Document:

[EXECUTION COPY]  

Exhibit 10(ff)  

$1,700,000,000  

 364-DAY CREDIT AGREEMENT  

among  

 VIACOM INC.,  

 VIACOM INTERNATIONAL INC.,  

 THE SUBSIDIARY BORROWERS PARTIES HERETO,  

 THE LENDERS NAMED HEREIN,  

 JP MORGAN CHASE BANK,

as Administrative Agent,  

 SALOMON SMITH BARNEY INC.,

as Syndication Agent, and  

 BANK OF AMERICA, N.A., DEUTSCHE BANK SECURITIES, INC., and

THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH,

as Co-Documentation Agents  

 Dated as of February 28, 2003  

 JPMORGAN SECURITIES INC.  

 and  

 SALOMON SMITH BARNEY INC.,

as Joint Lead Arrangers  

 JPMORGAN SECURITIES INC.,

as Sole Bookrunner  

 
 TABLE OF CONTENTS  

	 
	 	 
	 	 
	 	Page

	ARTICLE I    DEFINITIONS	 	1
	 	 	SECTION 1.1.	 	Defined Terms	 	1
	 	 	SECTION 1.2.	 	Terms Generally	 	11
	

ARTICLE II    THE CREDITS	
 	

13
	 	 	SECTION 2.1.	 	Commitments	 	13
	 	 	SECTION 2.2.	 	Loans	 	13
	 	 	SECTION 2.3.	 	Revolving Credit Borrowing Procedure	 	13
	 	 	SECTION 2.4.	 	Repayment of Loans	 	13
	 	 	SECTION 2.5.	 	Conversion and Continuation Options	 	13
	 	 	SECTION 2.6.	 	Fees	 	14
	 	 	SECTION 2.7.	 	Interest on Loans; Eurodollar Tranches; Etc	 	14
	 	 	SECTION 2.8.	 	Default Interest	 	15
	 	 	SECTION 2.9.	 	Alternate Rate of Interest	 	15
	 	 	SECTION 2.10.	 	Termination, Reduction and Increase of Commitments	 	16
	 	 	SECTION 2.11.	 	Optional Prepayments of Loans	 	17
	 	 	SECTION 2.12.	 	Reserve Requirements; Change in Circumstances	 	17
	 	 	SECTION 2.13.	 	Indemnity	 	18
	 	 	SECTION 2.14.	 	Pro Rata Treatment; Funding Matters; Evidence of Debt	 	19
	 	 	SECTION 2.15.	 	Sharing of Setoffs	 	20
	 	 	SECTION 2.16.	 	Payments	 	20
	 	 	SECTION 2.17.	 	Taxes	 	21
	 	 	SECTION 2.18.	 	Termination or Assignment of Commitments Under Certain Circumstances	 	23
	

ARTICLE III    REPRESENTATIONS AND WARRANTIES	
 	

23
	 	 	SECTION 3.1.	 	Corporate Existence	 	23
	 	 	SECTION 3.2.	 	Financial Condition	 	24
	 	 	SECTION 3.3.	 	Litigation	 	24
	 	 	SECTION 3.4.	 	No Breach, etc.	 	24
	 	 	SECTION 3.5.	 	Corporate Action	 	24
	 	 	SECTION 3.6.	 	Approvals	 	24
	 	 	SECTION 3.7.	 	ERISA	 	24
	 	 	SECTION 3.8.	 	Taxes	 	25
	 	 	SECTION 3.9.	 	Investment Company Act	 	25
	 	 	SECTION 3.10.	 	Environmental	 	25
	 	 	SECTION 3.11.	 	Material Subsidiaries	 	25
	

ARTICLE IV    CONDITIONS OF EFFECTIVENESS AND LENDING	
 	

25
	 	 	SECTION 4.1.	 	Effectiveness	 	25
	 	 	SECTION 4.2.	 	Initial Loans to Subsidiary Borrowers	 	25
	 	 	SECTION 4.3.	 	All Credit Events	 	26

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ARTICLE V    COVENANTS	
 	

26
	 	 	SECTION 5.1.	 	Financial Statements	 	26
	 	 	SECTION 5.2.	 	Corporate Existence, Etc.	 	28
	 	 	SECTION 5.3.	 	Insurance	 	29
	 	 	SECTION 5.4.	 	Prohibition of Fundamental Changes	 	29
	 	 	SECTION 5.5.	 	Limitation on Liens	 	30
	 	 	SECTION 5.6.	 	Limitation on Subsidiary Indebtedness	 	30
	 	 	SECTION 5.7.	 	Consolidated Coverage Ratio	 	31
	 	 	SECTION 5.8.	 	Use of Proceeds	 	31
	 	 	SECTION 5.9.	 	Transactions with Affiliates	 	31
	

ARTICLE VI    EVENTS OF DEFAULT	
 	

32
	

ARTICLE VII    THE AGENTS	
 	

33
	

ARTICLE VIII    GUARANTEES	
 	

35
	 	 	SECTION 8.1.	 	Viacom Guarantee	 	35
	 	 	SECTION 8.2.	 	Viacom International Guarantee	 	37
	

ARTICLE IX    MISCELLANEOUS	
 	

40
	 	 	SECTION 9.1.	 	Notices	 	40
	 	 	SECTION 9.2.	 	Survival of Agreement	 	40
	 	 	SECTION 9.3.	 	Binding Effect	 	40
	 	 	SECTION 9.4.	 	Successors and Assigns	 	40
	 	 	SECTION 9.5.	 	Expenses; Indemnity	 	43
	 	 	SECTION 9.6.	 	Right of Setoff	 	44
	 	 	SECTION 9.7.	 	APPLICABLE LAW	 	44
	 	 	SECTION 9.8.	 	Waivers; Amendment	 	44
	 	 	SECTION 9.9.	 	Entire Agreement	 	45
	 	 	SECTION 9.10.	 	Waiver of Jury Trial	 	45
	 	 	SECTION 9.11.	 	Severability	 	45
	 	 	SECTION 9.12.	 	Counterparts	 	45
	 	 	SECTION 9.13.	 	Headings	 	45
	 	 	SECTION 9.14.	 	Jurisdiction; Consent to Service of Process	 	45
	 	 	SECTION 9.15.	 	Confidentiality	 	46
	 	 	SECTION 9.16.	 	Waiver of Notice of Termination Period	 	47
	 	 	SECTION 9.17.	 	Consent to Amendments to Five-Year Credit Agreement and Amended and Restated Infinity Credit Agreement	 	47

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ANNEXES	
 	

 
	Annex I	 	Pricing Grid	 	 
	

EXHIBITS	
 	

 	
 	

 
	Exhibit A	 	Administrative Questionnaire	 	 
	Exhibit B-1	 	Form of Revolving Credit Borrowing Request	 	 
	Exhibit B-2	 	Form of Subsidiary Borrower Designation	 	 
	Exhibit B-3	 	Form of Subsidiary Borrower Request	 	 
	Exhibit C	 	Form of Assignment and Acceptance	 	 
	Exhibit D	 	Form of Confidentiality Agreement	 	 
	Exhibit E	 	Form of Closing Certificate	 	 
	Exhibit F	 	Form of New Lender Supplement	 	 
	Exhibit G	 	Form of Commitment Increase Letter	 	 
	Exhibit H	 	Form of Amendment No. 2 to Five-Year Credit Agreement	 	 
	Exhibit I	 	Form of Amendment No. 1 to Amended and Restated Infinity Credit Agreement	 	 
	SCHEDULES	 	 	 	 
	Schedule 1.1	 	Commitments; Addresses for Notices	 	 
	Schedule 1.1(a)	 	Guarantees	 	 
	Schedule 5.6	 	Subsidiary Indebtedness	 	 
	Schedule VI(h)	 	Judgments	 	 

iv

364-DAY CREDIT AGREEMENT entered into as of February 28, 2003, among VIACOM INC., a Delaware corporation ("Viacom"), each
Subsidiary Borrower (as herein defined); VIACOM INTERNATIONAL INC., a Delaware corporation ("Viacom International"); the lenders whose names
appear on Schedule 1.1 hereto or who subsequently become parties hereto as provided herein (the "Lenders"); JPMORGAN CHASE BANK, a New York
banking corporation ("JPMorgan Chase"), as administrative agent for the Lenders; SALOMON SMITH BARNEY INC., a New York corporation, as
syndication agent for the Lenders (in such capacity, the "Syndication Agent"); and BANK OF AMERICA, N.A., DEUTSCHE BANK SECURITIES, INC. and THE
BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH, as co-documentation agents for the Lenders (in such capacity, the "Co-Documentation
Agents"). 

W I T N E S S E T H:  

WHEREAS, Viacom has requested that the Lenders provide extensions of credit to it and to certain Subsidiary Borrowers to be used for general corporate purposes (including,
without limitation, acquisitions and commercial paper backup), which extensions of credit shall enable the Borrowers (as herein defined) to borrow loans in an aggregate amount not to exceed
$1.7 billion (except as increased or reduced pursuant to Section 2.10) on a revolving credit basis on and after the Closing Date (as herein defined) and prior to the Revolving Credit
Maturity Date (as herein defined); and 

WHEREAS,
the Lenders are willing to extend credit to the Borrowers on the terms and subject to the conditions herein set forth; 

NOW,
THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto hereby agree as follows: 

ARTICLE I

DEFINITIONS  

SECTION
1.1.    Defined Terms.    As used in this Agreement, the following terms shall have the meanings specified below: 

"ABR Loan" shall mean any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of
Article II. 

"Administrative Agent" shall mean JPMorgan Chase, together with its affiliates, as an arranger of the Commitments and as the administrative agent for
the Lenders under this Agreement, and any successor thereto pursuant to Article VII. 

"Administrative Agent Fee Letter" shall mean the Fee Letter with respect to this Agreement between Viacom and the Administrative Agent, as amended,
supplemented or otherwise modified from time to time. 

"Administrative Agent's Fees" shall have the meaning assigned to such term in Section 2.6(b). 

"Administrative Questionnaire" shall mean an Administrative Questionnaire in the form of Exhibit A hereto. 

"Affiliate" shall mean, as to Viacom, any Person which directly or indirectly controls, is under common control with or is controlled by Viacom. As used
in this definition, "control" (including, with correlative meanings, "controlled by" and
"under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person which
owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, (a) no
individual shall be deemed to be an Affiliate of Viacom solely by 

 

reason of his or her being an officer, director or employee of Viacom or any of its Subsidiaries and (b) Viacom and Viacom International and their Subsidiaries shall not be deemed to be
Affiliates of each other, unless expressly stated to the contrary. 

"Agents" shall mean the collective reference to the Administrative Agent, the Co-Documentation Agents, the Joint Lead Arrangers, the Sole
Bookrunner and the Syndication Agent. 

"Agreement" shall mean this 364-Day Credit Agreement, as amended, supplemented or otherwise modified from time to time. 

"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum publicly announced from time to time by the Lender serving as the Administrative Agent as its
prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective on the date such change is publicly announced as effective; and
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. If
for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be the Prime Rate until the
circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. 

"Amended and Restated Infinity Credit Agreement" shall mean the $1,450,000,000 Amended and Restated Five-Year Credit Agreement, dated as of
May 3, 2000, as amended and restated as of March 7, 2001, among Viacom, Viacom International, the subsidiary borrowers parties thereto, the lenders named therein, JP Morgan Chase Bank
(as successor to The Chase Manhattan Bank), as administrative agent, Fleet National Bank and Bank of America, N.A., as co-syndication agents, and Bank of New York, as documentation agent. 

"Applicable Eurodollar Margin" shall mean the "Applicable Eurodollar Margin" determined in accordance with the Pricing Grid set forth in Annex I hereto. 

"Applicable Facility Fee Rate" shall mean the "Applicable Facility Fee Rate" determined in accordance with the Pricing Grid set forth in Annex I hereto. 

"Applicable Utilization Fee Rate" shall mean the "Applicable Utilization Fee Rate" determined in accordance with the Pricing Grid set forth in Annex I
hereto. 

"Assignment and Acceptance" shall mean an assignment and acceptance entered into by a Lender and an assignee, and accepted by the Administrative Agent,
in the form of Exhibit C. 

"Blockbuster Event" means the sale or deconsolidation of Blockbuster Inc. from Viacom, which sale or deconsolidation shall be substantially
non-recourse to Viacom and Viacom International. 

"Board" shall mean the Board of Governors of the Federal Reserve System of the United States. 

"Bonds" shall have the meaning assigned to such term in Section 8.2(g). 

"Borrower" shall mean, as applicable, Viacom or the relevant Subsidiary Borrower. 

2

 

"Business Day" shall mean any day (other than a day which is a Saturday, Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City; provided, however, that, when used in connection with a Eurodollar Loan, the term "Business
Day" shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market. 

"Capital Lease Obligations" of any Person shall mean the obligations of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property (other than satellite transponders), or a combination thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP. 

"Capital Stock" shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing. 

"Closing Certificate" shall mean a certificate, substantially in the form of Exhibit E. 

"Closing Date" shall mean February 28, 2003. 

"Code" shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time. 

"Co-Documentation Agents" shall have the meaning assigned to such term in the preamble hereto. 

"Commitment" shall mean, with respect to each Lender, the commitment of such Lender to make Loans pursuant to Section 2.1, as set forth on
Schedule 1.1, as such Lender's Commitment may be permanently terminated or reduced from time to time pursuant to Section 2.10 or changed pursuant to Section 9.4. 

"Commitment Increase Date" shall have the meaning assigned to such term in Section 2.10(e). 

"Commitment Increase Letter" shall have the meaning assigned to such term in Section 2.10(e) and shall be substantially in the form of
Exhibit G. 

"Commitment Utilization Percentage" shall mean on any day the percentage equivalent to a fraction (a) the numerator of which is the sum of
(i) the aggregate outstanding principal amount of Loans hereunder plus (ii) the Five-Year Facility Exposure, and
(b) the denominator of which is the sum of (i) the Total Commitment (or, on any day after termination of the Commitments, the Total Commitment in effect immediately preceding such
termination) plus (ii) the Five-Year Facility Total Commitment. 

"Communications Act" shall mean the Communications Act of 1934, as amended. 

"Compliance Certificate" shall have the meaning assigned to such term in Section 5.1. 

"Confidential Information" shall have the meaning assigned to such term in Section 9.15(a). 

"Confidentiality Agreement" shall mean a confidentiality agreement substantially in the form of Exhibit D, with such changes as Viacom may
approve. 

"Consolidated Coverage Ratio" shall mean, for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period. 

"Consolidated EBITDA" shall mean, with respect to Viacom and its Consolidated Subsidiaries for any period, operating profit (loss) (excluding that
related to Discontinued Operations), plus other income (loss), plus interest income, plus depreciation and amortization (excluding amortization related to programming rights, prepublication costs and
videocassettes), excluding (a) gains (losses) on sales of assets (except (I) gains (losses) on sales of inventory sold in the ordinary course of business and 

3

 

(II) gains (losses) on sales of other assets if such gains (losses) are less than $10,000,000 individually and less than $50,000,000 in the aggregate during such period), (b) other
non-cash items (including (i) provisions for losses and additions to valuation allowances, (ii) provisions for restructuring, litigation and environmental reserves and losses
on the Disposition of businesses and (iii) pension settlement charges), and (c) nonrecurring expenses incurred during such period in connection with the merger of CBS and Viacom pursuant
to the Agreement and Plan of Merger entered into by CBS, Viacom and Viacom/CBS LLC dated as of September 6, 1999, as amended, amended and restated, supplemented and otherwise modified from time
to time, minus cash payments made during such period in respect of non-cash charges taken during any previous period (excluding cash payments in respect of non-cash charges
taken prior to December 31, 1999). 

"Consolidated Interest Expense" shall mean for any period the gross cash interest expense of Viacom and its Consolidated Subsidiaries on Indebtedness
for such period plus cash dividends paid on preferred stock to persons other than Viacom and its Wholly Owned Subsidiaries for such period, but excluding the gross cash interest expense of the
Discontinued Operations for such period. 

"Consolidated Subsidiary" shall mean, as to any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be consolidated with the financial statements of such Person in accordance with GAAP. 

"Consolidated Tangible Assets" shall mean at any date the assets of Viacom and its Subsidiaries determined on such date on a consolidated basis, less
goodwill and other intangible assets. 

"Credit Event" shall mean the making of any Loan. It is understood that conversions and continuations pursuant to Section 2.5 do not constitute
"Credit Events". 

"Debt Rating" shall mean the rating applicable to Viacom's senior, unsecured, non-credit-enhanced long-term indebtedness for
borrowed money, as assigned by either Rating Agency. 

"Default" shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default. 

"Discontinued Operations" shall mean the operations classified as "discontinued operations" pursuant to Accounting Principles Board Opinion
No. 30 as presented in the quarterly report of CBS on Form 10-Q for the quarter ended September 30, 1997 and filed with the SEC on December 14, 1997. 

"Disposition" shall mean, with respect to any Property, any sale, lease, assignment, conveyance, transfer or other disposition thereof; and the terms
"Dispose" and "Disposed of" shall have correlative meanings. 

"Dollars" or "$" shall mean lawful money of the United States of America. 

"Environmental Laws" shall mean any and all Federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment, including, without limitation, ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes. 

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. 

"ERISA Affiliate" shall mean, with respect to Viacom, any trade or business (whether or not incorporated) that is a member of a group of which Viacom is
a member and which is treated as a single employer under Section 414 of the Code. 

4

 

"Eurodollar Loan" shall mean any Loan bearing interest at a rate determined by reference to the Eurodollar Rate. 

"Eurodollar Rate" shall mean, with respect to an Interest Period pertaining to any Eurodollar Loan, the rate of interest determined on the basis of the
rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate Screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate Screen (or otherwise on the Telerate Service),
the "Eurodollar Rate" shall instead be the interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
average of the rates at which Dollar deposits approximately equal in principal amount to, in the case of a Eurodollar Tranche, the portion of such Eurodollar Tranche of the Lender serving as
Administrative Agent, and for a maturity comparable to such Interest Period, are offered by the principal London offices of the Reference Banks (or, if any Reference Bank does not at the time maintain
a London office, the principal London office of any affiliate of such Reference Bank) for immediately available funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period. 

"Eurodollar Tranche" shall mean the collective reference to Eurodollar Loans made by the Lenders, the then current Interest Periods with respect to all
of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day). 

"Event of Default" shall have the meaning assigned to such term in Article VI; provided that any
requirement for the giving of notice, the lapse of time, or both, has been satisfied. 

"Excess Utilization Day" shall mean each day on which the Commitment Utilization Percentage exceeds 50%. 

"Exchange Act Report" shall have the meaning assigned to such term in Section 3.3. 

"Existing Credit Agreement" shall mean the $1,800,000,000 364-Day Credit Agreement, dated as of March 5, 2002, among Viacom, Viacom
International, the subsidiary borrowers parties thereto, the lenders named therein, JP Morgan Chase Bank, as administrative agent, Salomon Smith Barney Inc., as syndication agent, and Fleet
National Bank and Bank of America, N.A., as co-documentation agents. 

"Facility Fees" shall mean all fees payable pursuant to Section 2.6(a). 

"Federal Funds Effective Rate" shall have the meaning assigned to such term in the definition of "Alternate Base Rate". 

"Fees" shall mean the Facility Fees, the Administrative Agent's Fees and the Utilization Fees. 

"Financial Covenant" shall mean the financial covenant contained in Section 5.7. 

"Financial Officer" of any corporation shall mean its Chief Financial Officer, its Vice President and Treasurer or its Vice President and Chief
Accounting Officer or, in each case, any comparable officer or any Person designated by any such officer. 

"Five-Year Credit Agreement" shall mean the Five-Year Credit Agreement, dated as of March 7, 2001, among Viacom, Viacom
International, each subsidiary borrower party thereto, the lenders party thereto, JPMorgan Chase Bank (as successor to The Chase Manhattan Bank), as administrative agent, Salomon Smith
Barney Inc., as syndication agent, and Fleet National Bank and Bank of America, N.A., as co-documentation agents, as the same may be amended, supplemented, restated or otherwise
modified from time to time. 

"Five-Year Facility Exposure" shall mean on any day the sum of (i) the Total Revolving Facility Exposure (as defined in the
Five-Year Credit Agreement), including the aggregate outstanding principal amount 

5

 

of Letters of Credit, Swingline Loans and Competitive Loans (as such terms are defined in the Five-Year Credit Agreement), plus
(ii) the Total Canadian Facility Exposure (as defined in the Five-Year Credit Agreement), in each case under the Five-Year Credit Agreement on such day. 

"Five-Year Facility Total Commitment" shall mean on any day the sum of the Total Revolving Commitment and the Total Canadian Commitment (as
such terms are defined in the Five-Year Credit Agreement) (or, on any day after termination of the Commitments (as defined in the Five-Year Credit Agreement), the Total
Revolving Commitment and the Total Canadian Commitment in effect immediately preceding such termination), in each case under the Five-Year Credit Agreement on such day. 

"GAAP" shall mean generally accepted accounting principles. 

"Governmental Authority" shall mean any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body. 

"Granting Bank" shall have to meaning specified in Section 9.4(i). 

"Guarantee" of or by any Person shall mean any obligation, contingent or otherwise, of such Person guaranteeing or entered into with the purpose of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of
such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Indebtedness, (b) to purchase Property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of
such Indebtedness or (c) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that the term "Guarantee" shall not include endorsements for collection or deposit, in either case in the ordinary
course of business. 

"Indebtedness" of any Person shall mean at any date, without duplication, (i) all obligations of such Person for borrowed money (including,
without limitation, in the case of any Borrower, the obligations of such Borrower for borrowed money under this Agreement), (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of Property or services, except as provided below, (iv) all obligations of
such Person as lessee under Capital Lease Obligations, (v) all Indebtedness of others secured by a Lien on any Property of such Person, whether or not such Indebtedness is assumed by such
Person, (vi) all Indebtedness of others directly or indirectly guaranteed or otherwise assumed by such Person, including any obligations of others endorsed (otherwise than for collection or
deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including, without
limitation, any Indebtedness in effect guaranteed by such Person through any agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire such obligation or any security therefor,
or to provide funds for the payment or discharge of such obligation, or to maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation,  provided that
Indebtedness of Viacom and its Subsidiaries shall not include (a) guarantees in existence on the date hereof of Indebtedness of
Discontinued Operations and (b) guarantees of Indebtedness that are identified on Schedule 1.1(a) hereto, (vii) all obligations of such Person as issuer, customer or account party
under letters of credit or bankers' acceptances that are either drawn or that back financial obligations that would otherwise be Indebtedness; provided,
however, that in each of the foregoing clauses (i) through (vii), Indebtedness shall not include obligations (other than under this Agreement) specifically with respect
to the production, distribution and acquisition of motion pictures or other programming rights, talent or publishing rights. 

6

 

"Indemnified Person" shall have the meaning assigned to such term in Section 9.5(b). 

"Interest Payment Date" shall mean (a) with respect to any Eurodollar Loan, the last day of the Interest Period applicable thereto and, in the
case of a Eurodollar Loan with an Interest Period of more than three months' duration, each day that would have been an Interest Payment Date for such Loan had successive Interest Periods of three
months' duration been applicable to such Loan and, in addition, the date of any conversion of any Eurodollar Loan to an ABR Loan, the date of repayment or prepayment
of any Eurodollar Loan and the Maturity Date; (b) with respect to any ABR Loan, the last day of each March, June, September and December and the Maturity Date. 

