EXHIBIT 10.31
FORM OF TAX SHARING AGREEMENT
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THIS AGREEMENT is entered into as of the ____ day of ______, 1998, by and among
the following corporations:
News Publishing Australia Limited, a Delaware corporation ("NPAL");
Fox Entertainment Group, Inc., a Delaware corporation ("Entertainment");
Fox Television Holdings, Inc., a Delaware Corporation ("Television") ;
the Subsidiaries of Entertainment (the "Entertainment Subsidiaries");
the Subsidiaries of NPAL (other than Entertainment, the Entertainment
Subsidiaries the Television Subsidiaries) (the "NPAL Subsidiaries"); and
the Subsidiaries of Television (the "Television Subsidiaries").
WITNESSETH:
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WHEREAS, NPAL, Entertainment, the Entertainment Subsidiaries and the NPAL
Subsidiaries (hereinafter sometimes referred to as "Members"; or in the singular
"Member") are part of an "Affiliated Group" as such term is defined by Section
1504(a) of the Internal Revenue Code of 1986, as amended or any successor
thereto (the "Code"));
WHEREAS, such Affiliated Group (as it then existed) has elected to file
consolidated United States federal income Tax Returns for the past several
taxable years in accordance with Section 1501 of the Code; and
WHEREAS, NPAL is the Common Parent (as such term is defined in Section
1504(a) of the Code) for the Affiliated Group which includes NPAL,
Entertainment, the NPAL Subsidiaries and the Entertainment Subsidiaries; and
WHEREAS, the Parties desire to agree upon a method for (i) sharing of
consolidated, combined or unitary liabilities in respect of federal, state
and/or local income taxes; (ii) compensating any Member for utilization of its
net operating losses, tax credits and other tax benefits in arriving at the
Affiliated Group tax liability as determined under the United States federal
consolidated return regulations; (iii) providing for the receipt of any refund
arising from net operating losses or tax credits from subsequent taxable years
and for payments upon subsequent adjustments; and (iv) for certain other related
matters, as set forth herein.
NOW, THEREFORE, in consideration of the promises and mutual undertakings
contained herein, the Parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms will have the following
meanings (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):
"CODE" shall have the meaning set forth in the preamble to this Agreement
and shall refer to the Code as in effect for the taxable period in question.
"CONSOLIDATED GROUP" means the Affiliated Group (as defined in Section
1504(a) of the Code) of corporations of which NPAL is the common parent.
"CONSOLIDATED GROUP RETURN" means the consolidated United States federal
income Tax Returns for the Consolidated Group.
"DIRECTOR OF TAXES" means the person is appointed by NPAL to administer and
effectuate this Agreement.
"EFFECTIVE DATE" means the date set forth as the effective date of this
Agreement in Section 2.1 hereof.
"ENTERTAINMENT" shall have the meaning set forth in the preamble to this
Agreement.
"ENTERTAINMENT SUBSIDIARIES" shall have the meaning in the preamble to this
Agreement.
"FINAL DETERMINATION" means the final resolution of liability for any
United States Federal, state or local Tax for any taxable period, including any
related interest or penalties, by or as a result of: (i) a final and
unappealable decision, judgment, decree or other order of a court of competent
jurisdiction; (ii) a closing agreement or accepted offer in compromise under
Sections 7121 or 7122 of the Code, or comparable agreement under the laws of
other jurisdictions, which resolves the entire liability for any Tax for any
taxable period; (iii) any allowance of a refund or credit in respect of an
overpayment of Tax, but only after the expiration of all periods during which
such refund may be recovered (including by way of offset) by the jurisdiction
imposing the Tax; or (iv) any other final disposition as determined by the
Director of Taxes, including by reason of the expiration of the applicable
statute of limitations.
"IRS" means the United States Internal Revenue Service.
"IRS OVERPAYMENT RATE" shall have the meaning set forth in Section 3.5 of
this Agreement.
"IRS UNDERPAYMENT RATE" shall have the meaning set forth in Section 3.5 of
this Agreement.
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"MEMBER" shall have the meaning set forth in the preamble to this
Agreement.
"NET REVERSAL BENEFIT" shall have the meaning set forth in Section 3.3(a)
of this Agreement.
"NPAL" shall have the meaning set forth in the preamble to this Agreement
"PARTIES" shall have the meaning set forth in Section 5.11 of this
Agreement.
