any other Indemnified Person hereunder and any legal or
equitable discharge of New Corp.'s obligations hereunder
and the benefit of any statute of limitations affecting
its liability hereunder or the enforcement hereof. News
Corp. will receive substantial direct and indirect
benefits from the arrangements contemplated by this
Agreement and the Guaranteed Agreements, and the waivers
set forth in this Agreement are knowingly made in
contemplation of such benefits. The remedies herein
provided are cumulative and not exclusive of any remedies
provided by law.
4. Subrogation Waiver. News Corp. agrees
that it shall not have any rights (direct or indirect) of
subrogation, contribution, reimbursement,
indemnification, or other rights of payment or recovery
from Fox for any payments made or obligations performed
by News Corp. hereunder, under any other agreement or
otherwise, and News Corp. hereby irrevocably waives and
releases, absolutely and unconditionally, any such rights
of subrogation, contribution, reimbursement,
indemnification and other rights of payment or recovery
which it may now have or hereafter acquire with respect
to any such payments made or obligations performed until
such payment or obligation owed to any Guaranteed Party
or any other Indemnified Person is irrevocably discharged
or defeased.
5. Reinstatement. The obligations of News
Corp. under this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any
time any payment or performance of any of the Obligations
is rescinded, annulled or must otherwise be returned by
Fox, upon the insolvency, bankruptcy or reorganization of
Fox or otherwise, all as though such payment had not been
made or performance had not occurred, as applicable.
6. Representations and Warranties of News
Corp. News Corp. represents and warrants as follows:
6.1 Organization and Qualifications;
Subsidiaries.
(a) Each of News Corp. and each Material
News Corp. Subsidiary (as defined below) is a
corporation, partnership or other legal entity duly
incorporated or organized, validly existing and, if
applicable, in good standing under the laws of the
jurisdiction of its incorporation or organization and has
the requisite power and authority and all governmental
permits, approvals and other authorizations necessary to
own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the
failure to be so organized, existing or, if applicable,
in good standing or to have such power, authority and
governmental permits, approvals and other authorizations
would not, individually or in the aggregate, have a
material adverse effect on the business, assets,
financial or other condition, or results of operations of
News Corp. and the Subsidiaries of News Corp., and
Twentieth Holdings Corporation and its Subsidiaries,
including, but not limited to, Fox (each, a "News Corp.
Subsidiary"), taken as a whole (a "News Corp. Material
Adverse Effect").
(b) Fox, Merger Sub and each other News
Corp. Subsidiary that (i) constitutes a Significant
Subsidiary of News Corp. within the meaning of Rule 102
of Regulation S-X of the SEC, (ii) owns the material
assets of or is the licensee of a United States broadcast
television station, or (iii) is otherwise material to
the business or operations of News Corp. and the News
Corp. Subsidiaries, taken as a whole, is referred to
herein as a "Material News Corp. Subsidiary." For
purposes of this Agreement, a "Subsidiary" of any person
means (A) a corporation in which such person, a
subsidiary of such person, or such person and one or more
subsidiaries of such person, directly or indirectly, at
the date of determination, has either (i) a majority
ownership interest or (ii) the power, under ordinary
circumstances, to elect, or to direct the election of, a
majority of the board of directors of such corporation or
(B) a partnership in which such person, a subsidiary of
such person, or such person and one or more subsidiaries
of such person (i) is, at the date of determination, a
general partner of such partnership, or (ii) has a
majority ownership interest in such partnership or the
right to elect, or to direct the election of, a majority
of the governing body of such partnership, or (C) any
other person (other than a corporation or a partnership)
in which such person, a subsidiary of such person, or
such person and one or more subsidiaries of such person
has either (i) at least a majority ownership interest or
(ii) the power to elect, or to direct the election of, a
majority of the directors or other governing body of such
person.
6.2 Authority Relative to This Agreement.
(a) News Corp. has all necessary corporate
power and authority to execute and deliver this Agreement
and to perform its obligations hereunder.
(b) The execution and delivery of this
Agreement by News Corp. and the performance by News Corp.
of its obligations hereunder have been duly and validly
authorized by all necessary corporate action and no other
corporate proceedings on the part of News Corp. are
necessary to authorize this Agreement or to perform its
obligations hereunder. This Agreement has been duly and
validly executed and delivered by News Corp. and
constitutes the legal, valid and binding obligation of
News Corp., enforceable against News Corp. in accordance
with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally and by equitable
principles to which the remedies of specific performance
and injunctive and similar forms of relief are subject
and except that rights to indemnity under the Guaranteed
Agreements may be subject to Federal or state securities
laws or the policies underlying such laws.