"Interest Period" shall mean as to any Eurodollar Loan, the period commencing on the borrowing date or conversion date of such Loan, or on the last day
of the immediately preceding Interest Period applicable to such Loan, as the case may be, and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 7 days (subject to the prior consent of each Lender) or 1, 2, 3 or 6 months or (subject to the prior consent of each Lender) 9 or 12 months
thereafter, as the relevant Borrower may elect; provided, however, that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless, in the case of Eurodollar Loans only, such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and (ii) notwithstanding anything to the contrary herein, no Borrower may select an Interest Period which would end
after the Maturity Date. Interest shall accrue from and including that first day of an Interest Period to but excluding the last day of such Interest Period. 

"Joint Lead Arrangers" shall mean JP Morgan Securities Inc., a New York corporation, and Salomon Smith Barney Inc., a New York
corporation. 

"JPMorgan Chase" shall have the meaning assigned to such term in the preamble to this Agreement. 

"Lenders" shall have the meaning assigned to such term in the preamble to this Agreement. 

"Lender Affiliate" shall mean, (a) with respect to any Lender, (i) an affiliate of such Lender or (ii) any entity (whether a
corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an affiliate of such investment advisor. 

"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), security
interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention
agreement. 

"Loan" shall mean the revolving loans made by the Lenders to any Borrower pursuant to Section 2.3. Each Loan shall be a Eurodollar Loan or an ABR
Loan. 

"Loan Documents" shall mean this Agreement and the Administrative Agent Fee Letter. 

"Losses" shall have the meaning assigned to such term in Section 9.5(b). 

"Material Acquisition" shall mean any acquisition of Property or series of related acquisitions of Property (including by way of merger) which
(a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the
payment of consideration by Viacom and its Subsidiaries (valued at the initial principal amount thereof in the case of non-cash consideration consisting of notes or other debt 

7

 

securities and valued at fair market value in the case of other non-cash consideration) in excess of $100,000,000. 

"Material Adverse Effect" shall mean (a) a material adverse effect on the Property, business, results of operations or financial condition of
Viacom and its Subsidiaries taken as a whole or (b) material impairment of the ability of Viacom to perform any of its obligations under this Agreement. 

"Material Disposition" shall mean any Disposition of Property or series of related Dispositions of Property which yields gross proceeds to Viacom or any
of its Subsidiaries (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the
case of other non-cash proceeds) in excess of $100,000,000. 

"Material Subsidiary" shall mean any "significant subsidiary" of Viacom as defined in Regulation S-X of the SEC;  provided, that each Subsidiary Borrower shall in
any event constitute a Material Subsidiary. 

"Maturity Date" shall have the meaning assigned to such term in Section 2.4. 

"Moody's" shall mean Moody's Investors Service, Inc. or any successor thereto. 

"Multiemployer Plan" shall mean a multiemployer plan as defined in Section 3(37) of ERISA to which contributions have been made by Viacom or any
ERISA Affiliate of Viacom and which is covered by Title IV of ERISA. 

"New Lender" shall have the meaning assigned to such term in Section 2.10(d). 

"New Lender Supplement" shall mean the agreement made pursuant to Section 2.10(d) substantially in the form of Exhibit F. 

"Non-Consenting Lender" shall have the meaning assigned to such term in Section 2.18(b). 

"Non-U.S. Person" shall have the meaning assigned to such term in Section 2.17(f). 

"Other Taxes" shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document. 

"Outstanding Extensions of Credit" shall mean, as to any Lender at any time, an amount equal to the sum of the aggregate principal amount of all Loans
made by such Lender then outstanding. 

"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA, or any successor thereto. 

"Person" shall mean any natural person, corporation, business trust, joint venture, association, company, partnership, limited liability company or
other entity, or any government or any agency or political subdivision thereof. 

"Plan" shall mean any employee pension benefit plan as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code and which is maintained for employees of Viacom or any ERISA Affiliate. 

"Prime Rate" shall have the meaning assigned to such term in the definition of "Alternate Base Rate". 

"Pro Forma Period" shall have the meaning assigned to such term in Section 1.2(c). 

"Property" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock. 

"Rating Agencies" shall mean S&P and Moody's. 

"Reference Banks" shall mean JPMorgan Chase, Citibank N.A. and Bank of America, N.A. 

8

 

"Register" shall have the meaning assigned to such term in Section 9.4(d). 

"Regulation D" shall mean Regulation D of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof. 

"Regulation U" shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof. 

"Required Lenders" shall mean, at any time, Lenders whose respective Total Facility Percentages aggregate more than 50%. 

"Responsible Officer" of any corporation shall mean any executive officer or Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of such corporation in respect of this Agreement (or, in the case of matters relating to ERISA, any officer responsible for the
administration of the pension funds of such corporation). 

"Revolving Credit Borrowing Request" shall mean a request made pursuant to Section 2.3 in the form of Exhibit B-1. 

"Revolving Credit Maturity Date" shall mean February 27, 2004. 

"S&P" shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto. 

"SEC" shall mean the Securities and Exchange Commission. 

"Sole Bookrunner" shall mean JP Morgan Securities Inc., a New York corporation. 

"SPC" shall have the meaning specified in Section 9.4(i). 

"Subsidiary" shall mean, for any Person (the "Parent"), any corporation, partnership or other entity of
which shares of Voting Capital Stock sufficient to elect a majority of the board of directors or other Persons performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power
by reason of the happening of any contingency) are at the time directly or indirectly owned or controlled by the Parent or one or more of its Subsidiaries or by the Parent and one or more of its
Subsidiaries. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of Viacom. 

"Subsidiary Borrower" shall mean any Subsidiary of Viacom (a) which is designated as a Subsidiary Borrower by Viacom pursuant to a Subsidiary
Borrower Designation, (b) which has delivered to the Administrative Agent a Subsidiary Borrower Request and (c) whose designation as a Subsidiary Borrower has not been terminated
pursuant to Section 4.2. No Subsidiary of Viacom incorporated in Canada or any province or territory thereof may be a Subsidiary Borrower hereunder. 

"Subsidiary Borrower Designation" shall mean a designation, substantially in the form of Exhibit B-2, which may be delivered by
Viacom and approved by Viacom and shall be accompanied by a Subsidiary Borrower Request. 

"Subsidiary Borrower Obligations" shall mean, with respect to each Subsidiary Borrower, the unpaid principal of and interest on the Loans made to such
Subsidiary Borrower (including, without limitation, interest accruing after the maturity of the Loans made to such Subsidiary Borrower and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Subsidiary Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) and all other obligations and liabilities of such Subsidiary Borrower to the Administrative Agent or to any Lender, whether direct or 

9

 

indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement. 

"Subsidiary Borrower Request" shall mean a request, substantially in the form of Exhibit B-3, which is received by the Administrative
Agent in connection with a Subsidiary Borrower Designation. 

"Syndication Agent" shall have the meaning assigned to such term in the preamble hereto. 

"Test Period" shall have the meaning assigned to such term in Section 1.2(c). 

"Total Commitment" shall mean at any time the aggregate amount of the Commitments in effect at such time. 

"Total Facility Exposure" shall mean at any time the aggregate amount of the Outstanding Extensions of Credit at such time. 

"Total Facility Percentage" shall mean, as to any Lender at any time, the quotient (expressed as a percentage) of (a) such Lender's Commitment
(or (x) for the purposes of acceleration of the Loans pursuant to clause (II) of Article VI or (y) if the Commitments have terminated, such Lender's Outstanding Extensions
of Credit) and (b) the aggregate of all Lenders' Commitments (or (x) for the purposes of acceleration of the Loans pursuant to clause (II) of Article VI or (y) if
the Commitments have terminated, the Total Facility Exposure)). 

"Transferee" shall mean any assignee or participant described in Section 9.4(b) or (f). 

"Type" when used in respect of any Loan, shall refer to the Rate by reference to which interest on such Loan is determined. For purposes hereof,
"Rate" shall mean the Eurodollar Rate or the Alternate Base Rate. 

"Utilization Fee" shall have the meaning assigned to such term in Section 2.6(c). 

"Viacom" shall have the meaning assigned to such term in the preamble to this Agreement. 

"Viacom International" shall have the meaning assigned to such term in the preamble to this Agreement. 

"Viacom Obligations" shall mean, with respect to Viacom, the unpaid principal of and interest on the Loans made to Viacom (including, without
limitation, interest accruing after the maturity of the Loans made to Viacom and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to Viacom, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) and all other obligations, including its
Guarantee obligations hereunder, and liabilities of Viacom to the Administrative Agent or to any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this Agreement. 

"Voting Capital Stock" shall mean securities or other ownership interests of a corporation, partnership or other entity having by the terms thereof
ordinary voting power to vote in the election of the board of directors or other Persons performing similar functions of such corporation, partnership or other entity (without regard to the occurrence
of any contingency). 

10

   
"Wholly Owned Subsidiary" shall mean any Subsidiary of which all shares of Voting Capital Stock (other than, in the case of a corporation, directors'
qualifying shares) are owned directly or indirectly by the Parent (as defined in the definition of "Subsidiary"). 

SECTION
1.2.    Terms Generally.    (a) The definitions in Section 1.1 shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and
"including" shall, except where the context otherwise requires, be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. 

(b)  Except
as otherwise expressly provided herein, all terms of an accounting nature shall be construed in accordance with GAAP in effect from time to time. The parties hereto agree,
however, that in the event that any change in accounting principles from those used in the preparation of the financial statements referred to in Section 3.2 is, after March 7, 2001,
occasioned by the promulgation of rules, regulations, pronouncements, opinions and statements by or required by the Financial Accounting Standards Board or Accounting Principles Board or the American
Institute of Certified Public Accountants (or successors thereto or agencies with similar functions) and such change materially affects the calculation of any component of the Financial Covenant or
any standard or term contained in this Agreement, the Administrative Agent and Viacom shall negotiate in good faith to amend such Financial Covenant, standards or terms found in this Agreement (other
than in respect of financial statements to be delivered hereunder) so that, upon adoption of such changes, the criteria for evaluation of Viacom's and its Subsidiaries' financial condition shall be
the same after such change as if such change had not been made; provided, however, that (i) any such amendments shall not become effective for
purposes of this Agreement unless approved by the Required Lenders and (ii) if Viacom and the Required Lenders cannot agree on such an amendment, then the calculations under such Financial
Covenant, standards or terms shall continue to be computed without giving effect to such change in accounting principles; provided further, however,
that the parties hereto agree that Viacom and its Subsidiaries have adopted Statement of Position 00-2, "Accounting by Producers or Distributors of Films" effective as from
January 1, 2000; Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" effective as from
January 1, 2002; SFAS No. 143, "Accounting for Asset Retirement Obligations" effective as from January 1, 2003; SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" effective as from January 1, 2002; SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendments to FASB Statement No. 13 and
Technical Corrections" effective as from January 1, 2003. 

(c)  For
the purposes of calculating Consolidated EBITDA and Consolidated Interest Expense for any period (a "Test Period"), (i) if
at any time from the period (a "Pro Forma Period") commencing on the second day of such Test Period and ending on the date which is ten days prior to
the date of delivery of the Compliance Certificate in respect of such Test Period (or, in the case of any pro forma calculation made pursuant hereto in
respect of a particular transaction, ending on the date such transaction is consummated after giving effect thereto), Viacom or any Subsidiary shall have made any Material Disposition, the
Consolidated EBITDA for such Test Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the Property which is the subject of such Material Disposition for
such Test Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Test Period, and Consolidated Interest Expense for such Test Period shall be
reduced by an amount equal to the Consolidated Interest Expense for such Test Period attributable to any Indebtedness of Viacom or any Subsidiary repaid, repurchased, defeased or otherwise discharged
with respect to Viacom and its Subsidiaries in connection with such Material Disposition (or, if the Capital Stock of any Subsidiary is sold, the Consolidated Interest Expense for such Test Period
directly attributable to the Indebtedness of such Subsidiary to the extent Viacom and 

11

 

its continuing Subsidiaries are no longer liable for such Indebtedness after such Disposition); (ii) if during such Pro Forma Period Viacom or any Subsidiary shall have made a Material
Acquisition, Consolidated EBITDA and Consolidated Interest Expense for such Test Period shall be calculated after giving pro forma effect thereto
(including the incurrence or assumption of any Indebtedness in connection therewith) as if such Material Acquisition (and the incurrence or assumption of any such Indebtedness) occurred on the first
day of such Test Period; and (iii) if during such Pro Forma Period any Person that subsequently became a Subsidiary or was merged with or into Viacom or any Subsidiary since the beginning of
such Pro Forma Period shall have entered into any disposition or acquisition transaction that would have required an adjustment pursuant to clause (i) or (ii) above if made by Viacom or
a Subsidiary during such Pro Forma Period, Consolidated EBITDA and Consolidated Interest Expense for such Test Period shall be calculated after giving pro
forma effect thereto as if such transaction occurred on the first day of such Test Period. For the purposes of this paragraph, whenever pro
forma effect is to be given to a Material Disposition or Material Acquisition, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness discharged or incurred in connection therewith, the pro forma calculations shall be determined in good faith by a
Financial Officer of Viacom. If any Indebtedness bears a floating rate of interest and the incurrence or assumption thereof is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the last day of the relevant Pro Forma Period had been the applicable rate for the entire relevant
Test Period (taking into account any interest rate protection agreement applicable to such Indebtedness if such interest rate protection agreement has a remaining term in excess of 12 months).
Comparable adjustments shall be made in connection with any determination of Consolidated EBITDA. 

(d)  For
purposes of the Financial Covenant, (i) the Discontinued Operations shall be disregarded and (ii) the businesses classified as Discontinued Operations shall be
limited to those businesses treated as such in the financial statements of Viacom referred to in the definition of "Discontinued Operations" and the accounting treatment of Discontinued Operations
shall be consistent with the accounting treatment thereof in such financial statements. 

12

 
ARTICLE II

THE CREDITS  

SECTION
2.1.    Commitments.    Subject to the terms and conditions hereof and relying upon the representations and warranties
herein set forth, each Lender agrees, severally and not jointly, to make Loans to Viacom or any Subsidiary Borrower, at any time and from time to time on and after the Closing Date and until the
earlier of (a) the Business Day immediately preceding the Revolving Credit Maturity Date and (b) the termination of the Commitment of such Lender, in an aggregate principal amount at any
time outstanding not to exceed such Lender's Commitment. Each Borrower may borrow, prepay and reborrow Loans on and after the Closing Date and prior to the Revolving Credit Maturity Date, subject to
the terms, conditions and limitations set forth herein. 

SECTION
2.2.    Loans.    (a) Each Loan shall be made to the relevant Borrower by the Lenders ratably in accordance with
their respective Commitments. The Loans shall be made in minimum amounts equal to (i) in the case of Eurodollar Loans, $50,000,000 or an integral multiple of $5,000,000 in excess thereof, and
(ii) in the case of ABR Loans, $25,000,000 or an integral multiple of $5,000,000 in excess thereof (or an aggregate principal amount equal to the remaining balance of the available Total
Commitment). 

(b)  Each
Lender shall make each Loan to be made by it on the proposed date thereof by wire transfer of immediately available funds to the Administrative Agent in New York, New York, not
later than 12:00 noon, New York City time (or, in connection with an ABR Loan to be made on the same day on which a notice is submitted, 12:30 p.m., New York City time) and the Administrative
Agent shall by 3:00 p.m., New York City time, credit the amounts so received to the general deposit account of the relevant Borrower with the Administrative Agent. 

SECTION
2.3.    Revolving Credit Borrowing Procedure.    In order to request a Loan, the relevant Borrower shall hand deliver or
telecopy to the Administrative Agent a Revolving Credit Borrowing Request in the form of Exhibit B-1 (a) in the case of a Eurodollar Loan, not later than 11:00 a.m.,
New York City time, three Business Days before a proposed borrowing and (b) in the case of an ABR Loan, not later than 11:00 a.m., New York City time, on the day of a proposed borrowing.
Such notice shall be irrevocable and shall in each case specify (i) whether the Loan then being requested is to be a Eurodollar Loan or an ABR Loan, (ii) the date of such Loan (which
shall be a Business Day) and the amount thereof; and (iii) in the case of a Eurodollar Loan, the Interest Period with respect thereto. The Administrative Agent shall promptly advise the Lenders
of any notice given pursuant to this Section 2.3 and of each Lender's portion of the requested Loan. 

SECTION
2.4.    Repayment of Loans.    Each Borrower shall repay all outstanding Loans on the first anniversary of the Revolving
Credit Maturity Date (or such earlier date on which the Loans shall be due and payable in accordance herewith) (the "Maturity Date"). Each Loan shall
bear interest from and including the date thereof on the outstanding principal balance thereof as set forth in Section 2.7. 

SECTION
2.5.    Conversion and Continuation Options.    (a) The relevant Borrower may elect from time to time to convert
Eurodollar Loans (or, subject to Section 2.7(d), a portion thereof) to ABR Loans on the last day of an Interest Period with respect thereto by giving the Administrative Agent prior irrevocable
notice of such election. The relevant Borrower may elect from time to time to convert ABR Loans (subject to Section 2.7(d)) to Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election. Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period therefor. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof. All or any part of outstanding Eurodollar Loans and ABR Loans may be converted as provided herein;  provided, that no Loan may
be converted into a Eurodollar Loan when any Event of Default has occurred and is 

13

 

continuing and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such a conversion. 

(b)  Any
Eurodollar Loans (or, subject to Section 2.7(d), a portion thereof) may be continued as such upon the expiration of the then current Interest Period with respect thereto by
the relevant Borrower giving irrevocable notice to the Administrative Agent, not less than three Business Days prior to the last day of the then current Interest Period with respect thereto, of the
length of the next Interest Period to be applicable to such Loans; provided, that no Eurodollar Loan may be continued as such when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such a continuation; and  provided, further, that if
the relevant Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Eurodollar Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. Upon receipt of any notice
from a Borrower pursuant to this Section 2.5(b), the Administrative Agent shall promptly notify each Lender thereof. The Administrative Agent shall promptly notify the applicable Borrower upon
the determination in accordance with this Section 2.5(b), by it or the Required Lenders, not to permit such a continuation. 

SECTION
2.6.    Fees.    (a) Viacom agrees to pay to the Administrative Agent for the account of each Lender a Facility Fee
for the period from and including the Closing Date to the Revolving Credit Maturity Date (or such earlier date on which the Commitments shall terminate in accordance herewith), computed at a  per annum
rate equal to the Applicable Facility Fee Rate on such Lender's Commitment (whether used or unused);  provided that, if such Lender continues to have any Outstanding Extensions of Credit after its
Commitment terminates, then such Facility Fee shall
continue to accrue on the daily amount of such Lender's Outstanding Extensions of Credit from and including the date on which its Commitment terminates to but excluding the date on which such Lender
ceases to have any Outstanding Extensions of Credit. All Facility Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days and shall be payable quarterly
in arrears on the last day of each March, June, September and December, on the Revolving Credit Maturity Date or such earlier date on which the Commitments shall be terminated, commencing on the
first of such dates to occur after the Closing Date, and on the date (after termination of the Commitments) on which each Lender ceases to have any Outstanding Extensions of Credit. 

(b)  Viacom
agrees to pay to the Administrative Agent, for its own account, the administrative agent's fees ("Administrative Agent's Fees")
provided for in the Administrative Agent Fee Letter at the times provided therein. 

(c)  Viacom
agrees to pay to each Lender, through the Administrative Agent, on each Interest Payment Date for ABR Loans, a utilization fee (a "Utilization
Fee") at a rate per annum equal to the Applicable Utilization Fee Rate for each Excess Utilization Day during the period covered
by such Interest Payment Date on the Outstanding Extensions of Credit of such Lender on such Excess Utilization Day. All Utilization Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days and shall be payable in arrears. 

(d)  All
Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the relevant Lenders. Once paid,
none of the Fees shall be refundable under any circumstances (other than corrections of errors in payment). 

SECTION
2.7.    Interest on Loans; Eurodollar Tranches; Etc.    (a) Subject to the provisions of Section 2.8,
Eurodollar Loans shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to in the case of each Eurodollar Loan, the
Eurodollar Rate for the Interest Period in effect for such Loan plus the Applicable Eurodollar Margin. The Eurodollar Rate for each Interest Period shall be determined by the Administrative Agent, and 

14

 

such determination shall be conclusive absent manifest error. The Administrative Agent shall promptly advise the relevant Borrower and each Lender of such determination. 

(b)  Subject
to the provisions of Section 2.8, ABR Loans shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year of 360 days at all other times) at a rate per annum equal to the Alternate Base Rate. The Alternate Base Rate
shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. 

(c)  Interest
on each Loan shall be payable on each applicable Interest Payment Date. 

(d)  Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions, continuations, repayments and prepayments of Eurodollar Loans hereunder and all selections of
Interest Periods hereunder in respect of Eurodollar Loans shall be in such amounts and shall be made
pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $50,000,000 or a whole
multiple of $5,000,000 in excess thereof. Unless otherwise agreed by the Administrative Agent, in no event shall there be more than 25 Eurodollar Tranches outstanding at any time. 

(e)  If
no election as to the Type of Loan is specified in any notice of borrowing with respect thereto, then the requested Loan shall be an ABR Loan. If no Interest Period with respect to
a Eurodollar Loan is specified in any notice of borrowing, conversion or continuation, then the relevant Borrower shall be deemed to have selected an Interest Period of one month's duration. 

SECTION
2.8.    Default Interest.    If all or a portion of the principal amount of any Loan shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), all outstanding Loans (whether or not overdue) shall bear interest at a rate per annum which is equal to the rate that would otherwise be applicable
thereto pursuant to the provisions of Section 2.7 plus 2% and (b) if all or a portion of any interest payable on any Loan or any Fee or
other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate
otherwise applicable to ABR Loans pursuant to Section 2.7(b) plus 2%, in each case, with respect to clauses (a) and (b) above, from
the date of such non-payment until such amount is paid in full (as well after as before judgment). 

SECTION
2.9.    Alternate Rate of Interest.    In the event, and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Loan (i) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon each Borrower) that, by
reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (ii) the Required Lenders
shall have determined and shall have notified the Administrative Agent that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost
to such Lenders (as conclusively certified by such Lenders) of making or maintaining Eurodollar Loans during such Interest Period, the Administrative Agent shall, as soon as practicable thereafter,
give written or telecopy notice of such determination to the Borrowers and the Lenders. In the event of any such determination, until the Administrative Agent shall have advised the Borrowers and the
Lenders that the circumstances giving rise to such notice no longer exist, (i) any request by a Borrower for a Eurodollar Loan pursuant to Section 2.3 to be made after such determination
shall be deemed to be a request for an ABR Loan and (ii) any request by a Borrower for conversion into or a continuation of a Eurodollar Loan pursuant to Section 2.5 to be made after
such determination shall have no force and effect (in the case of a requested conversion) or shall be deemed to be a request for a conversion into an ABR Loan (in the case of a requested
continuation). Each determination by the Administrative Agent or the Required Lenders hereunder shall be conclusive absent manifest error. 