"REALIZED BENEFIT" means a reduction of liability in respect of any Tax
resulting from the use of an item of loss, deduction or credit in accordance
with the ordering rules prescribed by the Code and the Regulations promulgated
thereunder.
"REGULATIONS" means the proposed, temporary or final regulations issued by
the Treasury Department under the Code as in effect for the taxable period in
question.
"SEPARATE RETURN TENTATIVE MINIMUM TAX LIABILITY" will mean the alternative
minimum tax liability of a Member of a Consolidated Group determined as if such
Member were filing a separate income Tax Return under the Code with adjustments
consistent with those used in computing Separate Return Regular Tax Liability as
defined below.
"SEPARATE RETURN REGULAR TAX LIABILITY" will mean the tax liability of a
Member of a Consolidated Group determined in accordance with Regulation Section
1.1552-l(a)(2)(ii) as if such Member were filing a separate income Tax Return
under the Code and the term shall not have the same meaning as set forth in
Regulations Section 1.1502-12. For purposes of determining the "Separate Return
Tax Liability" of a Member, the following principles apply:
(a) Limitations on the calculation of a deduction or the utilization of
tax credits or the calculation of a tax liability will be made on a
Consolidated Group basis. Accordingly, the limitations provided in Code
Sections 38, 56, 170, 172, and similar limitations will be applied on a
Consolidated Group basis.
(b) Elections as to tax credits and tax computations, which may have been
different from the consolidated treatment if separate returns were filed,
will follow and be consistent with those elections made on an annual basis
by the parent of the Consolidated Group for the Consolidated Group Return.
(c) Any dividends received by one Member from another Member will be
assumed to qualify for the 100 percent dividends received deduction of Code
Section 243, or shall be eliminated from such calculation in accordance
with Section 1.1502-13(f) of the Regulations.
(d) Gain or loss on intercompany transactions shall be treated by each
Member in the manner required by Section 1.1502-13 of the Regulations.
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(e) Deductions attributable to the grant or exercise of options granted to
employees, independent contractors or other similar persons of
Entertainment, Television or the Entertainment Subsidiaries or the
Television Subsidiaries with respect to shares of The News Corporation
Limited shall be disregarded by Entertainment, Television, the
Entertainment Subsidiaries and the Television Subsidiaries in determining
"Separate Return Regular Tax Liability".
(f) Net operating loss carryforwards and carrybacks and other tax benefit
items of the relevant Member shall be disregarded in determining such
Member's Separate Return Regular Tax Liability, unless the Member's
carryforwards, carrybacks and other tax benefit items are actually availed
of in reducing the consolidated federal income tax liability of the NPAL
Group for the relevant tax period.
"SUBSIDIARY" means any corporation, whether de jure or de facto, in which
NPAL, Television or Entertainment directly or indirectly owns more than 50% of
the equity having the power to vote on or direct the affairs of the entity.
"TAX" or "TAXES" means any and all United States Federal, state or local
taxes (i) based upon or measured in whole or in part by net income, together
with interest, penalties and other additions thereto, imposed by the relevant
Taxing Authority, and (ii) any gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding, payroll,
employment, social security, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees, assessments or
charges of any kind whatsoever, together with interest, penalties and other
additions thereto, imposed by the relevant Taxing Authority.
"TAXING AUTHORITY" means the Internal Revenue Service or any other United
States federal, state, or local governmental authority responsible for the
administration of any Tax.
"TAX ITEM" shall have the meaning set forth in Section 3.3(a) of this
Agreement.
"TAX RETURN" means any return, filing, questionnaire or other document
required to be filed, including requests for extensions of time, filings made
with estimated Tax payments, claims for refund and amended returns that may be
filed, for any taxable period with any Taxing Authority in connection with any
Tax or Taxes (whether or not a payment is required to be made with respect to
such filing).
"TELEVISION" shall have the meaning set forth in the preamble of this
Agreement.
ARTICLE II
PREPARATION AND FILING OF TAX RETURNS
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SECTION 2.1. APPLICABILITY OF PROVISIONS OF AGREEMENT. This Agreement is
effective as of ___________, 1998 (the "Effective Date") for NPAL, the NPAL
Subsidiaries, Entertainment, the Entertainment Subsidiaries, Television and the
Television Subsidiaries.