6.3 No Conflict; Required Filings and
Consents.
(a) The execution and delivery of this
Agreement by News Corp. do not, and the performance of
its obligations hereunder will not, (i) conflict with or
violate the articles of incorporation or bylaws or
equivalent organizational documents of News Corp., (ii)
subject to making the filings and obtaining the approvals
identified in Section 6.3(b), conflict with or violate
any law, rule, regulation, order, judgment or decree
applicable to News Corp., Fox or any other Material News
Corp. Subsidiary or by which any property or asset of
News Corp., Fox or any other Material News Corp.
Subsidiary is bound or affected, or (iii) subject to
making the filings and obtaining the approvals identified
in Section 6.3(b), conflict with or result in any breach
of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under,
result in the loss (by News Corp., Fox or any other
Material News Corp. Subsidiary) or modification in a
manner materially adverse to News Corp., Fox and the
other News Corp. Subsidiaries of a material right or
benefit under, or give to others any right of
termination, amendment, acceleration, repurchase or
repayment, increased payments or cancellation of, or
result in the creation of any security interests, liens,
claims, pledges, options, rights of first refusal,
agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever on any
property or asset of News Corp., Fox or any other
Material News Corp. Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise, or other instrument or
obligation to which News Corp., Fox or any other Material
News Corp. Subsidiary is a party or by which News Corp.,
Fox or any other Material News Corp. Subsidiary or any
property or asset of News Corp., Fox or any other
Material News Corp. Subsidiary is bound or affected,
except, in the case of clauses (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay in any
material respect performance by News Corp. of its
obligations hereunder, or otherwise, individually or in
the aggregate, prevent News Corp. from performing its
obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a
News Corp. Material Adverse Effect.
(b) Except as set forth in Section 4.5 of the
disclosure letter from The News Corporation Limited,
dated the date hereof, addressed to New World
Communications Group Incorporated (the "Disclosure
Letter"), the execution and delivery of this Agreement by
News Corp. and the performance of its obligations under
this Agreement and the consummation of its obligations
will not require any consent, approval, authorization or
permit of, or filing with or notification to, any
federal, state or local governmental or regulatory
agency, authority, commission or instrumentality, whether
domestic or foreign, except (i) for (A) applicable
requirements, if any, of the Securities Act of 1933, as
amended, the Securities Exchange Act or 1934, as amended,
and the state securities or "blue sky" laws, (B) the pre-
merger notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder, (C) the approval of the
Transactions by the Federal Communications Commission
(the "FCC") under the Communications Act of 1934, as
amended, and the rules and regulations of the FCC
promulgated thereunder, (D) the filing of the Merger
Certificate (as defined in the Merger Agreement), and (E)
the filing of listing applications and the filing of an
application for quotation with the stock exchanges on
which the News Corp. Preferred Stock (as defined in the
Merger Agreement) and the News Corp. Preferred ADRs (as
defined in the Merger Agreement) are listed or quoted,
and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in
the aggregate, prevent or delay in any material respect
consummation of its obligations under this Agreement or
otherwise prevent News Corp. from performing its
obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a
News Corp. Material Adverse Effect.
6.4 SEC Reports and Financial Statements.
Each form, report, schedule and registration statement
filed by News Corp. with the SEC since December 31, 1994
and prior to the date hereof (as such documents have been
amended prior to the date hereof, the "News Corp. SEC
Reports"), as of their respective dates, complied in all
material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and
regulations thereunder. None of the News Corp. SEC
Reports, as of their respective dates, contained any
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, in the light of the
circumstances under which they were made, not misleading,
except for such statements, if any, as have been modified
or superseded by subsequent filings prior to the date
hereof. The consolidated financial statements of News
Corp. and the News Corp. Subsidiaries included in such
reports have been prepared in accordance with Australian
generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and fairly
present (subject, in the case of the unaudited interim
financial statements, to normal, year-end audit
adjustments) the consolidated financial position of News
Corp. and the News Corp. Subsidiaries as at the dates
thereof and the consolidated results of their operations
and cash flows for the periods then ended, and such
financial statements and the reconciliations to United
States generally accepted accounting principles comply as
to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the SEC with respect thereto. Since March
31, 1996, neither News Corp. nor any of the News Corp.