15

 

SECTION
2.10.    Termination, Reduction and Increase of Commitments.    (a) Upon at least three Business Days' prior
irrevocable written or telecopy notice to the Administrative Agent, Viacom may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Commitments;  provided, however, that (i) each partial reduction of the Commitments shall be in a minimum principal amount of $10,000,000 and in integral
multiples of $1,000,000 in excess thereof and (ii) no such termination or reduction shall be made if, after giving effect thereto and to any prepayments of the Loans made on the effective date
thereof, (x) the Outstanding Extensions of Credit of any Lender would exceed such Lender's Commitment then in effect or (y) the Total Facility Exposure would exceed the Total Commitment
then in effect. The Administrative Agent shall promptly advise the Lenders of any notice given pursuant to this Section 2.10(a). 

(b)  Except
as otherwise provided in Section 2.18, each reduction in the Commitments hereunder shall be made ratably among the Lenders in accordance with their respective
Commitments. Viacom agrees to pay to the Administrative Agent for the account of the Lenders, on the date of termination or reduction of the Commitments, the Facility Fees on the amount of the
Commitments so terminated or reduced accrued through the date of such termination or reduction. 

(c)  Viacom
shall have the right at any time and from time to time to increase the Total Commitments to an aggregate amount, when added to the aggregate amount of Total Commitments (as
defined under the Five-Year Credit Agreement) under the Five-Year Credit Agreement, not to exceed $4,500,000,000 (i) by requesting that one or more banks or other
financial institutions not a party to this Agreement become a Lender hereunder or (ii) by requesting that any Lender already party to this Agreement increase the amount of such Lender's
Commitment; provided, that the addition of any bank or financial institution pursuant to clause (i) above shall be subject to the consent of the
Administrative Agent (which consent shall not be unreasonably withheld); provided further, the Commitment of any bank or other financial institution
pursuant to clause (i) above, shall be in an aggregate principal amount at least equal to $10,000,000; provided further, the amount of the
increase of any Lender's Commitment pursuant to clause (ii) above when added to the amount of such Lender's Commitment before the increase, shall be in an aggregate principal amount at least
equal to $10,000,000. 

(d)  Any
additional bank, financial institution or other entity which elects to become a party to this Agreement and obtain a Commitment pursuant to clause (c) of this
Section 2.10 shall execute a New Lender Supplement (each, a "New Lender Supplement") with Viacom and the Administrative Agent, substantially in
the form of Exhibit G, whereupon such bank, financial institution or other entity (a "New Lender") shall become a Lender for all purposes and to
the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement, and Schedule 1.1 shall be deemed to be amended to add the name and
Commitment of such New Lender. 

(e)  Any
increase in the Total Commitment pursuant to clause (c) of this Section 2.10 shall be effective only upon the execution and delivery to Viacom and the Administrative
Agent of a commitment increase letter in substantially the form of Exhibit G hereto (a "Commitment Increase Letter"), which Commitment Increase
Letter shall be delivered to the Administrative Agent not less than five Business Days prior to the Commitment Increase Date and shall specify (i) the amount of the Commitment of any bank or
financial institution not a party to this agreement which is becoming a Lender or the amount of any increase in the Commitment of any Lender and (ii) the date such increase is to become
effective (the "Commitment Increase Date"). 

(f)    Any
increase in the Total Commitment pursuant to this Section 2.10 shall not be effective unless: 

	(i)
	no
Default or Event of Default shall have occurred and be continuing on the Commitment Increase Date;

	(ii)
	each
of the representations and warranties made by Viacom and the Subsidiary Borrowers in Sections 3.1, 3.2, 3.4, 3.5 and 3.6 shall be true and correct
in all material respects on the 

16

 

Commitment
Increase Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date in which case such
representations and warranties shall be true and correct in all material respects as of such earlier date; and 

	(iii)
	the
Administrative Agent shall have received each of (A) a certificate of the corporate secretary or assistant secretary of the Borrowers as to
the taking of any corporate action necessary in connection with such increase and (B) an opinion or opinions of general counsel to the Borrowers as to their corporate power and authority to
borrow hereunder after giving effect to such increase and such other matters relating thereto as the Administrative Agent and its counsel may reasonably request. 

(g)  Each
notice requesting an increase in the Total Commitments pursuant to this Section 2.10 shall constitute a certification to the effect set forth in clauses (i) and
(ii) of Section 2.10(f). 

(h)  No
Lender shall at any time be required to agree to a request of Viacom to increase its Commitment or obligations hereunder. 

SECTION
2.11.    Optional Prepayments of Loans.    The relevant Borrower may at any time and from time to time prepay the Loans, in
whole or in part, without premium or penalty, upon giving irrevocable written or telecopy notice (or telephone notice promptly confirmed by written or telecopy notice) to the Administrative Agent:
(i) before 10:00 a.m., New York City time, three Business Days prior to prepayment, in the case of Eurodollar Loans, and (ii) before 10:00 a.m., New York City time, one
Business Day prior to prepayment, in the case of ABR Loans. Such notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to each. If a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the relevant
Borrower shall also pay any amounts owing pursuant to Section 2.13. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of ABR Loans) accrued interest to such date on the amount prepaid.
Partial prepayments of Loans shall be in an aggregate principal amount of $10,000,000 or a whole multiple of $1,000,000 in excess thereof. 

SECTION
2.12.    Reserve Requirements; Change in Circumstances.    (a) Notwithstanding any other provision herein, if after
the Closing Date any change in applicable law or regulation (including any change in the reserve percentages provided for in Regulation D) or in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration thereof shall change the basis of taxation of payments to any Lender of the principal of or interest on any Eurodollar Loan
made by such Lender (other than changes in respect of taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office (or in which it holds any
Eurodollar Loan) or by any political subdivision or taxing authority therein and other than taxes that would not have been imposed but for the failure of such Lender to comply with applicable
certification, information, documentation or other reporting requirements), or shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of or deposits
with or for the account of such Lender, or shall impose on such Lender or the London interbank market any other condition affecting this Agreement or any Eurodollar Loan made by such Lender, and the
result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan or to reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise) in respect of any Eurodollar Loan by an amount deemed by such Lender to be material, then the relevant Borrower agrees to pay to such Lender as
provided in paragraph (c) below such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered. 

17

 

(b)  If
any Lender shall have determined that the adoption after the Closing Date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change in any law,
rule, regulation or guideline regarding capital adequacy or in the interpretation or administration of any of the foregoing by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender (or any lending office of such Lender) or any Lender's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's capital or on
the capital of such Lender's holding company, if any, as a consequence of this Agreement or the Loans made by such Lender pursuant hereto to a level below that which such Lender or such Lender's
holding company could have achieved but for such applicability, adoption, change or compliance (taking into consideration such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time the relevant Borrower agrees to pay to such Lender as provided in paragraph (c) below such
additional amount or amounts as will compensate such Lender or such Lender's holding company for any such reduction suffered. 

(c)  A
certificate of each Lender setting forth such amount or amounts as shall be necessary to compensate such Lender as specified in paragraph (a) or (b) above, as the case
may be, and the basis therefor in reasonable detail shall be delivered to the relevant Borrower and shall be conclusive absent manifest error. The relevant Borrower shall pay each Lender the amount
shown as due on any such certificate within 30 days after its receipt of the same. 

(d)  Except
as provided in this paragraph, failure on the part of any Lender to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of such Lender's right to demand compensation with respect to any other period. The protection of this Section 2.12
shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, guideline or other change or condition which shall have
occurred or been imposed so long as it shall be customary for Lenders affected thereby to comply therewith. No Lender shall be entitled to compensation under this Section 2.12 for any costs
incurred or reductions suffered with respect to any date unless it shall have notified the relevant Borrower that it will demand compensation for such costs or reductions under paragraph (c)
above not more than 90 days after the later of (i) such date and (ii) the date on which it shall have become aware of such costs or reductions. Notwithstanding any other provision
of this Section 2.12, no Lender shall demand compensation for any increased cost or reduction referred to above if it shall not at the time be the general policy or practice of such Lender to
demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any. In the event any Borrower shall reimburse any Lender pursuant to this
Section 2.12 for any cost and such Lender shall subsequently receive a refund in respect thereof, such Lender shall so notify such Borrower and, upon its request, will pay to such Borrower the
portion of such refund which such Lender shall determine in good faith to be allocable to the cost so reimbursed. The covenants contained in this Section 2.12 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable hereunder. 

SECTION
2.13.    Indemnity.    Each Borrower agrees to indemnify each Lender against any loss or expense described below which such
Lender may sustain or incur as a consequence of (a) any failure by such Borrower to fulfill on the date of any borrowing hereunder the applicable conditions set forth in Article IV,
(b) any failure by such Borrower to borrow, continue or convert any Loan hereunder after irrevocable notice of such borrowing, continuation or conversion has been given or deemed given pursuant
to Article II, (c) any payment, prepayment or conversion of a Eurodollar Loan made to such Borrower required by any other provision of this Agreement or otherwise made or deemed made,
whatever the circumstances may be that give rise to such payment, prepayment or conversion, or any transfer of any such Loan pursuant to Section 2.18 or 9.4(b), on a date other than the last
day of the 

18

 

Interest Period applicable thereto, or (d) if any breakage is incurred, any failure by a Borrower to prepay a Eurodollar Loan on the date specified in a notice of prepayment;  provided, that any
request for indemnification made by any Lender to any Borrower pursuant hereto shall be accompanied by such Lender's calculation of
such amount to be indemnified. The loss or expense for which such Lender shall be indemnified under this Section 2.13 shall be equal to the excess, if any, as reasonably determined by such
Lender, of (i) its cost of obtaining the funds for the Loan being paid, prepaid, converted or not borrowed, continued, prepaid or converted (assumed to be the Eurodollar Rate in the case of
Eurodollar Loans) for the period from the date of such payment, prepayment, conversion or failure to borrow, continue, prepay or convert to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow, continue, prepay or convert, the Interest Period for such Loan which would have commenced on the date of such failure) over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender in reemploying the funds so paid, prepaid, converted or not borrowed, continued, prepaid or converted for such period or
Interest Period, as the case may be; provided, however, that such amount shall not include any loss of a Lender's margin or spread over its cost of
obtaining funds as described above. A certificate of any Lender setting forth any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.13 (with calculations in
reasonable detail) shall be delivered to the relevant Borrower and shall be conclusive absent manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder. 

SECTION
2.14.    Pro Rata Treatment; Funding Matters; Evidence of Debt.    (a) Except as required under Section 2.18,
each payment or prepayment of principal of any Loan, each payment of interest on the Loans, each payment of the Facility Fees pursuant to Section 2.6(a), and each reduction of the Commitments,
shall be allocated pro rata among the Lenders in accordance with their respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their outstanding Loans). Each Lender agrees that in computing such Lender's portion of any Loan to be made hereunder, the
Administrative Agent may, in its discretion, round such Lender's percentage of such Loan to the next higher or lower whole Dollar amount. 

(b)  Unless
the Administrative Agent shall have received notice from a Lender prior to the relevant borrowing date that such Lender will not make available to the Administrative Agent such
Lender's portion of a borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such borrowing in accordance with this
Agreement and the Administrative Agent may, in reliance upon such assumption, make available to the relevant Borrower on such date a corresponding amount. If and to the extent that such Lender shall
not have made such portion available to the Administrative Agent, each of such Lender and the relevant Borrower agrees to repay to the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is made available to such Borrower until the date such amount is repaid to the Administrative Agent at (i) in the
case of such Borrower, the interest rate applicable at the time to the relevant Loan and (ii) in the case of such Lender, the Federal Funds Effective Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute such Lender's Loan as part of such borrowing for the purposes of this Agreement;  provided, that such repayment shall not
release such Lender from any liability it may have to such Borrower for the failure to make such Loan at the
time required herein. 

(c)  The
failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). 

(d)  Each
Lender may at its option make any Eurodollar Loan by causing any domestic or foreign branch or Lender Affiliate of such Lender to make such Loan;  provided, that any exercise of such option shall not
affect the obligation of the relevant Borrower to repay such Loan in accordance with the terms of
this Agreement. 

19

 

(e)  Each
Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness to such Lender resulting from each Loan made by it from time to
time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Borrower with respect to each Loan, the Type of each Loan and each Interest Period, if any, applicable thereto, (ii) the amount of any
principal or interest due and payable
or to become due and payable from each Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from any Borrower and each Lender's share
thereof. The entries made in the accounts maintained pursuant to this paragraph (e) shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of any Borrower to repay the Loans in accordance with their terms. 

(f)    In
order to expedite the transactions contemplated by this Agreement, each Subsidiary Borrower shall be deemed, by its execution and delivery of a Subsidiary Borrower Request, to have
appointed Viacom to act as agent on behalf of such Subsidiary Borrower for the purpose of (a) giving any notices contemplated to be given by such Subsidiary Borrower pursuant to this Agreement,
including, without limitation, borrowing notices, prepayment notices, continuation notices, and conversion notices and (b) paying on behalf of such Subsidiary Borrower any Subsidiary Borrower
Obligations owing by such Subsidiary Borrower; provided, that each Subsidiary Borrower shall retain the right, in its discretion, to directly give any
or all of such notices or make any or all of such payments. 

(g)  The
Administrative Agent shall promptly notify the Lenders upon receipt of any Subsidiary Borrower Designation and Subsidiary Borrower Request. 

SECTION
2.15.    Sharing of Setoffs.    Except to the extent that this Agreement provides for payments to be allocated to Loans,
each Lender agrees that if it shall, through the exercise of a right of banker's lien, setoff or counterclaim against any Borrower, or pursuant to a secured claim under Section 506 of Title 11
of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means (other than pursuant to any provision of this Agreement), obtain payment (voluntary or involuntary) in respect of any category of its Loans as a result of which the
unpaid principal portion of such Loans shall be proportionately less than the unpaid principal portion of such Loans of any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in such Loans of such other Lender, so that the aggregate unpaid principal amount of
such Loans and participations in such Loans held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all such Loans then outstanding as the principal amount of
such Loans of each Lender prior to such exercise of banker's lien, setoff or counterclaim or other event was to the principal amount of all such Loans outstanding prior to such exercise of banker's
lien, setoff or counterclaim or other event; provided, however, that, if any such purchase or purchases or adjustments shall be made pursuant to this
Section 2.15 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest, unless the Lender from which such payment is recovered is required to pay interest thereon, in which case each Lender returning funds to such
Lender shall pay its pro rata share of such interest. Any Lender holding a participation in a Loan deemed to have been so purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by any Borrower to such Lender by reason thereof as fully as if such Lender had made a Loan directly such Borrower. 

SECTION
2.16.    Payments.    (a) Except as otherwise expressly provided herein, each Borrower shall make each payment
(including principal of or interest on any Loan or any Fees or other amounts) 

20

 

hereunder without setoff or counterclaim and shall make each such payment not later than 12:00 noon, New York City time, on the date when due in Dollars to the Administrative Agent at its offices at
JPMorgan Chase Bank, 270 Park Avenue, New York, New York 10017, in immediately available funds. 

(b)  Whenever
any payment (including principal of or interest on any Loan or any Fees or other amounts) hereunder shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or Fees, if applicable. 

SECTION
2.17.    Taxes.    (a) Any and all payments by each Borrower hereunder shall be made, in accordance with
Section 2.16, free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, charges, fees, deductions, charges or withholdings, and all liabilities
with respect thereto imposed by or on behalf of any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net
income taxes) imposed on the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent's or such Lender's having
executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document) (all such nonexcluded taxes, levies, imposts, duties, charges,
fees, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If any Borrower shall be required by law to deduct
any Taxes or Other Taxes from or in respect of any sum payable to any Agent or any Lender hereunder, (i) the sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section 2.17) such Agent or such Lender shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxing authority or
other Governmental Authority in accordance with applicable law. 

(b)  The
relevant Borrower agrees to pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. 

(c)  The
relevant Borrower will indemnify each Lender (or Transferee) and the Administrative Agent for the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
by the applicable jurisdiction on amounts payable under this Section 2.17) paid by such Lender (or Transferee) or the Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted by the relevant taxing authority or other
Governmental Authority. Such indemnification shall be made within 30 days after the date such Lender (or Transferee) or the Administrative Agent, as the case may be, makes written demand
therefor. 

(d)  Whenever
any Taxes or Other Taxes are payable by any Borrower, within 30 days thereafter such Borrower shall send to the Administrative Agent for its own account or for the
account of the relevant Lender, as the case may be, a certified copy of an official receipt received by such Borrower showing payment thereof (or other evidence of such payment reasonably satisfactory
to the Administrative Agent). 

(e)  Without
prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 2.17 shall survive the payment in full of
the principal of and interest on all Loans made hereunder and of all other amounts payable hereunder. 

(f)    Each
Lender (or Transferee) that is not a "United States Person" as defined in Section 7701(a)(30) of the Code (such Lender (or Transferee), a
"Non-U.S. Person") shall deliver to Viacom and the Administrative Agent (or, in the case of a participant, to the Lender from which the 

21

 

related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non-U.S. Person claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a
Form W-8BEN, or any subsequent versions thereof or successors thereto (and, if such Non-U.S. Person, claiming an exemption with respect to payments of "portfolio
interest", delivers a Form W-8BEN, an annual certificate representing that such Non-U.S. Person is not a "bank" for purposes of Section 881(c) of the Code, is not
a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of Viacom and is not a controlled foreign corporation related to Viacom (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such Non-U.S. Person claiming complete exemption from U.S. federal withholding tax on all payments by any
Borrower under this Agreement. Such forms shall be delivered by each Non-U.S. Person promptly after it becomes a party to this Agreement (or, in the case of any participant, promptly after
the date such participant purchases the related participation). In addition, each Non-U.S. Person shall deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Person. Each Non-U.S. Person shall promptly notify Viacom at any time it determines that it is no longer in a position to provide any
previously delivered certificate to Viacom (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Unless Viacom and the Administrative Agent (or, in the case of
a participant, the Lender from which the related participation shall have been purchased) have received forms or other documents satisfactory to them indicating that payments hereunder are not subject
to United States withholding tax, the relevant Borrower or the Administrative Agent shall withhold taxes from such payments at the applicable statutory rate in the case of payments of interest to or
for any Lender (or Transferee) that is a Non-U.S. Person. Notwithstanding any other provision of this Section 2.17(f), a Non-U.S. Person shall not be required to deliver
any form pursuant to this Section 2.17(f) that such Non-U.S. Person is not legally able to deliver by reason of the adoption of any law, rule or regulation, or any change in any
law, rule or regulation or in the interpretation thereof, in each case occurring after the date such Non-U.S. Person becomes a Lender (or Transferee). 

(g)  A
Lender that is entitled to an exemption from or reduction of any non-U.S. withholding tax under the law of the jurisdiction in which a Borrower is located, or under any
treaty to which such jurisdiction
is a party, with respect to payments under this Agreement shall deliver to such Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably
requested by such Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate,  provided
that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender's reasonable judgment such
completion, execution or submission would not materially prejudice the legal position of such Lender. 

(h)  No
Borrower shall be required to pay any additional amounts to any Agent or Lender pursuant to paragraph (a) above (i) if the obligation to pay such additional amounts
would not have arisen but for a failure by such Agent or Lender to comply with the provisions of paragraph (f) or (g) above or (ii) in the case of a Transferee, to the extent such
additional amounts exceed the additional amounts that would have been payable had no transfer or assignment to such Transferee occurred; provided,
however, that each Borrower shall be required to pay those amounts to any Agent or Lender (or Transferee) that it was required to pay hereunder prior to the failure of such
Agent or Lender (or Transferee) to comply with the provisions of such paragraph (f) or (g). 

22

   
SECTION 2.18.    Termination or Assignment of Commitments Under Certain Circumstances.    (a) Any Lender (or Transferee)
claiming any additional amounts payable pursuant to Section 2.12 or Section 2.17 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate
or document requested by any Borrower or to change the jurisdiction of its applicable lending office if the making of such a filing or change would avoid the need for or reduce the amount of any such
additional amounts which may thereafter accrue and would not, in the sole determination of such Lender (or Transferee), be otherwise disadvantageous to such Lender (or Transferee). 

(b)  In
the event that (x) any Lender shall have delivered a notice or certificate pursuant to Section 2.12, (y) any Borrower shall be required to make additional
payments to any Lender under Section 2.17, or (z) any Lender (a "Non-Consenting Lender") shall withhold its consent to any
amendment described in clause (i) or (ii) of Section 9.8(b) as to which consents have been obtained from Lenders having Total Facility Percentages aggregating at least 90%, Viacom
shall have the right, at its own expense, upon notice to such Lender (or Lenders) and the Administrative Agent, (i) to terminate the Commitments of such Lender (except in the case of
clause (z) above) or (ii) to require such Lender (or, in the case of clause (z) above, each Non-Consenting Lender) to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in Section 9.4) all its interests, rights and obligations under this Agreement to one or more other financial institutions acceptable
to Viacom (unless an Event of Default has occurred and is continuing) and the Administrative Agent, which approval in each case shall not be unreasonably withheld, which shall assume such obligations;  provided, that (w) in the case of any replacement of Non-Consenting Lenders, each assignee shall have consented to the relevant
amendment, (x) no such termination or assignment shall conflict with any law, rule or regulation or order of any Governmental Authority, (y) the Borrowers or the assignee (or assignees),
as the case may be, shall pay to each affected Lender in immediately available funds on the date of such termination or assignment the principal of and interest accrued to the date of payment on the
Loans made by it hereunder and all other amounts accrued for its account or owed to it hereunder and (z) Viacom may not terminate Commitments representing more than 10% of the original
aggregate Commitments pursuant to this paragraph (b). 

ARTICLE III

REPRESENTATIONS AND WARRANTIES  

Viacom hereby represents and warrants, and each Subsidiary Borrower by its execution and delivery of a Subsidiary Borrower Request represents and warrants (to the extent
specifically applicable to such Subsidiary Borrower), to each of the Lenders that: 

SECTION
3.1.    Corporate Existence.    Each of Viacom and each Material Subsidiary: (a) is a corporation, partnership or
other entity duly organized and validly existing under the laws of the jurisdiction of its organization; (b) has all requisite corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals, necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the failure to have any of the
foregoing would not result in a Material Adverse Effect; and (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would result in a Material Adverse Effect. 

SECTION
3.2.    Financial Condition.    The consolidated balance sheet of Viacom and its Consolidated Subsidiaries as at
December 31, 2001, and the related consolidated statements of income and cash flows of Viacom and its Consolidated Subsidiaries for the fiscal year ended on such date, with the opinion thereon
of PricewaterhouseCoopers LLC, heretofore furnished to each of the Lenders, fairly present the consolidated financial condition of Viacom and its Consolidated Subsidiaries as at such date and the
consolidated results of their operations for the fiscal year ended on such date in accordance 

23

 

with GAAP. Neither Viacom nor any of its Material Subsidiaries had on such date any known material contingent liability, except as referred to or reflected or provided for in the Exchange Act Report
or in such balance sheets (or the notes thereto) as at such date. 