SECTION 2.2. TAX RETURN PREPARATION. The Director of Taxes will cause to
be prepared and filed all Tax Returns, which include both (i) NPAL or any of the
NPAL Subsidiaries and (ii) any of Entertainment, Television, the Entertainment
Subsidiaries or the Television Subsidiaries. The Director of Taxes will be
responsible for the preparation and filing of any consents and requests for
extension of time within which to file any such Tax Return or any related
information. The Director of Taxes will have full responsibility and discretion
for the final reporting positions, elections and disclosures taken in all such
Tax Returns including Tax controversies relating to such Tax Returns as
described in Section 4.2.
SECTION 2.3. CONSOLIDATED GROUP TAX RETURN. Each of the Members will
join in the filing annually of the Consolidated Group Return to the extent each
is eligible to join in such return under the provisions of the Code and the
regulations promulgated thereunder.
SECTION 2.4. DOCUMENTATION. Each Party will furnish to the Director of
Taxes on a timely basis such information, schedules, analyses and any other
items as may be necessary to prepare and file any Tax Returns. The Subsidiaries
that are members of the Consolidated Group will execute and deliver all
documentation reasonably required (including powers of attorney, if requested)
to enable the Director of Taxes to file, and to take all actions necessary or
incidental to the filing of, the Consolidated Group Return (including, without
limitation, the execution of Treasury Form 1122) or any amendment of the
Consolidated Group Return.
ARTICLE III
ALLOCATION AND PAYMENT OF TAXES ARISING FROM
CONSOLIDATED GROUP TAX RETURNS
SECTION 3.1. ACKNOWLEDGMENT OF ELECTION TO ALLOCATE TAX LIABILITY. The
elections made in previously filed Tax Returns will continue to govern the
allocation of the Consolidated Group's Federal regular income tax liability
between each member of the Consolidated Group. Pursuant to such elections, the
Consolidated Group's Federal regular income tax liability will be allocated in
the following manner:
(a) Tax Charge. In accordance with the method set forth in Code
Section 1552 and Regulation Section 1.1552-l(a)(l), the consolidated
Federal regular income tax liability will be apportioned among the Members
in accordance with the ratio which that portion of the consolidated taxable
income attributable to each Member having taxable income bears to the sum
of the taxable incomes of all such Members. Each Member will pay the parent
of the Consolidated Group its allocated consolidated Federal tax liability
as determined hereunder and pursuant to the settlement provisions of
Section 3.7 of this Agreement;
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(b) Tax Benefit. An additional liability amount will be
allocated to each Member which, as a result of net operating losses, excess
charitable contributions, foreign tax credits, investment tax credits or
similar items arising from or generated by the activities of another Member
or Members in either a separate return year or a consolidated return year,
has an allocated tax liability determined under Section 3.1(a) above that
is smaller than its Separate Return Regular Tax Liability. Only net
operating losses and after tax benefits availed of in determining and
reducing the consolidated federal income tax liability of the Consolidated
Group will be considered for purposes of the preceding sentence. The
additional liability amount allocated to each Member will be equal to 100%
of the excess, if any, of (l) the Separate Return Regular Tax Liability of
such Member for the taxable year, over (2) the allocated tax liability
determined under Section 3.1(a) above. The total of any additional amounts
allocated to all such Members for the consolidated return year will be paid
(pursuant to the Settlement provisions of Section 3.7 of this Agreement) to
those other Members which generated such losses, credits or deductions to
which such total is attributable (hereinafter, referred to as "Loss
Members"). Such payments to Loss Members will be made pursuant to a
consistent method which reasonably reflects such items (such consistency
and reasonableness to be determined by the Director of Taxes) and which is
substantiated by specific records maintained by the Consolidated Group for
such purposes.
SECTION 3.2. ALTERNATIVE MINIMUM TAX ("AMT"). The following rules apply to
the allocation of AMT liability and AMT credit to the Members of the
Consolidated Group.
(a) AMT Liability. The consolidated alternative minimum tax
liability will be allocated for any Consolidated Group Return year to each
Member whose Separate Return Tentative Minimum Tax Liability exceeds its
Separate Return Regular Tax Liability. The total alternative minimum tax
liability shown on the Consolidated Group Return will be apportioned to
each Member according to the ratio of (i) the excess of its Separate Return
Tentative Minimum Tax Liability over its Separate Return Regular Tax
Liability to (ii) the total of all such Members' excess Separate Return
Tentative Minimum Tax Liability over Separate Return Regular Tax Liability.