Subsidiaries has incurred any liabilities or obligations
(whether absolute, accrued, fixed, contingent,
liquidated, unliquidated or otherwise and whether due or
to become due) of any nature, except liabilities,
obligations or contingencies (a) which are reflected on
the unaudited balance sheet of News Corp. and the News
Corp. Subsidiaries as at March 31, 1996 (including the
notes thereto), or (b) which (i) were incurred in the
ordinary course of business after March 31, 1996 and
consistent with past practices, (ii) are disclosed in the
News Corp. SEC Reports filed after March 31, 1996 or
(iii) would not, individually or in the aggregate, have a
News Corp. Material Adverse Effect. Since March 31,
1996, there has been no change in any of the significant
accounting (including tax accounting) policies, practices
or procedures of News Corp. or any News Corp. Material
Subsidiary.
6.5 Absence of Certain Changes or Events.
Except as contemplated by this Agreement or as disclosed
in any News Corp. SEC Report, since March 31, 1996, (a)
News Corp. and the News Corp. Subsidiaries have conducted
their respective businesses only in the ordinary course,
consistent with past practice, and have not taken any of
the actions set forth in Section 5.2 of the Merger
Agreement, and (b) there has not occurred or arisen any
event that, individually or in the aggregate, has had or,
insofar as reasonably can be foreseen, is likely in the
future to have, a News Corp. Material Adverse Effect,
other than events or developments generally affecting the
industry in which News Corp. and the News Corp.
Subsidiaries operate.
6.6 Litigation. Except as disclosed in
Section 4.9 of the Disclosure Letter or in the News Corp.
SEC Reports, there are no claims, suits, actions or
proceedings pending or, to News Corp.'s knowledge,
threatened or contemplated, nor are there any
investigations or reviews by any Governmental Entity
pending or, to News Corp.'s knowledge, threatened or
contemplated, against, relating to or affecting News
Corp. or any of the News Corp. Subsidiaries, which could
reasonably be expected to have, individually or in the
aggregate, a News Corp. Material Adverse Effect, or to
prohibit or materially restrict the performance of its
obligations hereunder, nor is there any judgment, decree,
order, injunction, writ or rule of any court,
governmental department, commission, agency,
instrumentality or authority or any arbitrator
outstanding against News Corp. or any News Corp.
Subsidiary having, or which, insofar as can be reasonably
foreseen, in the future is likely to have, any such News
Corp. Material Adverse Effect. In addition, there have
not been any developments with respect to any of the
claims, suits, actions, proceedings, investigations or
reviews disclosed in the News Corp. SEC Reports filed
prior to the date hereof which, insofar as can be
reasonably foreseen, in the future are likely to have a
News Corp. Material Adverse Effect.
7. Sovereign Immunity. News Corp. hereby
waives any immunity to which it may become entitled on
the basis of sovereignty or otherwise in respect of its
obligations under this Agreement and agrees not to
interpose any such immunity as a defense to any suit or
action brought or maintained in respect of News Corp.'s
obligations under this Agreement.
8. Miscellaneous.
8.1 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered by hand, mailed by registered
or certified mail (return receipt requested) or sent by
prepaid overnight courier (with proof of service) or
confirmed facsimile transmission to the parties as
follows (or at such other addresses for a party as shall
be specified by like notice) and shall be deemed given on
the date on which so hand-delivered, mailed, delivered or
sent by confirmed facsimile transmission:
To News Corp.:
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 768-2029
Attn: Arthur M. Siskind
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 697-6686
Attn: Joel I. Papernik
To a Guaranteed Party, at the address set forth in
the Guaranteed Agreement to which such notice relates,
with a copy (which shall not constitute notice) to the
notice parties for such Guaranteed Party set forth in
such agreement.