SECTION
3.3.    Litigation.    Except as disclosed to the Lenders in the Exchange Act Report filed prior to the Closing Date or
otherwise disclosed in writing to the Lenders prior to the Closing Date, there are no legal or arbitral proceedings, or any proceedings by or before any Governmental Authority, pending or (to the
knowledge of Viacom) threatened against Viacom or any of its Material Subsidiaries which have resulted in a Material Adverse Effect (it being agreed that any legal or arbitral proceedings which have
been disclosed in the Exchange Act Report, whether threatened, pending, resulting in a judgment or otherwise, prior to the time a final judgment for the payment of money shall have been recorded
against Viacom or any Material Subsidiary by any Governmental Authority having jurisdiction, and the judgment is non-appealable (or the time for appeal has expired) and all stays of
execution have expired or been lifted shall not, in and of itself, be deemed to result in a Material Adverse Effect). The "Exchange Act Report" shall
mean, collectively, the Annual Report of Viacom on Form 10-K for the year ended December 31, 2001 and Quarterly Reports on Form 10-Q and Reports on
Form 8-K of Viacom filed subsequent to December 31, 2001, but on or before February 20, 2003, in each case as amended or supplemented on or before February 20,
2003. 

SECTION
3.4.    No Breach, etc.    None of the execution and delivery of this Agreement, the consummation of the transactions herein
contemplated and compliance with the terms and provisions hereof will conflict with or result in a breach of, or require any consent under, the charter or By-laws (or other equivalent
organizational documents) of any Borrower, or any applicable law or regulation, or any order, writ, injunction or decree of any Governmental Authority, or any material agreement or instrument to which
Viacom or any of its Material Subsidiaries is a party or by which any of them is bound or to which any of them is subject, or constitute a default under any such agreement or instrument, or result in
the creation or imposition of any Lien upon any of the revenues or assets of Viacom or any of its Material Subsidiaries pursuant to the terms of any such agreement or instrument.
Neither Viacom nor any of its Material Subsidiaries is in default under or with respect to any of its material contractual obligations in any respect which would have a Material Adverse Effect. 

SECTION
3.5.    Corporate Action.    Each Borrower has all necessary corporate power and authority to execute, deliver and perform
its obligations under this Agreement; the execution and delivery by each Borrower of this Agreement (or, in the case of each Subsidiary Borrower, the relevant Subsidiary Borrower Request), and the
performance by each Borrower of this Agreement, have been duly authorized by all necessary corporate action on such Borrower's part; this Agreement (or, in the case of each Subsidiary Borrower, the
relevant Subsidiary Borrower Request) has been duly and validly executed and delivered by each Borrower; and this Agreement constitutes a legal, valid and binding obligation of each Borrower,
enforceable in accordance with its terms except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general
applicability affecting the enforcement of creditors' rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law). 

SECTION
3.6.    Approvals.    No authorizations, approvals or consents of, and no filings or registrations with, any Governmental
Authority are necessary for the execution, delivery or performance by each Borrower of this Agreement or for the validity or enforceability hereof. 

SECTION
3.7.    ERISA.    Viacom and, to the best of its knowledge, its ERISA Affiliates have fulfilled their respective obligations
under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance in all material respects with the currently applicable provisions of 

24

 

ERISA and the Code except where any failure or non-compliance would not result in a Material Adverse Effect. 

SECTION
3.8.    Taxes.    Viacom and its Material Subsidiaries, to the knowledge of Viacom, have filed all United States Federal
income tax returns and all other material tax returns which are required to be filed by or in respect of them and have paid or caused to be paid all taxes shown as due on such returns or pursuant to
any assessment received by Viacom or any of its Material Subsidiaries, except those being contested and reserved against in accordance with Section 5.2. 

SECTION
3.9.    Investment Company Act.    No Borrower is an "investment company",
or a company "controlled" by an "investment company", subject to regulation under the Investment Company
Act of 1940, as amended. 

SECTION
3.10.    Environmental.    Except as in the aggregate would not have a Material Adverse Effect, neither Viacom nor any of
its Subsidiaries has received any notice of violation, alleged violation, non-compliance or liability regarding environmental matters or compliance with Environmental Laws
with regard to any of its or its Subsidiaries' Properties or business, nor does Viacom have any knowledge that any notice will be received or is being threatened. 

SECTION
3.11.    Material Subsidiaries.    The list of Material Subsidiaries set forth in the most recently issued
Form 10-K of Viacom is complete and correct in all material respects as of the date of the issuance of such Form 10-K. 

ARTICLE IV

CONDITIONS OF EFFECTIVENESS AND LENDING  

SECTION
4.1.    Effectiveness.    The effectiveness of this Agreement is subject to the satisfaction of the following conditions: 

(a)  Credit Agreement. The Administrative Agent shall have received this Agreement, executed and delivered by a duly authorized officer of
Viacom and Viacom International. 

(b)  Closing Certificate. The Administrative Agent shall have received a Closing Certificate, substantially in the form of Exhibit E,
of Viacom and Viacom International, with appropriate insertions and attachments. 

(c)  Termination of Existing Credit Agreement. The Existing Credit Agreement shall have been paid in full and all obligations thereunder
shall have been terminated. 

(d)  Opinion of Counsel. The Administrative Agent shall have received an opinion of the general counsel of Viacom and Viacom International
in form and substance satisfactory to the Administrative Agent and customary for transactions of this type. 

SECTION
4.2.    Initial Loans to Subsidiary Borrowers.    The obligation of each Lender to make its initial Loan to a particular
Subsidiary Borrower, if designated as such after the Closing Date, is subject to the satisfaction of the conditions that (a) Viacom shall have delivered to the Administrative Agent a Subsidiary
Borrower Designation for such Subsidiary Borrower and (b) such Subsidiary Borrower shall have furnished to the Administrative Agent (i) a Subsidiary Borrower Request, (ii) a
Closing Certificate of such Subsidiary Borrower, with appropriate insertions and attachments and (iii) one or more
executed legal opinions with respect to such Subsidiary Borrower, in form and substance reasonably satisfactory to the Administrative Agent. Viacom may from time to time deliver a subsequent
Subsidiary Borrower Designation with respect to any Subsidiary Borrower, countersigned by such 

25

 

Subsidiary Borrower, for the purpose of terminating such Subsidiary Borrower's designation as such, so long as, on the effective date of such termination, all Subsidiary Borrower Obligations in
respect of such Subsidiary Borrower shall have been paid in full. In addition, if on any date a Subsidiary Borrower shall cease to be a Subsidiary, all Subsidiary Borrower Obligations in respect of
such Subsidiary Borrower shall automatically become due and payable on such date and no further Loans may be borrowed by such Subsidiary Borrower hereunder. 

SECTION
4.3.    All Credit Events.    The obligation of each Lender to make each Loan are subject to the satisfaction of the
following conditions: 

(a)  The
Administrative Agent shall have received a request for, or notice of, such Credit Event if and as required by Section 2.3; 

(b)  Each
of the representations and warranties made by Viacom and, in the case of a borrowing by a Subsidiary Borrower, by such Subsidiary Borrower, in Sections 3.1, 3.2, 3.4, 3.5 and 3.6
shall be true and correct in all material respects on and as of the date of such Credit Event with the same effect as though made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; 

(c)  At
the time of and immediately after giving effect to such Credit Event no Default or Event of Default shall have occurred and be continuing; and 

(d)  After
giving effect to such Credit Event, (i) the Outstanding Extensions of Credit of each Lender shall not exceed such Lender's Commitment then in effect and (ii) the
Total Facility Exposure shall not exceed the Total Commitment then in effect. 

Each
Credit Event shall be deemed to constitute a representation and warranty by Viacom on the date of such Credit Event as to the matters specified in paragraphs (b) and (c) of this
Section 4.3. 

ARTICLE V

COVENANTS  

Viacom covenants and agrees with each Lender that, as long as the Commitments shall be in effect or the principal of or interest on any Loan shall be unpaid, unless the
Required Lenders shall otherwise consent in writing: 

SECTION
5.1.    Financial Statements.    Viacom shall deliver to each of the Lenders: 

(a)  within
60 days after the end of each of the first three quarterly fiscal periods of each fiscal year of Viacom, consolidated statements of income and cash flows of Viacom and
its Consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated balance sheet as at the end of
such period, setting forth in each case in comparative form the corresponding consolidated figures for the corresponding period in the preceding fiscal year, accompanied by a certificate of a
Financial Officer of Viacom which certificate shall state that such financial statements fairly present the consolidated financial condition and results of operations of Viacom and its Consolidated
Subsidiaries in accordance with GAAP as at the end of, and for, such period, subject to normal year-end audit adjustments; provided, that
the requirement herein for the furnishing of such quarterly financial statements may be fulfilled by providing to the Lenders the report of Viacom to the SEC on Form 10-Q for the
applicable quarterly period, accompanied by the officer's certificate described in the last sentence of this Section 5.1; 

26

 

(b)  within
120 days after the end of each fiscal year of Viacom, consolidated statements of income and cash flows of Viacom and its Consolidated Subsidiaries for such year and the
related consolidated balance sheet as at the end of such year, setting forth in comparative form the corresponding consolidated figures for the preceding fiscal year, and accompanied by an opinion
thereon (unqualified as to the scope of the audit) of independent certified public accountants of recognized national standing, which opinion shall state that such consolidated financial statements
fairly present the consolidated financial condition and results of operations of Viacom and its Consolidated Subsidiaries as at the end of, and for, such fiscal year;  provided, that the requirement
herein for the furnishing of annual financial statements may be fulfilled by providing to the Lenders the report of
Viacom to the SEC on Form 10-K for the applicable fiscal year; 

(c)  promptly
upon their becoming publicly available, copies of all registration statements and regular periodic reports (including without limitation any and all reports on
Form 8-K), if any, which Viacom or any of its Subsidiaries shall have filed with the SEC or any national securities exchange; 

(d)  promptly
upon the mailing thereof to the shareholders of Viacom generally, copies of all financial statements, reports and proxy statements so mailed; 

(e)  within
30 days after a Responsible Officer of Viacom knows or has reason to believe that any of the events or conditions specified below with respect to any Plan or
Multiemployer Plan have occurred or exist which would reasonably be expected to result in a Material Adverse Effect, a statement signed by a senior financial officer of Viacom setting forth details
respecting such event or condition and the action, if any, which Viacom or its ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by Viacom or an ERISA Affiliate with respect to such event or condition): 

	(i)
	any
reportable event, as defined in Section 4043(b) of ERISA and the regulations issued thereunder, with respect to a Plan, as to which PBGC has
not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event;
provided, that a failure to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA shall be a reportable event regardless of the
issuance of any waiver in accordance with Section 412(d) of the Code;

	(ii)
	the
filing under Section 4041 of ERISA of a notice of intent to terminate any Plan or the termination of any Plan;

	(iii)
	the
institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by Viacom or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan;

	(iv)
	the
complete or partial withdrawal by Viacom or any ERISA Affiliate under Section 4201 or 4204 of ERISA from a Multiemployer Plan, or the receipt
by Viacom or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;

	(v)
	the
institution of a proceeding by a fiduciary of any Multiemployer Plan against Viacom or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days; and 

27

 

	(vi)
	a
failure to make a required installment or other payment with respect to a Plan (within the meaning of Section 412(n) of the Code), in which
case the notice required hereunder shall be provided within 10 days after the due date for filing notice of such failure with the PBGC; 

(f)    promptly
after a Responsible Officer of Viacom knows or has reason to believe that any Default or Event of Default has occurred, a notice of such Default or Event of Default
describing it in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that Viacom has taken and proposes to take with respect thereto; 

(g)  promptly
after a Responsible Officer of Viacom knows that any change has occurred in Viacom's Debt Rating by either Rating Agency, a notice describing such change; and 

(h)  promptly
from time to time such other information regarding the financial condition, operations or business of Viacom or any of its Subsidiaries (including, without limitation, any
Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA) as any Lender through the Administrative Agent may reasonably request. Viacom will furnish to the
Administrative Agent and each Lender, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate (which may be a copy in the case of
each Lender) of a Financial Officer of Viacom (a "Compliance Certificate") (i) to the effect that no Default or Event of Default has occurred and
is continuing (or, if any Default or Event of Default has occurred and is continuing, describing it in reasonable detail and describing the action that Viacom has taken and proposes to take with
respect thereto), and (ii) setting forth in reasonable detail the computations (including any pro forma calculations as described in
Section 1.2(c)) necessary to determine whether Viacom is in compliance with the Financial Covenant as of the end of the respective quarterly fiscal period or fiscal year. Each Lender hereby
agrees that Viacom may, in its discretion, provide any notice, report or other information to be provided pursuant to this Section 5.1 to such Lender by (i) electronic mail to the
electronic mail address provided by such Lender and/or (ii) through access to a web site, including, without limitation, www.sec.gov. 

SECTION
5.2.    Corporate Existence, Etc.    Viacom will, and will cause each of its Material Subsidiaries to, preserve and maintain
its legal existence and all of its material rights, privileges and franchises (provided that (a) nothing in this Section 5.2 shall
prohibit any transaction expressly permitted under Section 5.4, (b) the corporate existence of any Subsidiary (other than a Subsidiary Borrower or Viacom International) may be terminated
if, in the good faith judgment of the board of directors or the chief financial officer of Viacom, such termination is in the best interests of Viacom and such termination would not have a Material
Adverse Effect), and (c)Viacom or such Material Subsidiary shall not be required to preserve or maintain any such right, privilege or franchise if the board of directors of Viacom or such Material
Subsidiary, as the case may be, shall determine that the preservation or maintenance thereof is no longer desirable in the conduct of the business of Viacom or such Material Subsidiary, as the case
may be); comply with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without limitation, all Environmental Laws) and with all contractual
obligations if failure to comply with such requirements or obligations would reasonably be expected to result in a Material Adverse Effect; pay and discharge all material taxes, assessments,
governmental charges, levies or other obligations of whatever nature imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for
any such tax, assessment, charge, levy or other obligation the payment of which is being
contested in good faith and by proper proceedings and against which adequate reserves are being maintained; maintain all its Property used or useful in its business in good working order and
condition, ordinary wear and tear excepted, all as in the judgment of Viacom or such Material Subsidiary may be necessary so that the business carried on in connection therewith may be properly and
advantageously conducted at all times (provided that Viacom or such Material Subsidiary shall not be required to maintain any such Property if the
failure to maintain any such Property is, in the 

28

 

judgment of Viacom or such Material Subsidiary, desirable in the conduct of the business of Viacom or such Material Subsidiary); keep proper books of records and accounts in which entries that are
full, true and correct in all material respects shall be made in conformity with GAAP; and permit representatives of any Lender, during normal business hours upon reasonable advance notice, to inspect
any of its books and records and to discuss its business and affairs with its Financial Officers or their designees, all to the extent reasonably requested by such Lender. 

SECTION
5.3.    Insurance.    Viacom will, and will cause each of its Material Subsidiaries to, keep insured by financially sound
and reputable insurers all Property of a character usually insured by corporations engaged in the same or similar business and similarly situated against loss or damage of the kinds and in the amounts
consistent with prudent business practice and carry such other insurance as is consistent with prudent business practice (it being understood that self-insurance shall be permitted to the
extent consistent with prudent business practice). 

SECTION
5.4.    Prohibition of Fundamental Changes.    Viacom will not, and will not permit any of its Material Subsidiaries to
(i) enter into any transaction of merger, consolidation, liquidation or dissolution or (ii) Dispose of, in one transaction or a series of related transactions, all or a substantial part
of the consolidated assets of Viacom and its Subsidiaries taken as a whole, whether now owned or hereafter acquired (excluding (x) financings by way of sales of receivables or inventory,
(y) inventory or other Property Disposed of in the ordinary course of business and (z) obsolete or worn-out Property, tools or equipments no longer used or useful in its
business). Notwithstanding the foregoing provisions of this Section 5.4: 

(a)  Viacom
may consummate the Blockbuster Event; 

(b)  any
Subsidiary of Viacom may be merged or consolidated with or into: (i) Viacom if Viacom shall be the continuing or surviving corporation or (ii) any other such
Subsidiary; provided, that (x) if any such transaction shall be between a Subsidiary and a Wholly Owned Subsidiary, such Wholly Owned Subsidiary
shall be the continuing or surviving corporation and (y) if any such transaction shall be between a Subsidiary and a Subsidiary Borrower, the continuing or surviving corporation shall be a
Subsidiary Borrower; 

(c)  any
Subsidiary of Viacom may distribute, dividend or Dispose of any of or all its Property (upon voluntary liquidation or otherwise) to Viacom or a Wholly Owned Subsidiary of Viacom; 

(d)  Viacom
may merge or consolidate with or into any other Person (including, without limitation, Viacom International) if (i) either (x) Viacom is the continuing or
surviving corporation or (y) the corporation formed by such consolidation or into which Viacom is merged shall be a corporation organized under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume the obligations of Viacom hereunder pursuant to a written agreement and shall have delivered to the Administrative Agent such
agreement and a certificate of a Responsible Officer and an opinion of counsel to the effect that such merger or consolidation complies with this Section 5.4(d), and (ii) after giving
effect thereto and to any repayment of Loans to be made upon consummation thereof (it being expressly understood that no repayment of Loans is required solely by virtue thereof), no Default or Event
of Default shall have occurred and be continuing; 

(e)  any
Subsidiary of Viacom may merge or consolidate with or into any other Person if, after giving effect thereto and to any repayment of Loans to be made upon the consummation thereof
(it being expressly understood that, except as otherwise expressly provided in Section 4.2 with respect to Subsidiary Borrowers, no repayment of Loans is required solely by virtue thereof), no
Default or Event of Default shall have occurred and be continuing; and 

29

 

(f)    Viacom
or any Subsidiary of Viacom may Dispose of its Property if, after giving effect thereto and to any repayment of Loans to be made upon the consummation thereof (it being
expressly understood that, except as otherwise expressly provided in Section 4.2 with respect to Subsidiary Borrowers, no repayment of Loans is required solely by virtue thereof), no Default or
Event of Default shall have occurred and be continuing. 

SECTION
5.5.    Limitation on Liens.    Viacom shall not, directly or indirectly, create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien upon or with respect to any of its Properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income, in each case to secure or provide for the payment of any Indebtedness of any Person, except: 

(a)  Purchase
money Liens or purchase money security interests upon or in any Property acquired or held by Viacom or any Subsidiary of Viacom in the ordinary course of business to secure
the purchase price of such Property or to secure Indebtedness incurred solely for the purpose of financing the acquisition of such Property; 

(b)  Liens
existing on Property at the time of its acquisition (other than any such Lien created in contemplation of such acquisition); 

(c)  Liens
on Property of Persons which become or became Subsidiaries securing Indebtedness existing, with respect to any such Person, on the date such Person becomes or became a
Subsidiary (other than any such Lien created in contemplation of such Person becoming a Subsidiary); 

(d)  Liens
securing Indebtedness incurred by Viacom or any Subsidiary of Viacom; provided,  however, that the aggregate principal amount of Indebtedness referred to in
this clause (d) secured by Liens shall not exceed $30,000,000 at any
time outstanding; and 

(e)  any
Lien securing the renewal, extension or refunding of any Indebtedness secured by any Lien permitted by clause (a), (b), (c) or (d) above that does not extend
to Indebtedness other than that which is being renewed, extended or refunded. 

SECTION
5.6.    Limitation on Subsidiary Indebtedness.    Viacom will not permit any of its Subsidiaries to create, incur, assume or
suffer to exist any Indebtedness (which includes, for the purposes of this Section 5.6, any preferred stock), except: 

(a)  Indebtedness
of any Person which is acquired by Viacom or any of its Subsidiaries after the Closing Date, which Indebtedness was outstanding prior to the date of acquisition of such
Person and was not created in anticipation thereof; 

(b)  any
Indebtedness owing by Viacom or any of its Subsidiaries to Viacom or any of its Subsidiaries (including any intercompany Indebtedness created by the declaration of a note payable
dividend by any Subsidiary to Viacom or any of its other Subsidiaries); 

(c)  Indebtedness
(including backed-up commercial paper) of any Subsidiary Borrower or Viacom International under this Agreement; 

(d)  Indebtedness
(including backed-up commercial paper) existing at any time under the Five-Year Credit Agreement or under the Amended and Restated Infinity Credit
Agreement; 

(e)  Indebtedness
outstanding on the Closing Date, with such Indebtedness outstanding as of September 30, 2002 being set forth on Schedule 5.6; 

30

 

(f)    any
replacement, renewal, refinancing or extension of any Indebtedness permitted by Section 5.6(a) through (d) or set forth on Schedule 5.6 that does not exceed
the aggregate principal amount (plus associated fees and expenses) of the Indebtedness being replaced, renewed, refinanced or extended (except that accrued and unpaid interest may be part of any
refinancing); and 

(g)  Indebtedness
incurred after the Closing Date; provided, that after giving effect thereto the aggregate principal amount of Indebtedness
incurred pursuant to this paragraph (g) that is outstanding on such date (it being understood that, for the purposes of this paragraph (g), the term "Indebtedness" does not include
Indebtedness excepted by any of clauses (a) through (f) inclusive) does not exceed the greater of (i) an aggregate principal amount in excess of 5% of Consolidated Tangible Assets
(measured by reference to the then latest financial statements delivered pursuant to Section 5.1(a) or (b), as applicable) and (ii) $800,000,000 at any time. 

SECTION
5.7.    Consolidated Coverage Ratio.    Viacom will not permit the Consolidated Coverage Ratio for any period of four
consecutive fiscal quarters to be less than 3.00 to 1.00. 

SECTION
5.8.    Use of Proceeds.    On and after the Closing Date, each Borrower will use the proceeds of the Loans solely for
general corporate purposes, including, without limitation, acquisitions and commercial paper backup (in each case in compliance with all applicable legal and regulatory requirements, including,
without limitation, Regulation U and the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the regulations thereunder);  provided, that neither any Agent
nor any Lender shall have any responsibility as to the use of any of such proceeds.
 

SECTION
5.9.    Transactions with Affiliates.    Excepting transactions directly or indirectly entered into pursuant to any
agreement entered into prior to the Closing Date, or transactions contemplated by any agreement directly or indirectly entered into prior to the Closing Date, Viacom will not, and will not permit any
of its Material Subsidiaries to, directly or indirectly enter into any material transaction with any Affiliate of Viacom except on terms at least as favorable to Viacom or such Subsidiary as it could
obtain on an arm's-length basis. 

