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 ▇▇▇▇▇▇▇▇▇, LLP
EXHIBIT B-2 Legal Opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
EXHIBIT C Legal Opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇
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 (▇▇▇ ▇▇▇ ▇▇▇
▇▇▇), ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & 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 ▇▇▇▇▇▇▇, Sachs & Co., CS
First Boston Corporation and ▇▇▇▇▇▇ ▇▇▇▇, 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 ▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (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 ▇▇▇▇▇▇▇ 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 & ▇▇▇▇▇▇▇▇▇, LLP,
and ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, 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,
▇▇▇▇▇▇▇ & ▇▇▇▇, 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, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
To News Corp.:
The News Corporation Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
To Fox or Merger Sub:
Fox Television Stations, Inc
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Building 88, Room 142
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy (which shall not constitute notice) to:
Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
THE NEWS CORPORATION LIMITED
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Director
FOX TELEVISION STATIONS, INC.
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President
FOX ACQUISITION CO., INC.
By /s/ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Vice President
EXHIBIT A
FORM OF AFFILIATE LETTER
[Date]
The News Corporation Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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 & ▇▇▇▇▇▇▇▇▇, 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
▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇,***
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, ▇▇▇▇▇▇▇ & ▇▇▇▇
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]