For purposes of this allocation, if a Member has a regular tax net
operating loss for the current period on a separate return basis, the
Separate Return Tentative Minimum Tax Liability for that Member will be
computed on the difference between such Member's regular tax net operating
loss and any smaller alternative tax net operating loss or any alternative
minimum taxable income.
(b) AMT Credit. Any alternative minimum tax credit realized in
subsequent years (determined on a first in first out basis) by the
Consolidated Group as a result of incurring the alternative minimum tax
liability will be allocated to the Members to which the original
alternative minimum tax liability was allocated in proportion to such
original allocation. If less than the full minimum tax credit is realized
in a year, the amount of such minimum tax credit will be allocated to each
Member that incurred the original alternative minimum tax liability in the
manner determined by the Director of Taxes.
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However, in no case will any Member be allocated an amount of AMT Credit in
excess of its allocated original alternative minimum tax liability.
SECTION 3.3. CARRYBACKS OF LOSSES AND CREDITS.
(a) Benefits for Tax Items. In allocating the Consolidated
Group's Federal tax liability, each Member will be entitled to the tax
benefit that results from any of its net operating losses, net capital
losses, deductions or credits (each, a "Tax Item") that are carried back to
a prior period Consolidated Return. If the carryback of a Tax Item results
in a carryforward or carryback of a Tax Item into a taxable year of the
Consolidated Group and such carryforward or carryback produces a Realized
Benefit, or other use, in such year or any subsequent year after
considering all other items of taxable income or credits otherwise
available to such other Members (a "Net Reversal Benefit"), then an amount
equal to such Net Reversal Benefit, when realized, will be an additional
liability for such year to be allocated to such other Members of the
Consolidated Group pursuant to Section 3.1(b) of this Agreement. The
benefit of any carryback of a Tax Item to any prior period Consolidated
Return will be taken into account only when and to the extent that such
carryback reduces the tax liability in a prior period Consolidated Group
Return or that any resultant Net Reversal Benefit is realized. The Member
generating, or otherwise bearing the cost of, such Tax Item that has been
carried back will be paid pursuant to the Settlement provisions of Section
3.7 of this Agreement.
(b) AMT. To the extent that additional AMT arises in a prior
period Consolidated Return from a carryback of a Tax Item, then such AMT
will be allocated to the Member giving rise to such carryback and such
Member will be entitled to recover any Net Reversal Benefit resulting from
any AMT credit carryforwards associated with such AMT.
(c) Multiple Carrybacks of Tax Items. In the event that two or
more Tax Items are carried back to any prior period Consolidated Return,
their order of use will be determined by the Code and the regulations
promulgated thereunder as determined by the Director of Taxes.
SECTION 3.4. SUBSEQUENT ADJUSTMENTS. If the consolidated Federal income tax
liability is adjusted for any taxable period, whether by means of an amended
return, claim for refund, assessment arising from an Internal Revenue Service
audit examination, or at the conclusion of any appeal or litigation or to
reflect the results of any Final Determination, the liability of each Member
will be recomputed under Sections 3.1 and 3.2 of this Agreement to give effect
to such adjustments. The parent of the Consolidated Group will make payment to
each Member for any reduction in its share of the consolidated Federal income
tax liability, and in the case of an increase in tax liability, each Member will
pay the parent of the Consolidated Group its allocable share of such increased
consolidated Federal income tax liability, in each case together with any
interest or penalties relating thereto as provided in Sections 3.5 and 3.6 of
this Agreement. Any payments required under this Section 3.5 will be made in
accordance with the provisions of Section 3.7 of this Agreement.
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SECTION 3.5. INTEREST. For purposes of this Agreement, unless specifically
provided otherwise, interest will be computed at the Federal statutory rate
used, pursuant to Code Section 6621, in computing the interest payable to the
IRS (the "IRS Underpayment Rate") or by the IRS (the "IRS Overpayment Rate") on
the net balance due to or from the IRS. Interest determinations and
allocations for Members will be made by the Director of Taxes at such time as
the IRS finally determines interest owed for the tax period of the Consolidated
Group Return.