31

   ARTICLE VI

EVENTS OF DEFAULT  

In case of the happening of any of the following events ("Events of Default"): 

(a)  (i) any
Borrower shall default in the payment when due of any principal of any Loan or (ii) any Borrower shall default in the payment when due of any interest on any
Loan, any Fee or any other amount payable by it hereunder and, in the case of this clause (ii), such default shall continue unremedied for a period of five Business Days; 

(b)  any
representation, warranty or certification made or deemed made herein (or in any modification or supplement hereto) by any Borrower, or any certificate furnished to any Lender or
the Administrative Agent pursuant to the provisions hereof, shall prove to have been false or misleading in any material respect as of the time made, deemed made or furnished; 

(c)  (i) Viacom
shall default in the performance of any of its obligations under Sections 5.7 or 5.8, (ii) Viacom shall default in the performance of any of its obligations
under Section 5.4 and, in the case of this clause (ii), such default shall continue unremedied for a period of 5 days after notice thereof to Viacom by the Administrative Agent or
the Required Lenders (through the Administrative Agent) or (iii) Viacom shall default in the performance of any of its other obligations under this Agreement and, in the case of this
clause (iii), such default shall continue unremedied for a period of 15 days after notice thereof to Viacom by the Administrative Agent or the Required Lenders (through the
Administrative Agent); 

(d)  Viacom
or any of its Subsidiaries shall (i) fail to pay at final maturity any Indebtedness in an aggregate amount in excess of $250,000,000, or (ii) fail to make any
payment (whether of principal, interest or otherwise), regardless of amount, due in respect of, or fail to observe or perform any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing, any such Indebtedness, in excess of $250,000,000 if the effect of any failure referred to in this clause (ii) has caused such Indebtedness to
become due prior to its stated maturity (it being agreed that for purposes of this paragraph (d) only, the term "Indebtedness" shall include
obligations under any interest rate protection agreement, foreign currency exchange agreement or other interest or exchange rate hedging agreement and that the amount of any Person's obligations under
any such agreement
shall be the net amount that such Person could be required to pay as a result of a termination thereof by reason of a default thereunder); 

(e)  Viacom
or any of its Material Subsidiaries shall admit in writing its inability, or be generally unable, to pay its debts as such debts become due; 

(f)  Viacom
or any of its Material Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, trustee or liquidator of itself or
of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect), (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or
(vi) take any corporate action for the purpose of effecting any of the foregoing; 

(g)  a
proceeding or a case shall be commenced, without the application or consent of Viacom or any of its Material Subsidiaries, in any court of competent jurisdiction, seeking
(i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of Viacom or such Material Subsidiary or of all or any substantial part of its assets or (iii) similar relief in respect of Viacom or such Material Subsidiary under any
law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue 

32

 

unstayed and in effect, for a period of 60 or more days; or an order for relief against Viacom or such Material Subsidiary shall be entered in an involuntary case under the Bankruptcy Code; 

(h)  subject
to Schedule VI(h), a final judgment or judgments for the payment of money in excess of $250,000,000 in the aggregate shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against Viacom and/or any of its Material Subsidiaries and the same shall not be paid or discharged (or provision shall not be made for
such discharge), or a stay of execution thereof shall not be procured, within 60 days from the date of entry thereof and Viacom or the relevant Material Subsidiary shall not, within said period
of 60 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; 

(i)  an
event or condition specified in Section 5.1(e) shall occur or exist with respect to any Plan or Multiemployer Plan and, as a result of such event or condition, together with
all other such events or conditions, Viacom or any ERISA Affiliate shall incur or shall be reasonably likely to incur a liability to a Plan, a Multiemployer Plan or PBGC (or any combination of the
foregoing) which would constitute a Material Adverse Effect; or 

(j)  The
guarantee (i) by Viacom contained in Section 8.1 shall cease, for any reason, to be in full force and effect or Viacom shall so assert or (ii) by Viacom
International contained in Section 8.2 shall cease, for any reason except pursuant to Section 8.2(g), to be in full force and effect or Viacom International shall so assert; 

then
and in every such event (other than an event with respect to Viacom described in paragraph (f) or (g) above), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to Viacom, take any or all of the following actions, at the same or different times: (I) terminate
forthwith the Commitments and (II) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of each Borrower accrued hereunder, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby expressly waived by each Borrower, anything contained herein to the contrary notwithstanding; and in any event with respect to
any Borrower described in paragraph (f) or (g) above, (A) if such Borrower is Viacom, the Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of each Borrower accrued hereunder, shall automatically become due and payable and
(B) if such Borrower is a Subsidiary Borrower, the principal of the Loans made to such Subsidiary Borrower then outstanding, together with accrued interest thereon and all other liabilities of
such Subsidiary Borrower accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or any other notice of any kind, all of which are hereby
expressly waived by each Borrower, anything contained herein to the contrary notwithstanding. 

ARTICLE VII

THE AGENTS  

In order to expedite the transactions contemplated by this Agreement, each Agent is hereby appointed to act as Agent on behalf of the Lenders. Each of the Lenders hereby
irrevocably authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are specifically delegated to the Administrative Agent by the terms and provisions
hereof, together with such actions and powers as are reasonably incidental thereto. The Administrative Agent is hereby expressly authorized by the Lenders, without hereby limiting any implied
authority (a) to receive on behalf of the Lenders all payments of principal of and interest on the Loans and all other amounts due to the Lenders hereunder, and promptly to distribute to each
Lender its proper share of each payment so received, (b) to give notice on behalf of each of the Lenders to the Borrowers of any Event of Default 

33

 

specified in this Agreement of which the Administrative Agent has actual knowledge acquired in connection with its agency hereunder and (c) to distribute to each Lender copies of all notices,
financial statements and other materials delivered by any Borrower pursuant to this Agreement as received by the Administrative Agent. 

Neither
any Agent nor any of its directors, officers, employees or agents shall be liable as such for any action taken or omitted by any of them except for its or his own gross negligence or willful
misconduct, or be responsible for any statement, warranty or representation herein or the contents of any document delivered in connection herewith, or be required to ascertain or to make any inquiry
concerning the performance or observance by any Borrower of any of the terms, conditions, covenants or agreements contained in this Agreement. The Agents shall not be responsible to the Lenders for
the due execution, genuineness, validity, enforceability or effectiveness of this Agreement or other instruments or agreements. The Administrative Agent shall in all cases be fully protected in
acting, or refraining from acting, in accordance with written instructions signed by the Required Lenders (or, when expressly required hereby, all the Lenders) and, except as otherwise specifically
provided herein, such instructions and any action or inaction pursuant thereto shall be binding on all the Lenders. The Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to be genuine and correct and to have been signed or sent by the proper Person or Persons. Neither the Agents nor any of
their directors, officers, employees or agents shall have any responsibility to any Borrower on account of the failure of or delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance or breach by any other Agent, any other Lender or any Borrower of any of their respective obligations hereunder or in
connection herewith. The Administrative Agent may execute any and all duties hereunder by or through agents or employees and shall be entitled to rely upon the advice of legal counsel selected by it
with respect to all matters arising hereunder and shall not be liable for any action taken or suffered in good faith by it in accordance with the advice of such counsel. 

The
Lenders hereby acknowledge that the Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it
shall be requested in writing to do so by the Required Lenders. 

Subject
to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by notifying the Lenders and the Borrowers. Upon any
such resignation, the Required Lenders shall have the right to appoint from the Lenders a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint from the
Lenders a successor Administrative Agent which shall be a bank with an office in New York, New York, having a combined capital and surplus of at least $500,000,000 or an affiliate of any such bank,
which successor shall be acceptable to Viacom (such acceptance not to be unreasonably withheld). Upon the acceptance of any appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. After the Administrative Agent's resignation hereunder, the provisions of this Article and Section 9.5 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as Administrative Agent. 

With
respect to the Loans made by them hereunder, the Agents in their individual capacity and not as Agents shall have the same rights and powers as any other Lender and may exercise the same as
though they were not Agents, and the Agents and their affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Borrowers or any of their respective Subsidiaries or any Affiliate thereof as if they were not Agents. 

34

 

Each
Lender agrees (i) to reimburse the Administrative Agent in the amount of its pro rata share (based on its Total Facility Percentage or,
after the date on which the Loans shall have been paid in full, based on its Total Facility Percentage immediately prior to such date) of any reasonable, out-of-pocket expenses
incurred for the benefit of the Lenders by the Administrative Agent, including reasonable counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders,
which shall not have been reimbursed by or on behalf of any Borrower and (ii) to indemnify and hold harmless the Administrative Agent and any of its directors, officers, employees or agents, in
the amount of such pro rata share, from and against any and all liabilities, taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against it in its capacity as Administrative Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by it under this Agreement, to the extent the same shall not have been reimbursed by or on behalf of Viacom;  provided, that no Lender shall be liable
to the Administrative Agent or any such director, officer, employee or agent for any portion of such
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative
Agent or any of its directors, officers, employees or agents. 

Each
Lender acknowledges that it has, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder. 

Neither
the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers nor any managing agent shall have any duties or responsibilities hereunder in its capacity as such. 

ARTICLE VIII

GUARANTEES  

SECTION
8.1.    Viacom Guarantee.    (a) Guarantee. In order to induce the
Administrative Agent and the Lenders to become bound by this Agreement and to make the Loans hereunder to the Subsidiary Borrowers, and in consideration thereof, Viacom hereby unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, to the Administrative Agent, for the ratable benefit of the Lenders, the prompt and complete payment and performance by each
Subsidiary Borrower when due (whether at stated maturity, by acceleration or otherwise) of the Subsidiary Borrower Obligations, and Viacom further agrees to pay any and all expenses (including,
without limitation, all reasonable fees, charges and disbursements of counsel) which may be paid or incurred by the Administrative Agent or by the Lenders in enforcing, or obtaining advice of counsel
in respect of, any of their rights under the guarantee contained in this Section 8.1(a). The guarantee contained in this Section 8.1(a), subject to Section 8.1(e), shall remain in
full force and effect until the Subsidiary Borrower Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto any Subsidiary Borrower may be
free from any Subsidiary Borrower Obligations. Viacom agrees that whenever, at any time, or from time to time, it shall make any payment to the Administrative Agent or any Lender on account of its
liability under this Section 8.1, it will notify the Administrative Agent and such Lender in writing that such payment is made under the guarantee contained in this Section 8.1 for such
purpose. No payment or payments made by any Subsidiary Borrower or any other Person or received or collected by the Administrative Agent or any Lender from any Subsidiary Borrower or any other Person
by virtue of any action or proceeding or any setoff or appropriation or application, at any time or from time to time, in reduction of or in payment of the Subsidiary Borrower Obligations shall 

35

 

be deemed to modify, reduce, release or otherwise affect the liability of Viacom under this Section 8.1 which, notwithstanding any such payment or payments, shall remain liable for the unpaid
and outstanding Subsidiary Borrower Obligations until, subject to Section 8.1(e), the Subsidiary Borrower Obligations are paid in full and the Commitments are terminated. Notwithstanding any
other provision herein, the maximum liability of Viacom under this Section 8.1 shall in no event exceed the amount which can be guaranteed by Viacom under applicable law. 

(b)  No Subrogation, etc. Notwithstanding any payment or payments made by Viacom hereunder, or any setoff or application of funds of Viacom
by the Administrative Agent or any Lender, Viacom shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against any Subsidiary Borrower or against any
collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Subsidiary Borrower Obligations, nor shall Viacom seek or be entitled to seek
any contribution, reimbursement, exoneration or indemnity from or against any Subsidiary Borrower in respect of payments made by Viacom hereunder, until all amounts owing to the Administrative Agent
and the Lenders by the Subsidiary Borrowers on account of the Subsidiary Borrower Obligations are paid in full and the Commitments are terminated. So long as the Subsidiary Borrower Obligations remain
outstanding, if any amount shall be paid by or on behalf of any Subsidiary Borrower or any other Person to Viacom on account of any of the rights waived in this Section 8.1, such amount shall
be held by Viacom in trust, segregated from other funds of Viacom, and shall, forthwith upon receipt by Viacom, be turned over to the Administrative Agent in the exact form received by Viacom (duly
indorsed by Viacom to the Administrative Agent, if required), to be applied against the Subsidiary Borrower Obligations, whether matured or unmatured, in such order as the Administrative Agent may
determine. 

(c)  Amendments, etc. with respect to the Subsidiary Borrower Obligations. Viacom shall remain obligated under this Section 8.1
notwithstanding that, without any reservation of rights against Viacom, and without notice to or further assent by Viacom, any demand for payment of or reduction in the principal
amount of any of the Subsidiary Borrower Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender, and any of the Subsidiary Borrower
Obligations continued, and the Subsidiary Borrower Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and this Agreement and any other documents executed and delivered in connection herewith may be amended, modified, supplemented or terminated, in whole or in part, as the Required Lenders (or
all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the
payment of the Subsidiary Borrower Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any Lender shall have any obligation to protect, secure,
perfect or insure any lien at any time held by it as security for the Subsidiary Borrower Obligations or for the guarantee contained in this Section 8.1 or any property subject thereto. 

(d)  Guarantee Absolute and Unconditional. Viacom waives any and all notice of the creation, renewal, extension or accrual of any of the
Subsidiary Borrower Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon the guarantee contained in this Section 8.1 or acceptance of the guarantee
contained in this Section 8.1; the Subsidiary Borrower Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 8.1; and all dealings between Viacom or the Subsidiary Borrowers, on the one hand, and the Administrative Agent and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 8.1. Viacom waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon Viacom or any Subsidiary Borrower with respect to the Subsidiary Borrower Obligations. The guarantee contained in this 

36

 

Section 8.1 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of this Agreement, any of the
Subsidiary Borrower Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) the legality under applicable requirements of law of repayment by the relevant Subsidiary Borrower of any Subsidiary Borrower Obligations or the adoption of any requirement of law
purporting to render any Subsidiary Borrower Obligations null and void, (c) any defense, setoff or counterclaim (other than a defense of payment or performance by the applicable Subsidiary
Borrower) which may at any time be available to or be asserted by Viacom against the Administrative Agent or any Lender, or (d) any other circumstance whatsoever (with or without notice to or
knowledge of Viacom or any Subsidiary Borrower) which constitutes, or might be construed to constitute, an equitable or legal discharge of any Subsidiary Borrower for any of its Subsidiary Borrower
Obligations, or of Viacom under the guarantee contained in this Section 8.1, in bankruptcy or in any other instance. When the Administrative Agent or any Lender is pursuing its rights and
remedies under this Section 8.1 against Viacom, the Administrative Agent or any Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have against any
Subsidiary Borrower or any other Person or against any collateral security or guarantee for the Subsidiary Borrower Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to pursue such other rights or remedies or to collect any payments from any Subsidiary Borrower or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of any Subsidiary Borrower or any such other Person or of any such collateral security, guarantee or right of offset,
shall not relieve Viacom of any liability under this Section 8.1, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the Administrative Agent and the Lenders against Viacom. 

(e)  Reinstatement. The guarantee contained in this Section 8.1 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Subsidiary Borrower Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any Subsidiary Borrower or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, any Subsidiary Borrower or any substantial part of its property, or otherwise, all as though such payments had not been made. 

(f)  Payments. Viacom hereby agrees that any payments in respect of the Subsidiary Borrower Obligations pursuant to this Section 8.1
will be paid to the Administrative Agent without setoff or counterclaim in Dollars at the office of the Administrative Agent specified in Section 9.1. 

SECTION
8.2.    Viacom International Guarantee.    (a) Guarantee. In order
to induce the Administrative Agent and the Lenders to become bound by this Agreement and to make the Loans hereunder to Viacom, and in consideration thereof, Viacom International hereby
unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, to the Administrative Agent, for the ratable benefit of the Lenders, the prompt and complete payment and
performance by Viacom when due (whether at stated maturity, by acceleration or otherwise) of the Viacom Obligations, and Viacom International further agrees to pay any and all expenses (including,
without limitation, all reasonable fees, charges and disbursements of counsel) which may be paid or incurred by the Administrative Agent or by the Lenders in enforcing, or obtaining advice of counsel
in respect of, any of their rights under the guarantee contained in this Section 8.2(a). The guarantee contained in this Section 8.2(a), subject to Section 8.2(e), shall remain in
full force and effect until the Viacom Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto Viacom may be free from any Viacom
Obligations. Viacom International agrees that whenever, at any time, or from time to time, it shall make any payment to the Administrative Agent or any Lender on account of its liability under this
Section 8.2, it will notify the Administrative Agent and such Lender in writing that such payment is made under the guarantee contained in this Section 8.2 for 

37

 

such purpose. No payment or payments made by Viacom or any other Person or received or collected by the Administrative Agent or any Lender from Viacom or any other Person by virtue of any action or
proceeding or any setoff or appropriation or application, at any time or from time to time, in reduction of or in payment of the Viacom Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of Viacom International under this Section 8.2 which, notwithstanding any such payment or payments, shall remain liable for the unpaid and outstanding Viacom
Obligations until, subject to Section 8.2(e), the Viacom Obligations are paid in full and the Commitments are terminated. Notwithstanding any other provision herein, the maximum liability of
Viacom International under this Section 8.2 shall in no event exceed the amount which can be guaranteed by Viacom International under applicable law. 

(b)  No Subrogation, etc. Notwithstanding any payment or payments made by Viacom International hereunder, or any setoff or application of
funds of Viacom International by the Administrative Agent or any Lender, Viacom International shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender
against Viacom or against any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Viacom Obligations, nor shall Viacom
International seek or be entitled to seek any contribution, reimbursement, exoneration or indemnity from or against Viacom in respect of payments made by Viacom International hereunder, until all
amounts owing to the Administrative Agent and the Lenders by Viacom on account of the Viacom Obligations are paid in full and the Commitments are terminated. So long as the Viacom Obligations remain
outstanding, if any amount shall be paid by or on behalf of Viacom or any other Person to Viacom International on account of any of the rights waived in this Section 8.2, such amount shall be
held by Viacom International in trust, segregated from other funds of Viacom International, and shall, forthwith upon receipt by Viacom International, be turned over to the Administrative Agent in the
exact form received by Viacom International (duly indorsed by Viacom International to the Administrative Agent, if required), to be applied against the Viacom Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine. 

(c)  Amendments, etc. with respect to the Viacom Obligations. Viacom International shall remain obligated under this Section 8.2
notwithstanding that, without any reservation of rights against Viacom International, and without notice to or further assent by Viacom International, any demand for payment of or reduction in the
principal amount of any of the Viacom Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender, and any of the Viacom Obligations
continued, and the Viacom Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and this Agreement
and any other documents executed and delivered in connection herewith may be amended, modified, supplemented or terminated, in whole or in part, as the Required Lenders (or all Lenders, as the case
may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Viacom
Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any lien at any
time held by it as security for the Viacom Obligations or for the guarantee contained in this Section 8.2 or any property subject thereto. 

(d)  Guarantee Absolute and Unconditional. Viacom International waives any and all notice of the creation, renewal, extension or accrual of
any of the Viacom Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon the guarantee contained in this Section 8.2 or acceptance of the guarantee
contained in this Section 8.2; the Viacom Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 8.2; and all dealings between Viacom 

38

 

International or Viacom, on the one hand, and the Administrative Agent and the Lenders, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 8.2. Viacom International waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Viacom International or
Viacom with respect to the Viacom Obligations. The guarantee contained in this Section 8.2 shall be construed
as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of this Agreement, any of the Viacom Obligations or any collateral security
therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) the legality under applicable requirements of
law of repayment by Viacom of any Viacom Obligations or the adoption of any requirement of law purporting to render any Viacom Obligations null and void, (c) any defense, setoff or counterclaim
(other than a defense of payment or performance by Viacom) which may at any time be available to or be asserted by Viacom International against the Administrative Agent or any Lender, or
(d) any other circumstance whatsoever (with or without notice to or knowledge of Viacom International or Viacom) which constitutes, or might be construed to constitute, an equitable or legal
discharge of Viacom for any of its Viacom Obligations, or of Viacom International under the guarantee contained in this Section 8.2, in bankruptcy or in any other instance. When the
Administrative Agent or any Lender is pursuing its rights and remedies under this Section 8.2 against Viacom International, the Administrative Agent or any Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against Viacom or any other Person or against any collateral security or guarantee for the Viacom Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender to pursue such other rights or remedies or to collect any payments from Viacom or any such other Person or to realize upon
any such collateral security or guarantee or to exercise any such right of offset, or any release of Viacom or any such other Person or of any such collateral security, guarantee or right of offset,
shall not relieve Viacom International of any liability under this Section 8.2, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent and the Lenders against Viacom International. 

(e)  Reinstatement. The guarantee contained in this Section 8.2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Viacom Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of Viacom or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Viacom or any
substantial part of its property, or otherwise, all as though such payments had not been made. 

(f)  Payments. Viacom International hereby agrees that any payments in respect of the Viacom Obligations pursuant to this Section 8.2
will be paid to the Administrative Agent without setoff or counterclaim in Dollars at the office of the Administrative Agent specified in Section 9.1. 

(g)  Release of Guarantee. Notwithstanding the foregoing, the guarantee contained in this Section 8.2 shall be released on the
earlier of the date on which (i) all notes, debentures and bonds now or hereafter issued by Viacom which carry a Viacom International guarantee (the
"Bonds") are paid in full and (ii) the guarantee of Viacom International with respect to the Bonds is released. On such date, this
Section 8.2, including without limitation Section 8.2(e), shall be deemed to have no legal effect whatsoever. 

39

 
ARTICLE IX

MISCELLANEOUS  

SECTION
9.1.    Notices.    Notices and other communications provided for herein shall be in writing (or, where permitted to be made
by telephone, shall be confirmed promptly in writing) and shall be delivered by hand or overnight courier service, mailed or sent by telecopier as follows: 

(a)  if
to Viacom, to it at Viacom Inc., 1515 Broadway, New York, New York 10036, Attention of Vice President and Treasurer (Telecopy No. (212) 846-1896), with a
copy to General Counsel (Telecopy No. (212) 258-6099); 

(b)  if
to Viacom International, to it c/o Viacom Inc., 1515 Broadway, New York, New York 10036, Attention of Vice President and Treasurer (Telecopy No.
(212) 846-1896), with a copy to General Counsel (Telecopy No. (212) 258-6099); 

(c)  if
to the Administrative Agent, to it at JPMorgan Chase Bank, 270 Park Avenue, New York, New York 10017, Attention: James Stone (Telecopy No. (212) 270-4584), with
a copy to JPMorgan Chase Bank, One Chase Manhattan Plaza, New York, New York, 10080, Attention: Debra Rockower (Telecopy No. (212) 552-2261); 

(d)  if
to a Lender, to it at its address (or telecopy number) set forth in Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have become a party
hereto; and 

(e)  if
to a Subsidiary Borrower, to it at its address set forth in the relevant Subsidiary Request. 

Notwithstanding
the foregoing, each of Viacom, any other Borrower, the Administrative Agent and any Lender may, in its discretion, provide any notice, report or other information to be provided under
this Agreement to a Lender by (i) electronic mail to the electronic mail address provided by such Lender in its Administrative Questionnaire and/or (ii) through access to a web site. All
notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on (A) the date of receipt if delivered by hand
or overnight courier service or sent by telecopy or electronic mail, (B) the date of posting if given by web site access, (C) the date of such telephone call, if permitted by the terms
hereof and if promptly confirmed in writing, or (D) on the date five Business Days after dispatch by registered mail if mailed, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this Section 9.1 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.1. 

SECTION
9.2.    Survival of Agreement.    All representations and warranties made hereunder and in any certificate delivered
pursuant hereto or in connection herewith shall be considered to have been relied upon by the Agents and the Lenders and shall survive the execution and delivery of this Agreement and the making of
the Loans and other extensions of credit hereunder, regardless of any investigation made by the Agents or the Lenders or on their behalf. 

SECTION
9.3.    Binding Effect.    This Agreement shall be binding upon and inure to the benefit of each Borrower, each Agent and
each Lender and their respective successors and assigns, except that Viacom shall not have the right to assign its rights or obligations hereunder or any interest herein without the prior consent of
all the Lenders. 

SECTION
9.4.    Successors and Assigns.    (a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party, and all covenants, promises and agreements by or on behalf of each Borrower, any Agent or any Lender that are contained
in this Agreement shall bind and inure to the benefit of their respective successors and assigns. 