8.2 Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (OTHER THAN TO THE EXTENT REQUIRED
BY THE DELAWARE GENERAL CORPORATION LAW), WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. News
Corp. and the parties to the Guaranteed Agreements
acknowledge that the negotiation of this Agreement
occurred in New York, New York and irrevocably agree that
any legal suit, action or proceeding brought by News
Corp. or any Guaranteed Party arising out of or based
upon this Agreement or the transactions contemplated
hereby shall be instituted in any United States Federal
or New York State court in the Borough of Manhattan, The
City of New York, New York (the "Courts"), waive any
objection which it may now or hereafter have to the
laying of venue of any such proceedings, submit to the
exclusive jurisdiction of such Courts in any such suit,
action or proceeding and agree not to commence any such
suit, action or proceeding except in such Courts. News
Corp. hereby appoints News America Publishing
Incorporated, 1211 Avenue of the Americas, New York, New
York 10036, Attention: Arthur M. Siskind, as its
authorized agent (the "Authorized Agent") upon which
process may be served in any such action arising out of
or based upon this Agreement or the transactions
contemplated hereby that may be instituted in any Court
by any party hereto and expressly consents to the
jurisdiction of any such Court, but only in respect of
any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto.
News Corp. represents and warrants that the Authorized
Agent has agreed to act as said agent for service of
process, and News Corp. agrees to take any and all
action, including the filing of any and all documents and
instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. If
the Authorized Agent shall cease to act as News Corp.'s
agent for service of process, News Corp. shall appoint
without delay another such agent and notify the Company
of such appointment. With respect to any such action in
the Courts, service of process upon the Authorized Agent
and written notice of such service to News Corp. shall be
deemed, in every respect, effective service of process
upon News Corp.
8.3 Expenses. All costs and expenses incurred
in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring
such expenses.
8.4 Headings. The headings contained in this
Agreement are for reference purposes and shall not affect
in any way the meaning or interpretation of this
Agreement.
8.5 Severability. Any term or provision of
this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or
unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement
is so broad as to be unenforceable, the provision shall
be interpreted to be only so broad as is enforceable.
8.6 Attorneys' Fees. If any action at law or
in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which
such party may be entitled.
8.7 Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the
benefit of News Corp., the Guaranteed Parties and any
other Indemnified Person and their respective estates,
heirs, successors and permitted assigns; provided,
however, that News Corp. shall remain responsible for all
of its obligations under this Agreement notwithstanding
any assignment, delegation or other transfer any of its
obligations hereunder.
8.8 Entire Agreement. This Agreement,
together with the Disclosure Letter, constitutes the
entire agreement, supersedes all other prior agreements
and understandings, both written and oral, among the
parties with respect to the subject matter hereof,
including, without limitation, the Memorandum.
8.9 Disclosure Letter. News Corp. agrees that
each Guaranteed Party and any other Indemnified Person
shall be entitled to rely upon Sections 4.5 and 4.9 of
the Disclosure Letter as fully as if such letter were
addressed to each such person.
IN WITNESS WHEREOF, this Agreement has been
signed on behalf of News Corp. as of the date first above
written.
SIGNED, SEALED AND
DELIVERED BY THE NEWS
CORPORATION LIMITED (ACN
007 910 330) as a deed:
By: /s/ Arthur M. Siskind
Arthur M. Siskind
Director
EXHIBIT 10.4
GUARANTY
THIS GUARANTY (this "Agreement"), dated as of
September 24, 1996, is entered into by Mafco Holdings
Inc., a Delaware corporation ("Mafco"), in favor of The
News Corporation Limited, a South Australia corporation
(ACN 007 910 330) ("News Corp."), and Fox Television
Stations, Inc., a Delaware corporation ("Fox" and,
together with News Corp., the "Guaranteed Parties").
WHEREAS, NWCG (Parent) Holdings Corporation, a
Delaware corporation and an affiliate of Mafco ("NWCGP"),
is entering into the Stock Purchase Agreement, dated as
of the date hereof, among NWCGP, News Corp. and Fox (the
"Stock Purchase Agreement").
WHEREAS, NWCGP and NWCG Holdings Corporation, a
Delaware corporation and a wholly owned subsidiary of
NWCGP ("NWCG Holdings"), are entering into the Voting
Agreement, dated as of the date hereof, with Fox (the
"Voting Agreement").
WHEREAS, Four Star Holdings Corporation, a
Delaware corporation and an affiliate of Mafco ("Four
Star"), is entering into the Assignment and Assumption
Agreement, dated as of the date hereof, with Fox (the
"Assignment Agreement").