SECTION 3.6. PENALTIES. Any penalty will be allocated to such Members and
upon such basis as the Director of Taxes deems just and proper in view of all
applicable circumstances. It is the general intent of this Agreement that any
penalty incurred by the Consolidated Group will be paid by the Member or Members
whose actions or inactions, income, deductions, credits or allowances caused
such penalty.
SECTION 3.7. SETTLEMENTS. Notwithstanding any section of this Agreement, no
payments under this Article III shall be required among Entertainment,
Television, the Entertainment Subsidiaries and the Television Subsidiaries and
no payments under this Article III shall be required among NPAL and the NPAL
Subsidiaries. For purposes of this Agreement, all payments due or from
Entertainment, Television, the Entertainment Subsidiaries or the Television
Subsidiaries shall be netted, aggregated and paid to or by Entertainment.
Similarly, all payments due or from any of NPAL or the NPAL Subsidiaries shall
be netted, aggregated and paid to or by NPAL.
(a) Estimated Taxes. With respect to each quarterly estimated
tax payment, the Director of Taxes will notify Members of their assessed
share of estimated tax payments to be made on the projected consolidated
Federal income tax liability for the tax year. Payment to the common parent
of the Consolidated Group will be made 24 hours in advance of the payment
to the Internal Revenue Service. Such Member will receive credit for such
estimated payments against its share of the apportioned consolidated
Federal income tax liability as determined under this Article III. Any
payment not made within the prescribed time period thereafter will bear
interest at the IRS Underpayment Rate.
(b) Tax Returns. A determination of a Member's apportioned
consolidated Federal income tax liability under Sections 3.1 or 3.2 hereof
will be made by the Director of Taxes. Payments resulting from such
determination of tax liability, adjusted to reflect any payments previously
made pursuant to Section 3.7(a) hereof, will be made by or to the common
parent of the Consolidated Group to or by a Member 24 hours prior to the
due date of such tax return without regard to any filing extensions. If the
tax return filing is extended, an additional computation of a Member's tax
liability will be made when the Consolidated Group Return is filed and
adjustments that require additional payments will be paid by a Member
within 24 hours of having received written notice of assessment for such
liability from the Director of Taxes. Any payment not made within the
prescribed time period thereafter will bear interest at the IRS
Underpayment Rate.
(c) Intentionally deleted.
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(d) Subsequent Adjustments. Any payment required to be made
pursuant to Section 3.4 hereof with respect to any tax return will be made
by the Member obligated to make such payment (i) in the case of a refund of
tax, within 24 hours after receipt (whether by way of payment, credit, or
offset against any payments due or otherwise) of such refund or (ii) in the
case of the payment of tax with respect to any such tax return, within 24
hours of the delivery of written notice of assessment for such liability
from the Director of Taxes. Any payment described in clause (i) and any
demand for payment described in clause (ii) will be accompanied by a
calculation setting forth the basis for the amount paid or demanded. Any
payment not made within the prescribed time period thereafter will bear
interest at the IRS Underpayment Rate.
(e) Tax Payments and IRS Refunds. Notwithstanding the foregoing
provisions of this Section 3.7, when any tax payment is due to any Member
from the parent of the Consolidated Group and a refund is due from the IRS,
the parent of the Consolidated Group may defer settlement with such Member
and make the required settlement payment within 24 hours of the receipt of
such refund.
(f) Manner of Settlement. All settlements required under this
Agreement will be in U.S. dollars. Any settlement with the IRS or other Tax
authorities for any matter falling within the scope of this Agreement is
the responsibility of and will be determined by the Director of Taxes.
SECTION 3.8. CONFIDENTIALITY OF RECORDS. The Parties agree that, except as
otherwise expressly agreed in writing, any information furnished to the other
Party pursuant to this Agreement is confidential. Except to the extent required
for the proper filing of returns or resolving a dispute, audit, or litigation,
the Parties covenant not to disclose, and not to permit disclosure of, such
information to persons other than their own auditors or tax advisors.
ARTICLE IV
COOPERATION; TAX CONTROVERSIES
SECTION 4.1. COOPERATION.
(a) Administrative Compliance. NPAL and each of the other
Parties to this Agreement will cooperate fully and to the extent reasonably
requested by each other in connection with the preparation and filing of
any Tax Return or the conduct of any audit, dispute, proceeding, suit or
action concerning any issues or any other matter contemplated hereunder.