(b)  Each
Lender may assign to one or more assignees all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it); provided, however, that (i) except in the case of an assignment to a Lender or a 

40

 

Lender Affiliate (other than if at the time of such assignment, such Lender or Lender Affiliate would be entitled to require any Borrower to pay greater amounts under Section 2.17(a) than if
no such assignment had occurred, in which case such assignment shall be subject to the consent requirement of this clause (i)), Viacom and the Administrative Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld or delayed), (ii) (x) except in the case of assignments to any Person that is a Lender prior to giving effect
to such assignment, the amount of the aggregate Commitments and/or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less than $10,000,000 and (y) the amount of the aggregate Commitments and/or Loans retained by any assigning Lender
(determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $10,000,000, unless (in the case of
clause (x) or (y) above) the assigning Lender's Commitment and Loans are being reduced to $0 pursuant to such assignment, (iii) the assignor and assignee shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500 and (iv) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and recording pursuant to Section 9.4(e), from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days after the execution thereof (or any lesser period to which the Administrative Agent and Viacom may agree), (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement and (B) the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto (but shall continue to be entitled to the benefits of Sections 2.12, 2.13, 2.17 and 9.5, as well as to any Fees accrued for its account
hereunder and not yet paid)). 

(c)  By
executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim created
by such assigning Lender, (ii) except as set forth in clause (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this Agreement or any other instrument or document furnished pursuant hereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto or the financial condition of Viacom or any of its Subsidiaries or the
performance or observance by Viacom or any of its Subsidiaries of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to Sections 3.2 and 5.1 and such other documents and information as it has deemed appropriate to make it own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the Administrative Agent, such assigning Lender or any other Agent or
Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement;
(vi) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all
the obligations which by the terms of this Agreement are required to be performed by it as a Lender. 

41

 

(d)  The
Administrative Agent, acting for this purpose as agent of each Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be conclusive in the absence of manifest error and each Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by any Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice. 

(e)  Upon
its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee
(unless the
assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) above and, if required, the written consent of Viacom and the Administrative Agent
to such assignment, the Administrative Agent shall (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to Viacom. 

(f)  Each
Lender may without the consent of any Borrower or the Agents sell participations to one or more banks, other financial institutions or other entities
(provided, that any such other entity is a not a competitor of Viacom or any Affiliate of Viacom) all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided, however, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (ii) the participating
banks, financial institutions or other entities shall be entitled to the benefit of the cost protection provisions contained in Sections 2.12, 2.13 and 2.17 to the same extent as if they were Lenders
(provided, that additional amounts payable to any Lender pursuant to Section 2.17 shall be determined as if such Lender had not sold any such
participations) and (iv) the Borrowers, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations
under this Agreement, and such Lender shall retain the sole right to enforce the obligations of each Borrower relating to the Loans and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers decreasing any fees payable hereunder or the amount of principal of or the rate at which interest is payable on the Loans,
extending any scheduled principal payment date or date fixed for the payment of interest on the Loans or of Facility Fees, increasing the amount of or extending the Commitments or releasing the
guarantee contained in Section 8.1 or 8.2 (except in accordance with Section 8.2(g)), in each case to the extent the relevant participant is directly affected thereby). 

(g)  Any
Lender or participant may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.4, disclose to the assignee
or participant or proposed assignee or participant any information relating to any Borrower furnished to such Lender by or on behalf of such Borrower;  provided, that, prior to any such disclosure of
information designated by such Borrower as confidential, each such assignee or participant or proposed
assignee or participant shall execute a Confidentiality Agreement whereby such assignee or participant shall agree (subject to the exceptions set forth therein) to preserve the confidentiality of such
confidential information. A copy of each such Confidentiality Agreement executed by an assignee shall be promptly furnished to Viacom. 

(h)  Notwithstanding
the limitations set forth in paragraph (b) above, (i) any Lender may at any time assign or pledge all or any portion of its rights under this Agreement
to a Federal Reserve Bank and (ii) any Lender which is a "fund" may at any time assign or pledge all or any portion of its rights under this Agreement to secure such Lender's indebtedness, in
each case without the prior written consent of any Borrower or the Administrative Agent; provided, that each such assignment shall be made in accordance
with applicable law and no such assignment shall release a Lender from any of its 

42

 

obligations hereunder. In order to facilitate any such assignment, each Borrower shall, at the request of the assigning Lender, duly execute and deliver to the assigning Lender a registered
promissory note or notes evidencing the Loans made to such Borrower by the assigning Lender hereunder. 

(i)  Notwithstanding
anything to the contrary contained herein, any Lender (a "Granting Bank") may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the Granting Bank to the Administrative Agent and the relevant Borrower, the
option to provide to such Borrower all or any part of any Loan that such Granting Bank would otherwise be obligated to make to such Borrower pursuant to this Agreement;  provided, that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan, and (ii) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Loan, the Granting Bank shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Bank to the same extent, and as if, such Loan were made by such Granting Bank. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Bank). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section, any SPC may (i) with notice to, but without the prior
written consent of, the relevant Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Bank or to
any financial institutions (consented to by such Borrower and the Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or
maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPC. This Section may not be amended without the written consent of any SPC which has been identified as such by the Granting Bank to the
Administrative Agent and the relevant Borrower and which then holds any Loan pursuant to this paragraph (i). 

(j)  Neither
Viacom nor any Subsidiary Borrower shall assign or delegate any of its rights or duties hereunder without the prior consent of all the Lenders;  provided, Viacom may assign or delegate any of its rights
or duties hereunder (excepting its rights and duties pursuant to Section 8.1) to any
Subsidiary Borrower and any Subsidiary Borrower may assign or delegate any of its rights or duties hereunder to Viacom or (excepting Viacom International's rights and duties pursuant to 8.2) to any
other Subsidiary Borrower, in each case without the prior consent of the Lenders unless such assignment would adversely affect the Lenders; provided,
further, Viacom may and any Subsidiary Borrower may assign or delegate any of its rights and duties hereunder pursuant to a merger or consolidation permitted by
Section 5.4(b) or (d) without the prior consent of the Lenders. 

SECTION
9.5.    Expenses; Indemnity.    (a) Viacom agrees to pay all reasonable legal and other
out-of-pocket expenses incurred by JP Morgan Securities Inc., in its capacity as a Joint Lead Arranger and in its capacity as Sole Bookrunner, and the Administrative
Agent and their respective affiliates in connection with the preparation, negotiation, execution and delivery of this Agreement or in connection with any amendments, modifications or waivers of the
provisions hereof (whether or not the transactions hereby contemplated shall be consummated) or incurred by any Agent, any Lender in connection with the enforcement or protection of the rights of the
Agents, the Lenders under this Agreement or in connection with the Loans made hereunder, including, without limitation, the reasonable fees, charges and disbursements of Hughes Hubbard & Reed
LLP, counsel for JP Morgan Securities Inc., in its capacity as a Joint Lead Arranger and in its capacity as Sole Bookrunner, and the 

43

 

Administrative Agent, and, in connection with any such enforcement or protection, the reasonable fees, charges and disbursements of any other counsel for any Agent or Lender. 

(b)  Viacom
agrees to indemnify and hold harmless each Agent, each Lender and each of their respective directors, officers, employees, affiliates and agents (each, an
"Indemnified Person") against, and to reimburse each Indemnified Person, upon its demand, for, any losses, claims, damages, liabilities or other
expenses ("Losses") to which such Indemnified Person becomes subject insofar as such Losses arise out of or in any way relate to or result from
(i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby (and any amendment hereto or thereto), the performance by the parties hereto or thereto of
their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or (ii) the use (or proposed use) of the proceeds of the Loans,
including, without limitation, Losses consisting of reasonable legal, settlement or other expenses incurred in connection with investigating, defending or participating in any legal proceeding
relating to any of the foregoing (whether or not such Indemnified Person is a party thereto); provided, that the foregoing will not apply to any Losses
to the extent they are found by a final decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnified Person. No Indemnified Person
shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic, telecommunications or other information transmission systems
(provided, that the foregoing will not apply to any Losses to the extent they are found by a final decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnified Person). 

(c)  The
provisions of this Section 9.5 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any investigation made by or on behalf of any
Agent or Lender. All amounts under this Section 9.5 shall be payable on written demand therefor. 

SECTION
9.6.    Right of Setoff.    If an Event of Default shall have occurred and be continuing, each Agent and each Lender is
hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Agent or Lender to or for the credit or the account of any Borrower against any of and all the obligations of such Borrower now or hereafter
existing under this Agreement or the Administrative Agent Fee Letter held by such Agent or Lender which shall be due and payable. The rights of each Agent and each Lender under this Section 9.6
are in addition to other rights and remedies (including other rights of setoff) which such Agent or Lender may have. 

SECTION
9.7.    APPLICABLE LAW.    THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. 

SECTION
9.8.    Waivers; Amendment.    (a) No failure or delay of any Agent or any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies which they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Borrower from any such provision shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or
demand on any Borrower in any case shall entitle any Borrower to any other or further notice or demand in similar or other circumstances. 

44

   
(b)    Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement in writing entered into by the Borrowers and the Required
Lenders; provided, however, that no such agreement shall (i) reduce the amount or extend the scheduled date of maturity of any Loan or of any
installment thereof, interest or fee payable hereunder or extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of any Commitment of any Lender, in each
case without the prior written consent of each Lender directly affected thereby; (ii) amend, modify or waive any provision of this Section 9.8(b), or reduce the percentage specified in
the definition of "Required Lenders", release the guarantee contained in Section 8.1 or 8.2 (except in accordance with Section 8.2(g)) or consent to the assignment or delegation by
Viacom or any Subsidiary Borrower of any of its rights and obligations under this Agreement (except (A) by Viacom (excepting its rights and duties pursuant to Section 8.1) to any
Subsidiary Borrower or (B) by any Subsidiary Borrower to Viacom or (excepting Viacom International's rights and duties pursuant to Section 8.2) to any other Subsidiary Borrower and as
set forth in Section 9.4(j)), in each case without the prior written consent of all the Lenders; or (iii) amend, modify or waive any provision of Article VII without the prior
written consent of each Agent affected thereby; provided, further that no such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent hereunder in such capacity without the prior written consent of the Administrative Agent. 

SECTION
9.9.    Entire Agreement.    This Agreement (together with the Subsidiary Borrower Designations and the Subsidiary Borrower
Requests) constitutes the entire contract between the parties relative to the subject matter hereof. Any previous agreement among the parties with respect to the subject matter hereof is superseded by
this Agreement. Nothing in this Agreement, expressed or implied, is intended to confer upon any party other than the parties hereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement. 

SECTION
9.10.    Waiver of Jury Trial.    Each party hereto hereby waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this Agreement. Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 9.10. 

SECTION
9.11.    Severability.    In the event any one or more of the provisions contained in this Agreement should be held invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 

SECTION
9.12.    Counterparts.    This Agreement may be executed in two or more counterparts, each of which constitute an original
but all of which when taken together shall constitute but one contract, and shall become effective as provided in Section 9.3. 

SECTION
9.13.    Headings.    Article and Section headings and the Table of Contents used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. 

SECTION
9.14.    Jurisdiction; Consent to Service of Process.    (a) Each Borrower hereby irrevocably and unconditionally
submits, for itself and its Property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby 

45

 

irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Each Subsidiary Borrower designates and directs Viacom at its offices at 1515 Broadway, New York, New York 10036, as its agent to receive service of any and all process
and documents on its behalf in any legal action or proceeding referred to in this Section 9.14 in the State of New York and agrees that service upon such agent shall constitute valid and
effective service upon such Subsidiary Borrower and that failure of Viacom to give any notice of such service to any Subsidiary Borrower shall not affect or impair in any way the validity of such
service or of any judgment rendered in any action or proceeding based thereon. Nothing in this Agreement shall affect any right that any Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Borrower or its Properties in the courts of any jurisdiction. 

(b)    Each
Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 

(c)    Each
party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by law. 

SECTION
9.15.    Confidentiality.    (a) Each Lender agrees to keep confidential and not to disclose (and to cause its
affiliates, officers, directors, employees, agents and representatives to keep confidential and not to disclose) and, at the request of Viacom (except as provided below or if such Lender is required
to retain any Confidential Information (as defined below) pursuant to customary internal or banking practices, bank regulations or applicable law), promptly to return to Viacom or destroy the
Confidential Information and all copies thereof, extracts therefrom and analyses or other materials based thereon, except that such Lender shall be permitted to disclose Confidential Information
(i) to such of its officers, directors, employees, agents, affiliates and representatives as need to know such Confidential Information in connection with such Lender's participation in this
Agreement, each of whom shall be informed by such Lender of the confidential nature of the Confidential Information and shall agree to be bound by the terms of this Section 9.15; (ii) to
the extent required by applicable laws and regulations or by any subpoena or similar legal process or requested by any Governmental Authority or agency having jurisdiction over such Lender;  provided, however, that, except in the case of disclosure to bank regulators or examiners in accordance with customary banking practices, if legally
permitted written notice of each instance in which Confidential Information is required or requested to be disclosed shall be furnished to Viacom not less than 30 days prior to the expected
date of such disclosure or, if 30 days' notice is not practicable under the circumstances, as promptly as practicable under the circumstances; (iii) to the extent such Confidential
Information (A) is or becomes publicly available other than as a result of a breach of this Agreement, (B) becomes available to such Lender on a non-confidential basis from a
source other than a party to this Agreement or any other party known to such Lender to be bound by an agreement containing a provision similar to this Section 9.15 or (C) was available
to such Lender on a non-confidential basis prior to this disclosure to such Lender by a party to this Agreement or any other party known to such Lender to be bound by an agreement
containing a provision similar to this Section 9.15; (iv) as permitted by Section 9.4(g); or (v) to the extent Viacom shall have consented to such disclosure in writing. As
used in this Section 9.15, "Confidential Information" shall mean any materials, documents or 

46

 

information furnished by or on behalf of any Borrower in connection with this Agreement designated by or on behalf of such Borrower as confidential. 

(b)    Each
Lender (i) agrees that, except to the extent the conditions referred to in subclause (A), (B) or (C) of clause (iii) of paragraph (a) above
have been met and as provided in paragraph (c) below, (A) it will use the Confidential Information only in connection with its participation in this Agreement and (B) it will not
use the Confidential Information in connection with any other matter or in a manner prohibited by any law, including, without limitation, the securities laws of the United States and
(ii) understands that breach of this Section 9.15 might seriously prejudice the interest of the Borrowers and that the Borrowers are entitled to equitable relief, including an
injunction, in the event of such breach. 

(c)    Notwithstanding
anything to the contrary contained in this Section 9.15, each Agent and each Lender shall be entitled to retain all Confidential Information for so long as it
remains an Agent or a Lender to use solely for the purposes of servicing the credit and protecting its rights hereunder. 

SECTION
9.16.    Waiver of Notice of Termination Period.    By its execution of this Agreement, each Lender hereby waives any right
to notice of termination, or any notice period with respect to the termination,
of the Existing Credit Agreement that such Lender may have had under the Existing Credit Agreement. 

SECTION
9.17.    Consent to Amendments to Five-Year Credit Agreement and Amended and Restated Infinity Credit
Agreement.    By its execution of this Agreement, each Lender hereby consents to and approves each of (a) Amendment No. 2 to the Five-Year
Credit Agreement, the form of which is attached hereto as Exhibit H, and (b) Amendment No. 1 to the Amended and Restated Infinity Credit Agreement, the form of which is attached
hereto as Exhibit I, and hereby authorizes JPMorgan Chase Bank, in its capacity as Administrative Agent under each of the Five-Year Credit Agreement and the Amended and Restated
Infinity Credit Agreement, to execute such Amendment No. 2 and Amendment No. 1, respectively, on behalf of such Lender. 

[Remainder of the page left blank intentionally; Signature page to follow.]

47

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. 

	 	 	VIACOM INC.
	

 	
 	

By:	

/s/  ROBERT G. FREEDLINE      
 Name: Robert G. Freedline

Title: Senior Vice President and Treasurer
	 	 	 	 
	 	 	VIACOM INTERNATIONAL INC.
	

 	
 	

By:	

/s/  ROBERT G. FREEDLINE      
 Name: Robert G. Freedline

Title: Vice President and Treasurer
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, as Administrative Agent and as a Lender
	

 	
 	

By:	

/s/  JAMES STONE      
 Name: James Stone

Title: Managing Director
	 	 	 	 
	 	 	SALOMON SMITH BARNEY INC., as Syndication Agent
	

 	
 	

By:	

/s/  CAROLYN KEE      
 Name: Carolyn Kee

Title: Managing Director
	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Co-Documentation Agent and as a Lender
	

 	
 	

By:	

/s/  THOMAS J. KANE      
 Name: Thomas J. Kane

Title: Principal
	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH, as Co-Documentation Agent and as a Lender
	

 	
 	

By:	

/s/  LILLIAN KIM      
 Name: Lillian Kim

Title: Authorized Signatory

48

 

	 	 	DEUTSCHE BANK SECURITIES, INC., as Co-Documentation Agent
	

 	
 	

By:	

/s/  WILLIAM W. MCGINTY      
 Name: William W. McGinty

Title: Director	

/s/  CHRISTOPHER S. HALL      
 Christopher S. Hall

Managing Director

	 	 	CITIBANK, N.A., as a Lender
	

 	
 	

By:	

/s/  ELIZABETH H. MINNELLA      
 Name: Elizabeth H. Minnella

Title: Director & VP

	 	 	DEUTSCHE BANK AG, NEW YORK BRANCH, as a Lender
	

 	
 	

By:	

/s/  WILLIAM W. MCGINTY      
 Name: William W. McGinty

Title: Director	

/s/  CHRISTOPHER S. HALL      
 Christopher S. Hall

Managing Director

	 	 	SUMITOMO MITSUI BANKING CORPORATION (as successor to The Sumitomo Bank, Limited), as a Lender
	

 	
 	

By:	

/s/  LEO E. PAGARIGAN      
 Name: Leo E. Pagarigan

Title: Senior Vice President
	 	 	 	 
	 	 	By:	/s/  DAVID W. KEE      
 Name: David W. Kee

Title: Vice President
	 	 	 	 
	 	 	ABN AMRO BANK N.V., as a Lender
	

 	
 	

By:	

/s/  FRANCES O'R. LOGAN      
 Name: Frances O'R. Logan

Title:    Senior Vice President
	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA, as a Lender
	

 	
 	

By:	

/s/  BRENDA S. INSULL      
 Name: Brenda S. Insull

Title: Authorized Signatory
	 	 	 	 

49

 

	 	 	BANK ONE, NA, as a Lender
	

 	
 	

By:	

/s/  JENNIFER L. JONES      
 Name: Jennifer L. Jones

Title:    Director
	 	 	 	 
	 	 	DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender
	

 	
 	

By:	

/s/  MICHAEL S. GREENBERG      
 Name: Michael S. Greenberg

Title: Vice President
	 	 	 	 
	 	 	By:	/s/  WILLIAM E. LAMBERT      
 Name: William E. Lambert

Title: Vice President
	 	 	 	 
	 	 	BARCLAYS BANK PLC, as a Lender
	

 	
 	

By:	

/s/  L. PETER YETMAN      
 Name: L. Peter Yetman

Title: Director
	 	 	 	 
	 	 	MIZUHO CORPORATE BANK, LTD., as a Lender
	

 	
 	

By:	

/s/  RAYMOND VENTURA      
 Name: Raymond Ventura

Title: Senior Vice President

	 	 	CREDIT SUISSE FIRST BOSTON, as a Lender
	

 	
 	

By:	

/s/  SOVANNA DAY-GOINS      
 Name: Sovanna Day-Goins

Title: Vice President	

/s/  DOREEN B. WELCH      
 Doreen B. Welch

Associate

	 	 	MELLON BANK, N.A., as a Lender
	

 	
 	

By:	

/s/  RAGHUNATHA REDDY      
 Name: Raghunatha Reddy

Title: Lending Officer
	 	 	 	 

50

 

	 	 	THE ROYAL BANK OF SCOTLAND PLC, as a Lender
	

 	
 	

By:	

/s/  DAVID A. LUCAS      
 Name: David A. Lucas

Title: Senior Vice President

	 	 	WESTLB AG, NEW YORK BRANCH, as a Lender
	

 	
 	

By:	

/s/  SALVATORE BATTINELLI      
 Name: Salvatore Battinelli

Title: Managing Director	

/s/  RICHARD J. PEARSE      
 Richard J. Pearse

Executive Director
	 	 	 	 	 
	 	 	LLOYDS TSB BANK PLC, as a Lender
	

 	
 	

By:	

/s/  WINDSOR R. DAVIES      
 Name: Windsor R. Davies

Title: Director, Corporate

Banking USA	

    
 Lisa Maguire

Assistant Vice President

Corporate Banking USA

	 	 	UBS AG, CAYMAN ISLANDS BRANCH, as a Lender
	

 	
 	

By:	

/s/  WILFRED V. SAINT      
 Name: Wilfred V. Saint

Title: Associate Director Banking Products
	 	 	 	 
	 	 	By:	/s/  [ILLEGIBLE]      
 Name:

Title:
	 	 	 	 
	 	 	THE BANK OF NEW YORK, as a Lender
	

 	
 	

By:	

/s/  JOHN R. CIULLA      
 Name: John R. Ciulla

Title: Vice President
	 	 	 	 
	 	 	NATIONAL AUSTRALIA BANK LIMITED, as a Lender
	

 	
 	

By:	

/s/  EDUARDO SALAZAR      
 Name: Eduardo Salazar

Title: Head, TMT—Americas
	 	 	 	 

51

 

	 	 	FLEET NATIONAL BANK, as a Lender
	

 	
 	

By:	

/s/  LAURA NEENAN      
 Name: Laura Neenan

Title: Vice President
	 	 	 	 
	 	 	MERRILL LYNCH BANK USA, as a Lender
	

 	
 	

By:	

/s/  LOUIS ALDER      
 Name: Louis Alder

Title: Vice President

52Use these links to rapidly review the document

  TABLE OF CONTENTS

 
 

EXHIBIT 4.4    
  

         DATED 16 OCTOBER 2002  

GRANADA PLC

-AND-

CARLTON COMMUNICATIONS PLC

MERGER AGREEMENT  

 LOVELLS  

Portions of this merger agreement have been omitted and filed separately with the

Securities and Exchange Commission pursuant to a request for confidential treatment 

  

 

TABLE OF CONTENTS    
  

 

	 

	SCHEDULE 1    PRESS ANNOUNCEMENT
	

SCHEDULE 2    PRELIMINARY STRUCTURE PAPER
	

SCHEDULE 3    EMPLOYEE SHARE SCHEMES AND EMPLOYEE MATTER
	

SCHEDULE 4    TAX COVENANT

2

   
        A MERGER AGREEMENT made on 16 October 2002 

BETWEEN: 

        Granada plc (registered number 3962410) whose registered office is at The London Television Centre, Upper Ground, London SE1 9LT
("Granada"); and 

        Carlton Communications plc (registered number 348312) whose registered office is at 25 Knightsbridge, London SW1X 7RZ
("Carlton"). 

WHEREAS:  

	(A)
	The
boards of directors of Granada and Carlton have determined that it is in the best interests of their respective companies to achieve the Merger on the terms set out in the Press
Announcement and this Agreement and otherwise subject to the Merger Pre-conditions and the Merger Conditions.

	(B)
	The
boards of directors of Granada and Carlton (or duly constituted committees of them) have considered and approved this Agreement. 