WHEREAS, 1440 Sepulveda Limited Partnership, a
California limited partnership and an affiliate of Mafco
("1440"), is entering into the Purchase and Sale
Agreement, dated as of the date hereof, with Fox (the
"Real Estate Agreement" and, together with the Stock
Purchase Agreement, the Voting Agreement and the
Assignment Agreement, the "Guaranteed Agreements").
WHEREAS, it is a condition precedent to the
willingness of the Guaranteed Parties to enter into the
Guaranteed Agreements that Mafco shall have executed this
Guaranty.
WHEREAS, Mafco will receive value and obtain
benefits in exchange for delivering this Guaranty of
certain of the obligations of NWCGP, NWCG Holdings, Four
Star and 1440 (together, the "Obligors") under the
Guaranteed Agreements, the receipt of which value and
benefits are hereby acknowledged, and Mafco accordingly
desires to enter into this Guaranty in order to satisfy
the condition precedent set forth in the foregoing
paragraph.
NOW, THEREFORE, in consideration of the
premises and other good and valuable consideration, the
receipt of which is hereby acknowledged, Mafco hereby
agrees as follows:
1. Guaranty. (a) Mafco hereby, to the
fullest extent permitted by law, unconditionally,
absolutely, continuingly and irrevocably guarantees to
the Guaranteed Parties and any other persons entitled to
indemnification pursuant to the Guaranteed Agreements
(the "Indemnified Persons") (i) the punctual payment when
due of all amounts, costs, expenses, liabilities and
obligations of every nature of the respective Obligors
from time to time owed or payable to the Guaranteed
Parties and any other Indemnified Persons as a result of
the Guaranteed Obligations (as defined below), and in the
event the Obligors shall fail in any manner whatsoever to
pay, when required, any of such payment obligations, then
Mafco will pay, or cause to be duly and punctually paid,
such payment obligations of the Obligors thereunder, and
(ii) the punctual performance of all of the Guaranteed
Obligations and agrees that if for any reason whatsoever
the Obligors shall, in any manner, fail or be unable to
duly, punctually and fully perform any such obligation
under the Guaranteed Obligations, Mafco shall forthwith
perform each and every such obligation, or cause each
such obligation to be performed, all without regard to
any exercise or non-exercise by the Guaranteed Parties or
any other Indemnified Person of any right, remedy, power
or privilege under or in respect of this Agreement or the
Guaranteed Agreements.
(b) For purposes of this Agreement,
"Guaranteed Obligations" shall mean:
(i) the indemnification obligations of
NWCGP pursuant to Sections 8.2(a) and 8.2(c) of the
Stock Purchase Agreement and the obligations of
NWCGP pursuant to Section 5.10 of the Stock Purchase
Agreement;
(ii) the obligations of NWCGP and NWCG
Holdings under the Voting Agreement;
(iii) the indemnification obligations of
Holdings pursuant to Section 7(a) of the Assignment
Agreement; and
(iv) the obligations of 1440 under the
Real Estate Agreement.
2. Obligations Absolute. Mafco agrees that
its obligations under this Agreement will be paid and
performed strictly in accordance with the terms of this
Agreement, regardless of any misrepresentation,
irregularity or other defect in this Agreement or any
Guaranteed Agreement, or the invalidity or
unenforceability hereof or thereof. The obligations of
Mafco under this Agreement constitute a present and
continuing guaranty of payment and not of collection,
shall be, to the fullest extent permitted by applicable
law, absolute and unconditional, shall not be subject to
any counterclaim, set-off, deduction or defense based
upon any claim Mafco may have against the Obligors, the
Guaranteed Parties or any other Indemnified Persons, and
shall remain in full force and effect without regard to,
and shall not be released, discharged or in any way
affected or impaired by, any thing, event, happening,
matter, circumstance or condition whatsoever (whether or
not Mafco shall have any knowledge or notice thereof or
consent thereto). The liability of Mafco under this
Agreement shall be absolute, unconditional, present and
continuing until all of the Guaranteed Obligations have
been indefeasibly paid in full or performed, as
applicable, irrespective of:
(a) any attempt to collect from the Obligors;
(b) any lack of validity or enforceability of
this Agreement or any Guaranteed Agreement, or any
provision hereof or thereof, or any other agreement
or instrument relating hereto or thereto or any
assignment or transfer of any of the foregoing or
any failure or omission to enforce or agreement not
to enforce, or the stay or enjoining by order of
court, by operation of law or otherwise, of the
exercise or non-exercise of any right, power,
privilege or remedy under or with respect to the