Such cooperation will include, without limitation: (i) the retention and
provision of books, records, documentation or other information relating to
any Tax matter until the later of either (I) the expiration of the
applicable statute of limitations (giving effect to any extension, waiver,
or mitigation thereof) or (II) in the event any claim has been made under
this Agreement for which such information is relevant, until a Final
Determination with
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respect to such claim; (ii) the provision of additional information with
respect to material provided under clause (i) of this Section 4.1; (iii)
the execution of any document that may be necessary or reasonably helpful
in connection with the filing of any Tax Return by any Member of a
Consolidated Group, or in connection with any audit, proceeding, suit or
action addressed in the preceding sentence; and (iv) the use of the Party's
best efforts to obtain any documentation from a governmental authority or a
third party that may be necessary or helpful in connection with the
foregoing. Each of Entertainment, Television, the Entertainment
Subsidiaries and the Television Subsidiaries will make its employees and
facilities available on a mutually convenient basis to facilitate such
cooperation and will retain as permanent records all documentation
necessary to enable it to determine any obligation under this Agreement.
The records described above will be made available to the Director of Taxes
within a reasonable time upon request and may be photocopied on an as
needed basis.
(b) Providing Advice and Notice. NPAL and each Party will use
reasonable efforts to keep each other advised as to the status of Tax
audits and litigation involving any issue which relates to any Tax of the
Consolidated Group or could give rise to the liability of the Consolidated
Group under this Agreement ( a "Liability Issue"). The Parties will each
promptly notify the other of any inquiries by any Taxing Authority or any
other administrative, judicial or other governmental authority that relate
to any material amount of Tax that may be imposed on the other or any
Subsidiary of the other that might arise under this Agreement including
with such notice a copy of the revenue agent's report or similar report,
notice of proposed adjustment, or notice of deficiency received by it
relating to any Liability Issue or any adjustment referred to in Section
4.1(c) hereof.
All notices and other communications under this Agreement shall
be in writing and shall be deemed given when delivered personally, mailed
by registered mail, return receipt requested, sent by recognized overnight
delivery service or, to the extent receipt is confirmed, by telecopy,
telefax, or other electronic transmission service to the Parties at the
following addresses (or to such other address as a Party may have specified
by notice given to the other Parties pursuant to this provision):
If to NPAL or the NPAL Subsidiaries:
News Publishing Australia Limited
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
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With a copy to:
News Publishing Australia Limited
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
If to Entertainment, or the Entertainment Subsidiaries to:
Fox Entertainment Group, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
With a copy to:
Fox Entertainment Group, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
(c) Consulting on Proposed Tax Adjustments. The Director of Taxes will
advise and consult with each Member with respect to any proposed Tax
adjustments that are the subject of an IRS audit or investigation or are
the subject of litigation, which may affect any Tax attribute of such
Member.
SECTION 4.2. TAX CONTROVERSIES. Subject to the cooperation provisions of
Section 4.1, the Director of Taxes will have full responsibility and discretion
in the handling of and concluding settlements for any Tax controversy,
including, without limitation, an audit, a protest to the Appeals Division of
the IRS, and litigation in Tax Court or any other court or any matter relating
to a Final Determination, involving a Tax Return of the Consolidated Group.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. STATE OR LOCAL TAXES. When two or more entities including both
(i) NPAL or any of the NPAL Subsidiaries and (ii) any of Entertainment,
Television, the Entertainment Subsidiaries or the Television Subsidiaries file
combined, consolidated or unitary state or local Tax Returns in one or more
jurisdictions, the general principles of this Agreement pertaining to, but not
limited to, the Director of Taxes' responsibility and discretion for final
reporting positions, elections and disclosures in such returns, the allocation
of tax charges and benefits, the authority over and the manner in dealing with
adjustments subsequent to filing of any Tax Returns and any settlements of
amounts due, will govern such combined, consolidated or unitary state or local
income Tax Returns
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with equal force and effect. The decision to file on a combined, consolidated or
unitary basis in any jurisdiction will be made by the Director of Taxes,
provided however, that to the extent third Party consents are required no such
combined, consolidated or unitary filing shall be made until such consents are
provided.