IT IS AGREED as follows 

1.    DEFINITIONS

In
this Agreement. unless the context otherwise requires, the following expressions shall have the following meanings: 

"Alpha" has the meaning set out in clause 6.1; 

"Associate" means (other than in Schedule 4) any company in which a person holds 20% or more of the equity share capital; 

"Code" means The City Code on Takeovers and Mergers; 

"Competing Transaction" means [Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

"Confidentiality Letter" means the letter between the Parties dated 4 October 2002; 

"Effective Date" means the date on which the Merger becomes effective; 

"Group" means, in relation to any person, any corporations which are Holding Companies or Subsidiary Undertakings of it or Subsidiary Undertakings of
any such Holding Company; 

"Holding Company" shall have the meaning ascribed to it in section 736 of the Companies Act 1985; 

"ITC" has the meaning set out in clause 5.2; 

"Listing Rules" means the listing rules of the UK Listing Authority; 

"Merger" means the proposed merger between Granada and Carlton on the terms set out in the Press Announcement and subject to the Merger
Pre-conditions and the Merger Conditions; 

"Merger Conditions" means the conditions to the Merger set out in paragraph 2 of Appendix II to the Press Announcement; 

"Merger Pre-conditions" means the pre-conditions to the posting of the formal documentation relating to the Merger as set out in
paragraph 1 of Appendix II to the Press Announcement; 

"Panel" means The Panel on Takeovers and Mergers; 

3

 

"Party" means Granada or Carlton, as appropriate; 

"Preliminary Structure Paper" means the preliminary structure paper detailing the steps which might be taken to achieve the Merger, as set out in
Schedule 2; 

"Press Announcement" means the press announcement of the Merger to be released by Granada and Carlton, in the form attached at Schedule 1; 

"Relevant Period" has the meaning set out in clause 3.1(b); 

"Schemes" has the meaning set out in clause 6 and "Scheme" shall be construed accordingly as the context may require; and 

"Subsidiary Undertaking" shall have the meaning ascribed to it in section 258 of the Companies Act 1985. 

2.    PRESS ANNOUNCEMENT AND SHAREHOLDER DOCUMENTATION

	2.1
	Granada
and Carlton shall procure:

	(a)
	the
release of the Press Announcement immediately following the signature of this Agreement; and

	(b)
	the
posting of all such documentation to their respective shareholders as may be required to effect the Merger as soon as practicable following the satisfaction or waiver of the
Merger Pre-conditions. 

	2.2
	Without
prejudice to the obligation set out in clause 2.1(b), for the purpose of obtaining any necessary shareholder approvals to effect the Merger:

	(a)
	Granada
shall convene appropriate meetings of its shareholders; and

	(b)
	Carlton
shall convene appropriate meetings of its shareholders, 

to
be held as soon as reasonably practical following the satisfaction or waiver of the Merger Pre-conditions. Granada and Carlton agree that such meetings shall, to the extent reasonably
practicable, be held on or about the same date and in any event no more than five days apart. The boards of directors of Granada and Carlton shall recommend the Merger and the relevant resolutions to
their respective shareholders, subject to any requirements to the contrary arising as a result of the fiduciary duties, of such directors. 

	2.3
	Without
prejudice to the terms of the Confidentiality Letter and the provisions of clause 5, each Party shall provide to the other such information about its Group and
Associates as may reasonably be required for inclusion in any public documentation to be issued by such Party in connection with the Merger.

	2.4
	Without
prejudice to the provisions of clause 5 and to any requirements to the contrary arising as a result of the fiduciary duties of the directors of Granada or Carlton (as
appropriate), each of Granada and Canton shall take all necessary action to complete the Merger on the terms set out in the Press Announcement and this Agreement.

	2.5
	Each
of Granada and Carlton undertakes to the other that the necessary action to make the Merger effective will only be taken if all of the Merger Pre-conditions and the
Merger Conditions have been satisfied or waived. 

3.    COMPENSATION PAYMENT

	3.1
	As
compensation for the loss of the benefits which would have accrued had the Merger completed, each Party (the "Paying Party") agrees
to pay the other Party (the "Receiving Party") an amount of £ 

4

 

8,500,000
(eight and a half million pounds) (the "Compensation Payment") if any of the following circumstances occurs: 

[Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

	3.2
	The
Compensation Payment is payable (without any set-off, deduction or withholding, save as required by law) by wire transfer of same day funds to an account designated by
the Receiving Party no later than two business days after the relevant circumstance set out in clause 3.1 occurs.

	3.3
	Amounts
payable under clause 3.1 are expressed exclusive of amounts in respect of VAT. If Customs and Excise determine that any such amount is the consideration for a taxable
supply for VAT purposes. The Paying Party shall, in addition to such amounts, pay on receipt of a valid VAT invoice, an amount equal to any VAT which may from time to time be properly chargeable in
respect of supplies made to the Paying Party under this clause 3.

	3.4
	Payment
of the Compensation Payment shall be without prejudice to any other rights or remedies available to either Party in connection with this Agreement including, without
limitation, any right of a Party to claim damages in respect of any breach of this Agreement by the other Party.

	3.5
	Each
Party confirms that its directors believe the arrangements set out in this clause 3 to be in the best interests of its shareholders, and that these arrangements have been
approved by the Panel pursuant to Rule 21.2 of the Code. Each Party further confirms that it would not have approved or released the Press Announcement if the Parties had not agreed the
provisions of this clause 3. 

4.    EXCLUSIVITY AND CONDUCT PENDING COMPLETION OF THE MERGER

	4.1
	[Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

	4.2
	[Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

	4.3
	[Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

	4.4
	Each
of Granada and Carlton undertakes to the other that prior to the earlier of the Effective Date and the termination of this Agreement in accordance with its terms it will:

	(a)
	not
carry on business other than in the ordinary course or make (or agree to make) any payment outside the ordinary course of trading which would be material for disclosure in the
context of the Merger;

	(b)
	not
do or knowingly omit to do any act, matter or thing which would be reasonably likely to cause any of the Merger Pre-conditions or the Merger Conditions not to be
satisfied in relation to such Party or knowingly do or omit to do any act, matter or thing which would be reasonably likely to cause any of the Merger Pre- conditions or the Merger
Conditions not to be satisfied in relation to the other Party;

	(c)
	without
prejudice to the provisions of clause 4.4(b), not enter into or agree to enter into any transaction which would require the approval of its shareholders under the
Listing Rules;

	(d)
	not
take any action which would amount to an action requiring the approval of shareholders in general meeting under Rule 21 of the Code (regardless of whether the relevant
party is subject to such Rule at such time); or

	(e)
	not
declare, make or pay any dividend save as provided for in the section of the Press Announcement headed "Dividends" and in clause 4.9, 

5

 

save,
in any such case, with the prior written approval of the other Party, such approval not to be unreasonably withheld or delayed in the case of any act, matter or thing which would not be material
in the context of the Merger. 

[Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

	4.5
	In
the event that prior to the earlier of the Effective Date and the termination of this Agreement in accordance with its terms either Granada or Carlton becomes aware of any act,
matter or thing
inconsistent with the obligations contained in clause 4.4 (or would be so inconsistent but for the proviso to that clause), it shall inform the other Party promptly thereafter.

	4.6
	Neither
Party shall (and each Party shall procure that none of the other members of its Group shall) from the date of this Agreement until the earlier of the expiry of
12 months from the termination of this Agreement and the Effective Date, directly or indirectly:

	(a)
	employ
or engage any person; or

	(b)
	solicit
or entice away or endeavour to solicit or entice away from the other any person, 

in
either case who is at the date of this Agreement employed or engaged by the other Party with a basic salary of £100,000 or more. 

	4.7
	Each
of Granada and Carlton acknowledges and agrees that the duration, extent and application of the restrictions contained in clause 4.6 are no greater than is reasonable and
necessary for the protection of its respective business interests but that, if any restriction shall be adjudged by a court of competent jurisdiction to be void or unenforceable but would be valid if
part of the wording thereof was deleted and/or the period thereof was reduced. the said restriction shall apply within the jurisdiction of the court with such modifications as may be necessary to make
it valid and enforceable.

	4.8
	In
the period between the date of this Agreement and the Effective Date or the termination of this Agreement the Parties will discuss the basis of preparation of the balance sheets
comprised in their annual audited and interim financial statements as regards the major items included therein with a view to considering the adoption of consistent accounting treatment with respect
to those items.

	4.9
	With
respect to dividends (interim and final) to be declared, made or paid after the Carlton and Granada final dividends for the year ended 30 September 2002,the following
provisions shall apply:

	(a)
	the
Parties shall consult with one another as to the amount of any dividend prior to its announcement;

	(b)
	Carlton
shall announce the amount of each of its dividends before Granada announces the amount of its equivalent dividend;

	(c)
	the
amount of Carlton's dividend on a per share basis shall not exceed the interim or, as the case may be, final dividend (on a per share basis) paid in the year ended 30
September 2002.

	(d)
	[Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

	(e)
	[Confidential Material]*

*  The confidential portion of this section of the merger agreement has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment. 

	4.10
	The
provisions of Schedule 3 shall have effect with respect to matters relating to employees and employee share schemes. 

6

 

5.    REGULATORY ISSUES

	5.1
	Granada
and Carlton agree that all submissions to, or filings with, the Office of Fair Trading (the "OFT") and all other applicable governmental and regulatory authorities in respect
of the Merger shall be prepared and submitted jointly and no such submission or filing shall be made without the prior agreement of the other Party. Each Party agrees to co-operate with
the other Party in providing all such information and assistance as may be required in the preparation of such submissions or filings. In particular, each Party shall make available appropriate
personnel to assist in the preparation of such submissions and filings. The Parties agree to use their best endeavours to prepare an appropriate submission to the OFT for lodging with the OFT as soon
as possible and in any event no later than three weeks after the release of the Press Announcement.

	5.2
	Granada
and Carlton shall provide any information reasonably requested by the Independent Television Commission (the "MITC") or required to be provided to the ITC under the
Broadcasting Act 1990 and/or the Broadcasting Act 1996 in respect of the Merger. Granada and Carlton agree that all such submissions to the ITC shall be prepared and submitted jointly and that no such
submission shall be made without the prior agreement of the other Party. Each Party agrees to co-operate with the other Party in providing all such information and assistance as may be
required in the preparation of such submissions.

	5.3
	In
particular, each Party shall make available appropriate personnel to assist in the preparation of such submissions. The Parties agree to use their best endeavours to prepare an
appropriate submission to the ITC for lodging with the ITC as soon as possible and in any event no later than three weeks after the release of the Press Announcement.

	5.4
	Granada
and Carlton agree that they shall each provide the other Party (and the latter's advisers) with reasonable notice of, and the opportunity to participate in, any meetings or
discussions with any such regulators as are referred to in clause 5.1 or 5.2.

	5.5
	If
it becomes reasonably apparent that the Secretary of State for Trade and Industry (and for the purposes of this clause the views of the Director General of Fair Trading shall be
taken as representing those of the Secretary of State for Trade and Industry) will only adopt a decision referred to in Merger Pre-condition 1.1 (a) or Merger Condition 2.4(a) not
to refer the Merger or any matter arising from the Merger to the Competition Commission subject to the provision of undertakings, commitments and/or assurances, Granada and Carlton shall provide such
undertakings, commitments and/or assurances provided that they are in terms reasonably satisfactory to Granada and Carlton.

	5.6
	If
the Secretary of State for Trade and Industry refers the Merger to the Competition Commission, the provisions of this Agreement shall continue in full force and effect and:

	(a)
	Granada
and Carlton agree that all submissions to the Competition Commission shall be prepared and submitted jointly and no such submission shall be made without the prior agreement
of the other Party; each Party agrees to co-operate with the other Party in providing all such information and assistance as may be required in the preparation of such submissions and, in
particular, to make available appropriate personnel to assist in the preparation of such submissions;

	(b)
	Granada
and Carlton agree that they shall each provide the other Party (and the latter's advisers) with reasonable notice of, and the opportunity to participate in, any meetings or
discussions with the Competition Commission; and

	(c)
	if
the Secretary of State indicates that the Merger will only be allowed to proceed subject to the provision of undertakings, commitments and/or assurances, Granada and Carlton shall
provide such
undertakings, commitments and/or assurances provided they are in terms reasonably satisfactory to Granada and Carlton. 

7

 

	5.7
	If
Granada and Canton have agreed to the waiver of the Merger Pre-conditions such that, pursuant to clause 2.1(b), shareholder documentation has been posted but
subsequently the Secretary of State for Trade and Industry refers the Merger to the Competition Commission such that the Merger lapses and, following such reference, the Secretary of State for Trade
and Industry grants a clearance decision as referred to in clause 5.6(c), Granada and Carlton shall use reasonable endeavours to persuade the Panel to grant a dispensation under
Rule 35.1 of the Code and shall procure the further posting of such shareholder documentation as may be required to ensure that shareholders are provided with all relevant information for the
purposes of the Merger and the provisions of clause 2.2 shall apply as if references to "the satisfaction of the Merger Pre-conditions" were changed to "clearance by the Secretary
of State for Trade and Industry".

	5.8
	If
it becomes reasonably apparent that the ITC will not be providing confirmation on the matters referred to in Merger Pre-condition 1.1 (b) or Merger Condition
2.4(b), each of Granada and Carlton shall co-operate to amend the terms of the Merger in a manner which satisfies any issues raised by the lTC, provided that any such amendments are in
terms reasonably satisfactory to Granada and Carlton. 

6.    TRANSACTION STRUCTURE

	6.1
	It
is proposed that the Merger, by which Granada and Carlton will merge to form a new group under a new holding company
("Alpha"), will be effected by way of inter-conditional court-approved schemes of arrangement of both Granada and Carlton under section 425 of
the Companies Act 1985 (the "Schemes"). However, the Broadcasting Act 1990 (as amended) ("Broadcasting
Act") contains restrictions on the holding of licences by a single person which would be breached by Alpha upon the Merger becoming effective. These restrictions are expected
to be removed by a new Communications Bill which is expected to come into force in the course of 2003. If the Broadcasting Act restrictions have not been removed prior to the date on which it is
proposed that the Merger should become effective, it will be necessary to implement the Merger by stages in order to avoid a breach of those restrictions. The Preliminary Structure Paper describes the
Parties' current understanding of the principal structural steps by which the Merger will be effected in those circumstances. It is acknowledged by both Parties that the Preliminary Structure Paper is
a working draft and as such further amendments and changes (whether for tax, commercial, regulatory or other reasons) may still be required.

	6.2
	The
Parties will agree at the time of the posting of the formal documentation for the Merger whether an offer will be made for the Carlton Preference Shares (as defined in the Press
Announcement) and if so on what terms.

	6.3
	The
provisions of Schedule 4 shall have effect with respect to matters relating to tax. 

7.    TERMINATION

	7.1
	This
Agreement may be terminated and all rights and obligations of Granada and Carlton hereunder shall cease forthwith (save for clauses 3, 4.6, 8 and 12 which shall continue in full
force and effect and any rights and obligations of Granada and Carlton which are in existence at the time of such termination), as follows:

	(a)
	if
agreed in writing between Granada and Carlton at any time before the Effective Date;

	(b)
	by
written notice by either Party (providing the Party serving the notice has not breached the provisions of clause 5 in circumstances which give rise to the right to terminate
this Agreement pursuant to this clause 7.1(b)), if any of the Merger Pre- conditions or the Merger Conditions which has not been waived (if the same is capable of waiver) is (or
becomes) incapable of satisfaction and either Party notifies the other that, notwithstanding that it has the right to waive 

8

 

such
condition, it will not do so, or if any Merger Pre-condition or Merger Condition which is incapable of waiver becomes incapable of satisfaction; 

	(c)
	by
written notice by either Party (providing the Party serving the notice has not breached the provisions of clause 5 in circumstances which give rise to the right to terminate
this Agreement pursuant to this Clause 7.1(c)), if any of the Merger Pre- conditions or the Merger Conditions shall not have been satisfied or waived (as the case may be) by 31
March 2004;

	(d)
	if
any Compensation Payment becomes payable pursuant to clause 3.1, by written notice from the Receiving Party to the Paying Party (as such terms are defined in
clause 3.1); or

	(e)
	by
written notice by either Party following a breach by the other Party of any of the covenants and obligations to be performed by it pursuant to clauses 2.4 and 4.4 provided that (if
the breach is
remediable) such Party has been given such period as is reasonable (not exceeding 30 days) to remedy the same and such breach (or continuing breach) is material in the context of the Merger and
provided further that the Party serving the notice is not then in breach of any of such covenants and obligations to be performed by it which breach is material in the context of the Merger. 

	7.2
	Each
Party hereby undertakes to comply with the provisions of paragraph 4 of the Confidentiality Letter as if they were set out in full herein until the earlier of:

	(a)
	the
Effective Date; and

	(b)
	if
this Agreement is terminated in accordance with its terms, the date falling 90 days after the date of such termination. 

8.    COSTS

        Each
party shall pay its own costs and expenses incidental to this Agreement. 

9.    ANNOUNCEMENTS

	9.1
	Subject
to clause 9.2, prior to the Effective Date, except as may be agreed by Granada and Canton, no announcement or statement shall be made regarding the Merger except on a
joint basis or on terms agreed in advance by Granada and Canton.

	9.2
	The
restriction in clause 9.1 shall not apply.

	(a)
	to
any information which is published by either Party and which consists of or is derived from the Press Announcement, or any shareholder documentation issued by the Parties pursuant
to clause 2.1(b), and which, for the avoidance of doubt, is not new material information; or

	(b)
	to
any announcement or statement required by applicable law, regulation, court order, regulatory authority or the rules of any stock exchange, provided that the Party required to make
such an
announcement or statement will, if practicable, consult the other as to the content and timing of such announcement or statement. 

10.  MISCELLANEOUS

	10.1
	This
Agreement and the documents referred to in it constitute the entire agreement between Granada and Carlton and supersede all other agreements between them with respect to the
Merger (other than the Confidentiality Letter which, except for paragraphs 3 and 5 thereof which are hereby terminated and otherwise provided for in this Agreement, shall remain in full force and
effect). 

9

 
	10.2
	No
failure by either Party in exercising any right, power or privilege under this Agreement shall constitute a waiver by that Party of any such right, power or privilege, nor shall
any single or partial exercise thereof preclude any further exercise of any such right, power or privilege.

	10.3
	A
person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

	10.4
	This
Agreement is personal to the Parties and may not be assigned. 

11.  NOTICES

	11.1
	Any
notice or other communication to be given under this Agreement shall be in writing, shall be deemed to have been duly served on, given to or made in relation to a Party if it is
marked for the attention of the company secretary of such Party and left at the authorised address of that Party, posted by registered post addressed to that Party at such address or sent by facsimile
transmission to a machine situated at such address and shall if:

	(a)
	personally
delivered, be deemed to have been received at the time of delivery;

	(b)
	posted
to an inland address in the United Kingdom, be deemed to have been received on the second business day (being a day on which banks in the City of London are open for business)
after the date of that posting; or

	(c)
	sent
by facsimile transmission, be deemed to have been received upon receipt by the sender of a facsimile transmission report (or other appropriate evidence) that the facsimile has
been transmitted to the addressee, 

provided
that, in the case of delivery by hand or facsimile transmission where, delivery or transmission occurs after 6.00pm on a business day or on a day which is not a business day, receipt shall be
deemed to occur at 9.00am on the next following business day. 

	11.2
	For
the purposes of this clause the authorised address and designated fax number of each Party shall be the address set out below or such other address and number as that Party may
notify to the other in writing from time to time in accordance with the requirements of this clause: 

Granada:    The
London Television Centre, Upper Ground, London SE1 9LT

For the attention of:    The Company Secretary

Fax number:    020 7620 2864 

Carlton:    25
Knightsbridge, London SW1X 7RZ

For the attention of:    The Company Secretary

Fax number:    020 7663 6370 

12.  GOVERNING LAW AND JURISDICTION

	12.1
	This
Agreement shall be governed by, and construed in accordance with, English law.

	12.2
	The
courts of England shall have exclusive jurisdiction to settle any claim, dispute or matter of difference which may arise out of or in connection with this Agreement (including
without limitation claims for set-off or counterclaim) or the legal relationships established by this Agreement.

	12.3
	Each
of the Parties agrees that in the event of any action between the Parties being commenced in respect of this Agreement or any matters arising under it, the process by which it
is commenced, (where consistent with the applicable court rules) may be served on them in accordance with clause 11. 

10

  

 
 

SCHEDULE 1
  
    PRESS ANNOUNCEMENT    
  

11

  

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN. 

	16 OCTOBER 2002	 	FOR IMMEDIATE RELEASE

PART ONE OF TWO  

 
 

GRANADA AND CARLTON MERGER TO PAVE THE WAY FOR A CONSOLIDATED ITV    
  

Summary  

        Carlton and Granada announce an agreed merger, paving the way for a fully consolidated ITV. The new company will be one of the leading commercial broadcasters in
Europe. Together, Granada and Carlton will: 

	•
	Unite
ITV the most popular commercial channel in the UK.

	•
	Create
the largest commercial television production company in Britain.

	•
	Bring
together two of Britain's leading distributors of television programmes and films. 

        Granada
and Carlton have long believed in the vision of creating one ITV. As one company, with one management and one clear focus, the new business will be able to compete more
effectively in the multi-channel world. The Merged Group will be more efficiently managed and will have scale and reach and a strong, distinctive consumer brand. 

        In
addition, the boards of Granada and Carlton believe that the Merger will help to create a virtuous circle of maximising investment in quality programming leading to increased viewing,
generating greater advertising demand and consequently allowing further investment. 

        Carlton
and Granada believe that there will be significant benefits for ITV viewers, advertisers and shareholders and that: 

	•
	Viewers
will benefit from enhanced programming investment designed further to improve quality and choice, with more premieres, more event entertainment, more
dramas and strong regional identity.

	•
	Advertisers
will benefit from the greater ability of the Merged Group to invest in and maximise the value of its programming thereby improving audience share
and commercial impacts, particularly to the key demographic groups. This will allow advertisers to increase the size and efficiency of their reach.

	•
	Shareholders
will benefit from a simpler and clearer structure greater efficiency and lower costs. Shareholders will also benefit from significant synergies
together with the increased scale and cashflow of the Merged Group which will enable it fully to exploit future growth opportunities. The boards of Granada and Carlton believe that these growth
opportunities far outweigh those that would be available to Granada and Carlton separately. 

        Commenting
on today's announcement, Michael Green, Chairman of Carlton, said: 

        "One
ITV has been a vision long in the making. One company, with one management and one focus can now set its sights firmly on beating the opposition and giving viewers and advertisers
what they want. I want this merger to mean great television programmes and the strongest possible schedule. We must make sure that it does just that." 

12

 

        Commenting
on today's announcement, Charles Allen, Chairman of Granada, said: 

        "This
deal means that viewers will see more high quality, original drama, more film premieres and more entertainment events on ITV than ever before. Great programmes that attract mass
audiences are key to driving ITV's success. We'll work in partnership with our advertisers to use the full power of ITV to drive their brands and businesses. For shareholders, this deal offers fair
value now and the opportunity to benefit from increased efficiencies from a strengthened and more focused ITV." 