foregoing;
(c) any amendment, waiver, renewal, extension
or release of, or any consent to departure from or
other action or inaction with respect to, any
Guaranteed Agreement or any other agreement or
instrument relating hereto or thereto;
(d) any new conveyance of, or any exchange,
release or non-perfection of, any collateral or
security interest, acceptance by the Guaranteed
Parties or any other Indemnified Person of partial
payment from the Obligors, or any release or
amendment or waiver of or consent to departure from
any other guaranty or security, for all or any of
the Guaranteed Obligations;
(e) any merger or consolidation of Mafco or
the Obligors into or with any other person, or any
other change in Mafco or the Obligors whatsoever, or
any sale, lease or transfer of any or all of the
assets of Mafco or the Obligors to any other person;
(f) any absence of any notice to, or knowledge
by, Mafco of the existence or occurrence of any of
the matters or events set forth in the foregoing
clauses (a) through (e), above;
(g) any sale, transfer or other disposition by
Mafco, directly or indirectly, of any stock of the
Obligors;
(h) any bankruptcy, insolvency,
reorganization, arrangement, composition,
adjustment, dissolution, liquidation or other like
proceeding relating to the Obligors, or any action
taken with respect to this Agreement or any of the
Guaranteed Agreements by any trustee or receiver, or
by any court, in any such proceeding, whether or not
Mafco shall have notice or knowledge of any of the
foregoing; or
(i) any other happening, event or circumstance
which might otherwise constitute a defense available
to, or a discharge of, the obligations of Mafco
hereunder;
provided, however, that anything to the contrary
contained herein notwithstanding, Mafco shall not be
deemed to have waived any claims that Mafco may have
against a Guaranteed Party as a result of any breach by
such Guaranteed Party of its obligations under the
Guaranteed Agreements, it being understood that this
proviso shall not create any right of offset with respect
to any such claim.
3. Waiver. Mafco hereby waives promptness,
diligence, all set-offs, counterclaims, presentments,
protests and notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations and
with respect to this Agreement and any requirement of the
Guarantied Parties or any other Indemnified Persons to
protect, secure, perfect or insure any security interest
or lien or any property subject hereto or exhaust any
right or take any action against the Obligors or any
other person or entity or any collateral. No single or
partial exercise of any right hereunder shall preclude
any other or further exercise thereof or the exercise of
any other right. To the fullest extent permitted by law,
Mafco waives all principles or provisions of law
(statutory or otherwise), regulation or order now or
hereafter in effect in any jurisdiction which are or
might be in conflict with the terms of this Agreement or
affecting any rights of any of the Guaranteed Parties or
any other Indemnified Person hereunder and any legal or
equitable discharge of Mafco's obligations hereunder and
the benefit of any statute of limitations affecting its
liability hereunder or the enforcement hereof. Mafco
will receive substantial direct and indirect benefits
from the arrangements contemplated by this Agreement and
the 0Guaranteed Agreements, and the waivers set forth in
this Agreement are knowingly made in contemplation of
such benefits. The remedies herein provided are
cumulative and not exclusive of any remedies provided by
law.
4. Subrogation Waiver. Mafco agrees that it
shall not have any rights (direct or indirect) of
subrogation, contribution, reimbursement,
indemnification, or other rights of payment or recovery
from the Obligors for any payments made or obligations
performed by Mafco hereunder, under any other agreement
or otherwise, and Mafco hereby irrevocably waives and
releases, absolutely and unconditionally, any such rights
of subrogation, contribution, reimbursement,
indemnification and other rights of payment or recovery
which it may now have or hereafter acquire with respect
to any such payments made or obligations performed until
such payment or obligation owed to any Guaranteed Party
or any other Indemnified Person is irrevocably discharged
or defeased.
5. Reinstatement. The obligations of Mafco
under this Agreement shall continue to be effective or
shall be reinstated, as the case may be, if at any time
any payment or performance of any of the Guaranteed
Obligations is rescinded, annulled or must otherwise be
returned by the Obligors, upon the insolvency, bankruptcy
or reorganization of the Obligors or otherwise, all as
though such payment had not been made or performance had
not occurred, as applicable.