SECTION 5.2. TERMINATION. In the event any Party ceases to be a Member of
the Consolidated Group or ceases to be included in any combined, consolidated or
unitary group filing state or local Tax Returns which includes NPAL or any of
the NPAL subsidiaries for any reason whatsoever, this Agreement will be
terminated as to such Party, except that the obligations of all the Parties will
remain in full force and effect with respect to: (a) any period of time during
the taxable year in which the termination occurs for which the income of the
terminating Member was included in the Consolidated Group Return, (b) for any
Consolidated Group Return tax year in which a Member was an includible
corporation and for which an adjustment has been made as described in Section
3.4 of this Agreement and (c) similar state and local tax matters, if relevant,
under Section 5.1
SECTION 5.3. DISPUTE RESOLUTION. Any disagreements between the Director of
Taxes and any Party to this Agreement as to the meaning, interpretation,
application or enforceability of any provision of this Agreement will be
reviewed by NPAL's Chief Financial Officer. If any disagreement remains after
any such review, that disagreement will be resolved by the Audit Committees of
the relevant Parties.
SECTION 5.4. SUCCESSORS AND ASSIGNS. A Party's rights and obligations under
this Agreement may not be assigned without the prior written consent of the
other Parties to this Agreement. This Agreement will be binding upon and inure
to the benefit of each Party hereto and their respective successors and
permitted assigns.
SECTION 5.5. COMPLETE AGREEMENT. This Agreement contains the entire
understanding of the Parties hereto with respect to the subject matter contained
herein and supersedes all prior agreements of the Parties in connection with
such subject matter. No alteration, amendment or modification of any of the
terms of this Agreement will be valid unless made by an instrument signed in
writing by an authorized officer of each Party hereto.
SECTION 5.6. NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the Parties to this Agreement and should not be deemed to confer upon
third parties any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without this Agreement.
SECTION 5.7. LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to that jurisdiction,
be ineffective to the extent of the prohibition or unenforceability without
invalidating the remaining provisions. Any prohibition or unenforceability of
any provision of this Agreement in any jurisdiction will not invalidate or
render unenforceable the provision in any other jurisdiction.
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SECTION 5.8. EXPENSES. Unless otherwise expressly provided in this
Agreement each Party will bear any and all expenses that arise from its
respective obligations under this Agreement. In the event any Party to this
Agreement brings an action or proceeding for the breach or enforcement of this
Agreement, the prevailing Party in such action or proceeding, whether or not
such action or proceeding proceeds to final judgment, will be entitled to
recover as an element of its costs, and not as damages, such reasonable
attorneys' fees as may be awarded in the action or proceeding in addition to
whatever other relief to which the prevailing Party may be entitled.
SECTION 5.9. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5.10. COUNTERPARTS. This Agreement may be executed in several
identical counterparts each of which will be deemed an original instrument, but
all of such counterparts will constitute but one and the same agreement.
SECTION 5.11. PARTIES. NPAL, Entertainment, Television, the Entertainment
Subsidiaries, the NPAL subsidiaries and the Television Subsidiaries (herein
sometimes referred to collectively as the "Parties") hereto specifically
recognize that from time to time other companies may become Members or
affiliates of NPAL and hereby agree that such new Members or affiliates shall
become Parties to this Agreement by executing the master copy of this Agreement
which shall be maintained at NPAL's headquarters. It will not be necessary for
all the other Parties to again sign the Agreement but the new Party may simply
sign the existing Agreement and it will be effective as if the old Parties had
signed again.
SECTION 5.12. MODIFICATIONS. Any alteration, modification, addition,
deletion, or other change in the consolidated income tax return provisions of
the Code as in effect on the Effective Date or regulations shall automatically
be applicable to this Agreement mutatis mutandis.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed, all as of the effective date first above set forth.
In Witness Whereof; the Parties hereto have caused their names to be
subscribed and executed by their respective authorized officers on the dates
indicated, effective as of the date first written above.
[Dated] News Publishing Australia Limited
on its own behalf and on behalf of
the NPAL Subsidiaries
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By: ______________________________________
Fox Entertainment Group, Inc.
on its own behalf and on behalf
of the Entertainment Subsidiaries
By: ______________________________________
Fox Television Holdings, Inc.
on its own behalf and on
behalf of the Television Subsidiaries
By: _____________________________________
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