6. Representations and Warranties of Mafco.
Mafco represents and warrants as follows:
6.1 Organization and Qualifications.
Mafco is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware
and has the requisite power and authority and all
governmental permits, approvals and other authorizations
necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted,
except where the failure to be so incorporated, existing
or in good standing or to have such power, authority and
governmental permits, approvals and other authorizations
would not, individually or in the aggregate, have a
material adverse effect on the business, assets,
financial or other condition, or results of operations of
Mafco and its Subsidiaries, taken as a whole (a "Mafco
Material Adverse Effect"). For purposes of this
Agreement, a "Subsidiary" of any person means (A) a
corporation in which such person, a subsidiary of such
person, or such person and one or more subsidiaries of
such person, directly or indirectly, at the date of
determination, has either (i) a majority ownership
interest or (ii) the power, under ordinary circumstances,
to elect, or to direct the election of, a majority of the
board of directors of such corporation or (B) a
partnership in which such person, a subsidiary of such
person, or such person and one or more subsidiaries of
such person (i) is, at the date of determination, a
general partner of such partnership, or (ii) has a
majority ownership interest in such partnership or the
right to elect, or to direct the election of, a majority
of the governing body of such partnership, or (C) any
other person (other than a corporation or a partnership)
in which such person, a subsidiary of such person, or
such person and one or more subsidiaries of such person
has either (i) at least a majority ownership interest or
(ii) the power to elect, or to direct the election of, a
majority of the directors or other governing body of such
person, provided, the term "Subsidiary" shall not include
New World Communications Group Incorporated or any of its
Subsidiaries.
6.2 Authority Relative to This Agreement.
(a) Mafco has all necessary corporate power
and authority to execute and deliver this Agreement and
to perform its obligations hereunder.
(b) The execution and delivery of this
Agreement by Mafco and the performance by Mafco of its
obligations hereunder have been duly and validly
authorized by all necessary corporate action and no other
corporate proceedings on the part of Mafco are necessary
to authorize this Agreement or to perform its obligations
hereunder. This Agreement has been duly and validly
executed and delivered by Mafco and constitutes the
legal, valid and binding obligation of Mafco, enforceable
against Mafco in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors'
rights generally and by equitable principles to which the
remedies of specific performance and injunctive and
similar forms of relief are subject and except that
rights to indemnity under the Guaranteed Agreements may
be subject to Federal or state securities laws or the
policies underlying such laws.
6.3 No Conflict; Required Filings and
Consents.
(a) The execution and delivery of this
Agreement by Mafco do not, and the performance of its
obligations hereunder will not, (i) conflict with or
violate the certificate of incorporation or bylaws of
Mafco, (ii) subject to making the filings and obtaining
the approvals identified in Section 6.3(b), conflict with
or violate any law, rule, regulation, order, judgment or
decree applicable to Mafco, or by which any property or
asset of Mafco is bound or affected, or (iii) subject to
making the filings and obtaining the approvals identified
in Section 6.3(b) and to Section A.2 of the Seller
Disclosure Letter (as defined in the Stock Purchase
Agreement), conflict with or result in any breach of or
constitute a default (or an event which with notice or
lapse of time or both would become a default) under,
result in the loss or modification in a manner materially
adverse to Mafco of a material right or benefit under, or
give to others any right of termination, amendment,
acceleration, repurchase or repayment, increased payments
or cancellation of, or result in the creation of any
security interests, liens, claims, pledges, options,
rights of first refusal, agreements, limitations on
voting rights, charges and other encumbrances of any
nature whatsoever on any property or asset of Mafco
pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise,
or other instrument or obligation to which Mafco is a
party or by which Mafco or any property or asset of Mafco
is bound or affected, except, in the case of clauses (ii)
and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which would not prevent or
delay in any material respect performance by Mafco of its
obligations hereunder, or otherwise, individually or in
the aggregate, prevent Mafco from performing its
obligations under this Agreement in any material respect,
and would not, individually or in the aggregate, have a
Mafco Material Adverse Effect.
(b) The execution and delivery of this
Agreement by Mafco and the performance of its obligations
under this Agreement and the consummation of its
obligations will not require any consent, approval,
authorization or permit of, or filing with or
notification to, any federal, state or local governmental
or regulatory agency, authority, commission or
instrumentality, whether domestic or foreign, except (i)
for (A) the pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder, and
(B) the approval of the transactions contemplated by the
Guaranteed Agreements by the Federal Communications
Commission (the "FCC") under the Communications Act of
1934, as amended, and the rules and regulations of the
FCC promulgated thereunder, and (ii) where the failure to
obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would
not, individually or in the aggregate, prevent or delay
in any material respect consummation of its obligations
under this Agreement or otherwise prevent Mafco from
performing its obligations under this Agreement in any
material respect, and would not, individually or in the
aggregate, have a Mafco Material Adverse Effect.
6.4 Litigation. There are no claims, suits,
actions or proceedings pending or, to Mafco's knowledge,
threatened or contemplated, nor are there any
investigations or reviews by any federal, state or local
governmental or regulatory agency, authority or
commission or instrumentality pending or, to Mafco's
knowledge, threatened or contemplated, against, relating
to or affecting Mafco or any of its Subsidiaries, which
could reasonably be expected to have, individually or in
the aggregate, a Mafco Material Adverse Effect, or to
prohibit or materially restrict the performance of its
obligations hereunder, nor is there any judgment, decree,
order, injunction, writ or rule of any court,
governmental department, commission, agency,
instrumentality or authority or any arbitrator
outstanding against Mafco having, or which, insofar as
can be reasonably foreseen, in the future is likely to
have, any such Mafco Material Adverse Effect.
7. Miscellaneous.
7.1 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered by hand, mailed by registered
or certified mail (return receipt requested) or sent by
prepaid overnight courier (with proof of service) or
confirmed facsimile transmission to the parties as
follows (or at such other addresses for a party as shall
be specified by like notice) and shall be deemed given on
the date on which so hand-delivered, mailed, delivered or
sent by confirmed facsimile transmission:
To Mafco:
Mafco Holdings Inc.
35 East 62nd Street
New York, New York 10021
Facsimile: (212) 572-5056
Attn: Barry F. Schwartz
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, CA 90071
Facsimile: (213) 687-5600
Attn: Thomas C. Janson, Jr.
To a Guaranteed Party, at the address set forth in
the Guaranteed Agreement to which such notice relates,
with a copy (which shall not constitute notice) to the
notice parties for such Guaranteed Party set forth in
such agreement.
7.2 Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (OTHER THAN TO THE EXTENT REQUIRED
BY THE DELAWARE GENERAL CORPORATION LAW), WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. Mafco
and the Guaranteed Parties acknowledge that the
negotiation of this Agreement occurred in New York, New
York and irrevocably agree that any legal suit, action or
proceeding brought by a Guaranteed Party hereto arising
out of or based upon this Agreement or the transactions
contemplated hereby shall be instituted in any United
States Federal or New York State court in the Borough of
Manhattan, The City of New York, New York (the "Courts"),
waive any objection which it may now or hereafter have to
the laying of venue of any such proceedings, submit to
the exclusive jurisdiction of such Courts in any such
suit, action or proceeding and agree not to commence any
such suit, action or proceeding except in such Courts.
7.3 Expenses. All costs and expenses incurred
in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring
such expenses.
7.4 Headings. The headings contained in this
Agreement are for reference purposes and shall not affect
in any way the meaning or interpretation of this
Agreement.
7.5 Severability. Any term or provision of
this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or
unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement
is so broad as to be unenforceable, the provision shall
be interpreted to be only so broad as is enforceable.
7.6 Attorneys' Fees. If any action at law or
in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which
such party may be entitled.
7.7 Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the
benefit of Mafco, the Guaranteed Parties and any other
Indemnified Person and their respective estates, heirs,
successors and permitted assigns; provided, however, that
Mafco shall remain responsible for all of its obligations
under this Agreement notwithstanding any assignment,
delegation or other transfer any of its obligations
hereunder.
7.8 Entire Agreement. This Agreement
constitutes the entire agreement, supersedes all other
prior agreements and understandings, both written and
oral, among the parties with respect to the subject
matter hereof.
IN WITNESS WHEREOF, this Agreement has been
signed on behalf of Mafco as of the date first above
written.
MAFCO HOLDINGS INC.
By: /s/ Glenn P. Dickes
Glenn P. Dickes
Senior Vice President