        The
following sets out further details of the Merger: 

	•
	The
Merger is conditional on clearance by the competition authorities and the ITC and will be effected once those clearances have been obtained. If
regulatory clearances for the Merger are obtained sufficiently in advance of the Communications Act coming into force, it is intended that the Merger would be effected in two stages, stage one being
an interim structure that would comply with current broadcasting legislation. Carlton and Granada will be discussing with the regulators appropriate arrangements for the sale of airtime by the Merged
Group which. to the extent necessary, may extend to a separate sales organisation.

	•
	Granada
shareholders will receive 68 per cent. of the ordinary share capital of the Merged Group and £200 million of cash upon completion
of the Merger. Carlton Ordinary shareholders will, upon completion of the Merger, receive 32 per cent. of the ordinary share capital of the Merged Group, potentially increasing to 34 per cent. in 2006
dependent on the achievement of a share price of ordinary shares of the Merged Group equivalent to 140 pence per Granada Share (implying the achievement of a Carlton Ordinary Share price equivalent to
271 pence) and on achievement of an agreed earnings target for the year ending September 2005. This will be achieved through the issue of Convertible Shares to Carlton Ordinary shareholders
upon completion of the Merger.

	•
	Granada
Shareholders will receive one ordinary share in the Merged Group and 7.225 pence in cash for every Granada Share currently held. Carlton Ordinary
Shareholders will receive 1.9386 ordinary shares in the Merged Group and 0.1835 Convertible Shares for every Carlton Ordinary Share currently held.

	•
	Granada
and Carlton intend to pay final dividends for the year ended 30 September 2002 of 1.0 pence per share and 5.0 pence per share, respectively.

	•
	Based
on closing prices as at 10 October 2002, the day before the announcement that Carlton and Granada were in advanced merger discussions, the
Merged Group's pro forma market capitalisation would have been approximately £2.6 billion, before taking into account the potential for synergy benefits or any cash payment to
Granada Shareholders.

	•
	The
Merged Group is expected to benefit from significant synergies principally from plc structures and duplicated infrastructure and administration in
broadcasting, content and central services. It is estimated that by the end of the first full financial year of operations, excluding any benefits from combining airtime sales activities, the Merged
Group will be capable of achieving savings of £35 million per annum. The one off cost of achieving these benefits is estimated to be approximately £40 million.
The boards of Granada and Carlton believe a further £20 million of savings is achievable on full merger, and the one off cost of achieving these benefits is estimated to be
approximately £15 million. Of the total one off costs of £55 million, approximately £9 million relate to non cash costs.

	•
	Following
completion. Michael Green will become Chairman of the Merged Group and Charles Allen will become Chief Executive. In addition, the
non-executive directors from each company will join the board of the Merged Group. 

        This
summary should be read in conjunction with the full text of the following announcement. Appendix I contains a summary of the key terms of the Convertible Shares.
Appendix II contains the 

13

 

pre-conditions and conditions to the Schemes and to the Merger. Appendix III contains the definitions of terms used in this announcement. 

        There
will be a meeting for analysts at 9.30am today at the City Presentation Centre, 4 Chiswell Street, London EC1. 

	ENQUIRIES

Granada

Charles Allen

Henry Staunton

Graham Parrott

Susan Donovan	 	Tel: 020 7620 1620
	
Carlton

Michael Green

Gerry Murphy

Paul Murray

John Rudofsky	
 	

Tel: 020 7663 6363
	
Lazard

(Financial Advisers to Granada)

Nicholas Scott

Edward Mason	
 	

Tel: 020 7588 2721
	
UBS Warburg

(Financial Advisers to Carlton)

Robin Budenberg

Simon Warshaw

Jonathan Bewes	
 	

Tel: 020 7567 8000
	
Citigate Dewe Rogerson

(BR for Granada)

Jonathan Clare

Simon Rigby

Chris Barrie	
 	

Tel: 020 7638 9571
	
Finsbury

(PR for Carlton)

Roland Rudd

James Leviton	
 	

Tel: 020 7251 3801

        Hoare
Govett Limited and Credit Suisse First Boston (Europe) Limited are acting as corporate brokers to Granada. UBS Warburg and Cazenove & Co. Ltd are acting as corporate
brokers to Carlton. 

        Lazard is acting for Granada in connection with the Merger and no-one else and will not be responsible to anyone other than Granada for providing the
protections offered to clients of Lazard nor for providing advice in relation to the Merger.

        UBS Warburg is acting for Carlton in connection with the Merger and no-one else and will not be responsible to anyone other than Carlton for providing
the protections offered to clients of UBS Warburg nor for providing advice in relation to the Merger.

        No offer or invitation to acquire or exchange securities in Granada or Carlton is being made now. Any such offer or invitation will only be made in documents to
be published in due course and any such acquisition or exchange should be made solely on the basis of information contained in such documents.

14

 

        This document is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an
exemption from registration. The relevant clearances have not been and will not be obtained from the relevant authorities in Canada, Australia or Japan. Accordingly, such securities may not be
offered, sold or delivered, directly or indirectly, in or into such jurisdictions except pursuant to exceptions from applicable requirements of such jurisdictions.

FORWARD LOOKING STATEMENTS  

        DISCLOSURE NOTICE: The information contained in this press release is as of 16 October 2002. Nothing in this document should be
construed as a profit forecast or be interpreted to mean that the earnings per share of the Merged Group will necessarily be greater than the historical earnings per share of Granada and Carlton.
Granada and Carlton assume no obligation to update any forward looking statements contained in this press release as a result of new information or future events or
developments.

        In order to utilise the "Safe Harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, Granada and Carlton are providing the
following cautionary statement: This document contains certain statements that are or may be forward-looking with respect of the terms and conditions of the Merger, regulatory clearance of the Merger,
revenues, dividends, cost savings and other synergies, the impact on earnings, the financial condition, results of operations and business of Granada, Carlton and the Merged Group and certain of their
plans and objectives. In particular, among other statements, certain statements in "Reasons for and Benefits of the Merger", "Dividends", "Current Trading and Prospects" and "Details of the Merger"
are or may be forward-looking in nature. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors
include but are not limited to, statements made elsewhere in the press release, as well as (i) the ability of Granada and Carlton to integrate their businesses, achieve cost savings and realise
other synergies, (ii) difficulties in obtaining regulatory clearance for the Merger, (iii) adverse changes in tax laws and regulations, (iv) the risks associated with the
introduction of new products or services, (v) pricing, product and programmes initiatives or competitors, including increased competition of programmes such as major sporting events,
(vi) changes in technology or consumer demand, (vii) the termination or delay of key
contracts and (viii) fluctuations in exchange rates. A further description of certain of these risks, uncertainties and other matters can be found in Item 3.B, "Key Information—Risk
Factors" included in Carlton's Annual Report on Form 10-F for the fiscal year ended 30 September 2001, filed with the United States Securities and Exchange Commission
(Commission file number: 0-15252).

15

  

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN. 

	16 OCTOBER 2002	 	FOR IMMEDIATE RELEASE

PART TWO OF TWO  

 
 

GRANADA AND CARLTON MERGER TO PAVE THE WAY FOR A CONSOLIDATED ITV    
  

Introduction  

        Carlton and Granada announce an agreed merger, paving the way for a fully consolidated ITV. The new company will be one of the leading commercial broadcasters in
Europe. Together, Granada and Carlton will: 

	•
	Unite
ITV, the most popular commercial channel in the UK.

	•
	Create
the largest commercial television production company in Britain.

	•
	Bring
together two of Britain's leading distributors of television programmes and films. 

        Granada
Shareholders will receive 68 per cent. of the ordinary share capital of the Merged Group and £200 million of cash upon completion of the Merger. Carlton
Ordinary Shareholders will, upon completion of the Merger, receive 32 per cent. of the ordinary share capital of the Merged Group, potentially increasing to 34 per cent. in 2006 dependent on the
achievement of a share price of the ordinary shares of the Merged Group equivalent to 140 pence per Granada Share (implying the achievement of a Carlton Ordinary Share price equivalent to 271 pence)
and on achievement of an agreed earnings target for the year ending September 2005. This will be achieved through the issue of Convertible Shares to Carlton Ordinary Shareholders upon
completion of the Merger. 

        The
Merger, which will be subject to the pre-conditions and the conditions and further terms set out or referred to in Appendix II and to be set out in the Merger
Documentation, will be made on the following bases: 

	For each Granada Share	 	1 ordinary share in the Merged Group
	

For each Carlton Ordinary Share	
 	

1.9386 ordinary shares in the Merged Group and 0.1835 Convertible Shares

        In
addition, Granada Shareholders will receive £200 million in cash on completion of the Merger, equivalent to 7.225 pence in cash for every Granada Share. 

        A
summary of the key terms of the Convertible Shares is set out in Appendix 1. 

        Appropriate
proposals will be made to Carlton Preference Shareholders upon posting of the Merger Documentation. 

Reasons for and Benefits of the Merger  

        Granada and Carlton have long believed in the vision of creating one ITV. As one company, with one management and one clear focus, the new business will be able
to compete more effectively in the multi-channel world. The Merged Group will be more efficiently managed and will have scale and reach and a strong, distinctive consumer brand. 

        In
addition, the boards of Granada and Carlton believe that the Merger will help to create a virtuous circle of maximising investment in quality programming leading to increased viewing,
generating greater advertising demand and consequently allowing further investment. 

16

 

        Carlton
and Granada believe that there will be significant benefits for ITV viewers, advertisers and shareholders and that: 

	•
	Viewers
will benefit from enhanced programming investment designed further to improve quality and choice, with more premieres, more event entertainment, more
dramas and strong regional identity.

	•
	Advertisers
will benefit from the greater ability of the Merged Group to invest in and maximise the value of its programming thereby improving audience share
and commercial impacts, particularly to the key demographic groups. This will allow advertisers to increase the size and efficiency of their reach.

	•
	Shareholders
will benefit from a simpler and clearer structure, greater efficiency and lower costs. Shareholders will also benefit from significant synergies
together with the increased scale and cashflow of the Merged Group which will enable it fully to exploit future growth opportunities. The boards of Granada and Carlton believe that these growth
opportunities far outweigh those that would be available to Granada and Carlton separately. 

        The
Merged Group is expected to benefit from significant synergies principally from plc structures and duplicated infrastructure and administration in broadcasting, content and central
services. It is estimated that by the end of the first full financial year of operations, excluding any benefits from combining airtime sales activities, the Merged Group will be capable of
achieving savings of £35 million per annum. The one off cost of achieving these benefits is estimated to be approximately £40 million. The boards of Granada and
Carlton believe a further £20 million of savings is achievable on full merger, and the one off cost of achieving these benefits is estimated to be approximately
£15 million. Of the total one off costs of £55 million, approximately £9 million relate to non cash costs. 

Management  

        Following completion, Michael Green will become Chairman of the Merged Group and Charles Allen will become Chief Executive. In addition, three
non-executive directors from each company will join the board of the Merged Group. 

Dividends  

        In respect of final dividends declared for the year ending 30 September 2002, Granada Shareholders and Carlton Shareholders will receive their respective
entitlements. 

        Granada
intends to pay a final dividend of 1 pence per Granada Share and Carlton intends to pay a final dividend of 5 pence per Carlton Ordinary Share. The payment date for these
dividends would be in April 2003. 

Information on Granada  

        Granada is one of Europe's major commercial broadcasters and content creators and distributors. It owns seven of ITV's UK free-to-air
broadcasting franchises, stretching from the Granada region in the North West to Meridian in the South East and reaching over 15 million homes. In 2001, Granada generated around
£500 million from contents sales to UK and international broadcasters. Granada's content business makes many of ITV's top-rating programmes including  Coronation Street, Emmerdale, I'm a Celebrity: Get Me out of
Here and Pop Stars: The Rivals. Granada also makes some of the most acclaimed programmes for other UK broadcasters, including  The Royle
Family for BBC1 and Elizabeth and Six Wives of Henry
VIII for Channel 4. Internationally, Granada has production and distribution operations making and selling programmes and formats to broadcasters around the world. Granada has
stakes in commercial broadcasters in Ireland and Australia, interests in new media enterprises and owns 50 per cent. of Boxclever, the UK's leading TV and video rental chain. 

17

 

        Summary
financial information, excluding discontinued activities and exceptional items, as extracted from Granada's result for the year ended 30 September 2001 and for the six
months to 31 March 2002 is set out in the table below: 

	 
	 	Year to

30 September 2001
	 	Six months to

31 March 2002

	Group turnover	 	£1,486m	 	£713m
	Profit before tax	 	£175m	 	£43m
	Adjusted basic earnings per share before goodwill amortisation	 	5.9p	 	1.7p
	Net assets	 	£2,087m	 	£1.858m

	Note:	 	The results for the year ended 30 September 2001 exclude digital media. The results for the six months to 31 March 2002 are stated after a loss before tax of £16 million on continuing digital
businesses.

Information on Carlton  

        Carlton is a leading UK media company with businesses in broadcasting and advertising sales, content production and distribution and cinema advertising. 

        Carlton
holds four ITV licences—Carlton London, Carlton Central, Carlton Westcountry and HTV—which broadcast to approximately 26 million people. The
company also sells advertising in cinemas across the UK, US and Europe. 

        In
2001, Carlton invested approximately £200 million in making programmes in the UK and the US. Carlton is one of the largest programme distributors in Europe, with
over 18,000 hours of television programmes, and it has one of the largest collections of English language films outside of Hollywood. 

        Summary
financial information excluding discontinued operations as extracted from Carlton's results for the six months to 31 March 2002 (which includes the results for the year to
30 September 2001) is set out in the table below: 

	 
	 	Year to

30 September 2001
	 	Six months to

31 March 2002

	Group turnover	 	£1,040m	 	£503m
	Profit before tax and exceptional operating costs	 	£13m	 	£7m
	Adjusted basic earnings per share before goodwill amortisation	 	1.9p	 	1.1p
	Net assets	 	£664m	 	£453m

Current Trading and Prospects  

Granada  

        Granada's advertising revenues have seen year on year improvements since May this year. For the second half of Granada's financial year ending on 30
September 2002, advertising revenue will be up over 3 per cent. on the same period last year and the results for the year as a whole are expected to be satisfactory given current market
conditions. At the financial year end Granada win have net cash on the balance sheet. 

        ITV
viewing shares have risen over the autumn as we have increased the network's investment in the schedule, and the ratecard weighted share of commercial impacts over the five weeks
since the beginning of September is 45 per cent. 

        The
ITV network budget has been increased from £775 million in 2002 to £836 million for calendar 2003 and ITV's new marketing and scheduling
strategies have been presented to our major advertisers. 

18

 

        Granada's
production business has reduced turnover in the year as some low margin and high volume contracts terminated, though as a result profitability has been less affected. 

        ITV2
has performed very strongly with revenues and viewing share well ahead of last year and regularly features in the top 10 commercial channels by viewing share. 

Carlton  

        Carlton's results for the year ended 30 September 2002 are expected to be satisfactory given current market conditions. 

        Since
May 2002. Carlton's advertising revenues have grown each month in comparison with the previous year. 

        An
increased investment in ITV's network programmes has already contributed to an improvement in ITV's audiences, particularly in peak time. A further increase in investment in network
programmes has been approved for 2003 and has been presented to advertisers with positive responses. 

        Carlton
Content's turnover has been affected by delays in commissioning earlier in the year but has won substantial [ne\y] business in the last quarter of 2002
relating to programmes for 2003. 

        Carlton's
net debt at 30 September 2002 was similar to that at 30 September 2001 and net interest charges have benefited from low US rates. 

Details of the Merger  

        The Merger is expected to be effected by way of inter-conditional court approved schemes of arrangement of both Carlton and Granada under section 425 of
the Act. Under the Schemes, Granada Shareholders and Carlton Ordinary Shareholders will receive shares in a new holding company and cash on the following bases: 

	For each Granada Share	 	1 ordinary share in the Merged Group
	

For each Carlton Ordinary Share	
 	

1.9386 ordinary shares in the Merged Group and 0.1835 Convertible Shares

        In addition. Granada Shareholders will receive £200 million in cash on completion of the Merger, equivalent. to 7.225 pence in cash for every
Granada Share. 

        A
summary of the key terms of the Convertible Shares is set out in Appendix 1. 

        Appropriate
proposals will be made to Carlton Preference Shareholders upon posting of the Merger Documentation. 

        The
Merger will be subject to the pre-conditions and conditions set out in Appendix II, including the approval of both Carlton Ordinary Shareholders and Granada
Shareholders, the sanction of the Schemes by the Court and satisfaction of certain regulatory pre-conditions and conditions. 

        The
Schemes will operate in a similar way to each other and will become effective on the same day. The Granada Scheme will require approval by special resolution of Granada Shareholders
at an extraordinary general meeting of Granada. The Granada Scheme will also require approval separately by a majority in number representing 75 per cent. in value of the holders of Granada Shares who
vote at a meeting convened by the Court. The Carlton Scheme will require similar approvals by Carlton Ordinary Shareholders. In addition, each Scheme is required to be sanctioned by the Court. The
Schemes can only become effective when all conditions to the Merger have been satisfied or waived. 

        Under
the Broadcasting Act no person is permitted to have a UK audience share of more than 15 per cent. through holding television broadcasting licences. In addition, no single entity is
allowed to hold the 

19

 

two London licences or more than 20 per cent. of ITN. These rules are expected to be removed by the Communications Act which is expected to be enacted in 2003. 

        If
regulatory clearances for the Merger are obtained sufficiently in advance of the Communications Act coming into force, it is intended that the Merger would be effected in two stages
to ensure compliance with the Broadcasting Act. The first stage would involve the merger of Carlton and Granada as described above, with the Carlton broadcasting licences and its interest in ITN being
held by a separate company. This company would be established with an independent board and management structure and its shares would effectively be held by Granada Shareholders and Carlton Ordinary
Shareholders in the same relative proportions to their shareholdings in the Merged Group. The shares in this separate company would be stapled to the ordinary shares in the Merged Group and would only
be transferable in conjunction with a transfer of ordinary shares in the Merged Group. This company would also issue convertible shares with similar terms to the Convertible Shares which would be
stapled to the Convertible Shares and would only be transferable or convertible in conjunction with a transfer or conversion (as applicable) of the Convertible Shares. The second stage would involve
the combination of the Merged Group and this separate company's businesses when the Communications Act comes into force. 

        Granada
and Carlton will be discussing with the regulators appropriate arrangements for the sale of airtime by the Merged Group which, to the extent necessary, may extend to a separate
sales organisation. 

        Pursuant
to the Merger Agreement, Carlton and Granada have agreed that one party shall make a payment of £8.5 million to the other in certain circumstances, including
where the Merger lapses or is withdrawn following certain specified events. 

Employees and Share Schemes  

        The boards of Granada and Carlton have confirmed that the existing employment rights, including accrued pension rights, of the employees of Granada and Carlton
will be fully safeguarded following completion of the Merger. 

        Appropriate
proposals will be made in due course to participants in the Carlton Share Schemes and Granada Share Schemes. 

Settlement, Listing and Dealings  

        Applications will be made to the UK Listing Authority and to the London Stock Exchange for ordinary shares in the Merged Group and the Convertible Shares to be
issued under the Merger to be admitted to the Official List and to trading on the London Stock Exchange, respectively. Certificates for ordinary shares in the Merged Group and Convertible Shares will
be despatched to Granada Shareholders and Carlton Ordinary Shareholders (as appropriate) who hold their shares in certificated form (i.e. not in CREST) no later than 14 days after the effective
date of the Merger. For Granada Shareholders and Carlton Ordinary Shareholders who hold their shares in uncertificated form (i.e. in CREST). the ordinary shares in the Merged Group and Convertible
Shares receivable in accordance with the Schemes are expected to be credited to CREST accounts (as appropriate) no later than 14 days after the effective date of the Merger. 

        Further
details on settlement, listing and dealing will be included in the Merger Documentation. 

General  

        It is expected that the Merger Documentation will be despatched to Carlton Shareholders and Granada Shareholders following satisfaction or waiver of the
pre-conditions set out in paragraph 1 of Appendix II hereto. This documentation will include the notices of the meetings of the Granada Shareholders and Carlton Shareholders,
full details of the Schemes and the Merger and listing particulars 

20

 

relating to the Merged Group. Furthermore it will specify the necessary actions to be taken by Granada Shareholders and Carlton Shareholders. 

Recommendations  

        The Merger has the unanimous support and recommendation of the boards of both Granada and Carlton. 

        The
Granada directors, who have been so advised by Lazard, consider the Merger to be in the best interests of Granada. In giving its advice, Lazard has taken into account the Granada
directors' commercial assessment of the Merger. Accordingly, the Granada directors intend to recommend that Granada Shareholders vote in favour of the resolutions to be proposed at the Court convened
meeting and extraordinary general meetings of Granada as they intend to do in respect of their own beneficial holdings. 

        The
Carlton directors, who have been so advised by UBS Warburg, consider the Merger to be in the best interests of the Carlton. In giving its advice, UBS Warburg has taken into account
the Carlton directors' commercial assessment of the Merger. Accordingly, the Carlton directors intend to recommend that Carlton Shareholders vote in favour of the resolutions to be proposed at the
Court convened meeting and extraordinary general meetings of Carlton as they intend to do in respect of their own beneficial holdings. 

	ENQUIRIES

Granada

Charles Allen

Henry Staunton

Graham Parrott

Susan Donovan	 	Tel: 020 7620 1620
	
Carlton

Michael Green

Gerry Murphy

Paul Murray

John Rudofsky	
 	

Tel: 020 7663 6363
	
Lazard

(Financial Advisers to Granada)

Nicholas Scott

Edward Mason	
 	

Tel: 020 7588 2721
	
UBS Warburg

(Financial Advisers to Carlton)

Robin Budenberg

Simon Warshaw

Jonathan Bewes	
 	

Tel: 020 7567 8000
	
Citigate Dewe Rogerson

(BR for Granada)

Jonathan Clare

Simon Rigby

Chris Barrie	
 	

Tel: 020 7638 9571
	
Finsbury

(PR for Carlton)

Roland Rudd

James Leviton	
 	

Tel: 020 7251 3801

21

 

        Hoare Govett Limited and Credit Suisse First Boston are acting as corporate brokers to Granada. UBS Warburg and Cazenove & Co. Ltd are acting as
corporate brokers to Carlton. 

        Lazard is acting for Granada in connection with the Merger and no-one else and will not be responsible to anyone other than Granada for providing the
protections offered to clients of Lazard nor for providing advice in relation to the Merger.

        UBS Warburg is acting for Carlton in connection with the Merger and no-one else and will not be responsible to anyone, other than Carlton for
providing the protections offered to clients of UBS Warburg nor for providing advice in relation to the Merger.

        No offer or invitation to acquire or exchange securities in Granada or Carlton is being made now. Any such offer or invitation will only be made in documents to
be published in due course and any such acquisition or exchange should be made solely on the basis of information contained in such documents.

        This document is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an
exemption from registration. The relevant clearances have not been and will not be obtained from the relevant authorities in Canada, Australia or Japan. Accordingly, such securities may not be
offered, sold or delivered, directly or indirectly, in or into such jurisdictions except pursuant to exceptions from applicable requirements or such jurisdictions.

FORWARD LOOKING STATEMENTS  

        DISCLOSURE NOTICE: The information contained in this press release is as of 16 October 2002. Nothing in this document should be
construed as a profit forecast or be interpreted to mean that the earnings per share of the Merged Group will necessarily be greater than the historical earnings per share of Granada and Carlton.
Granada and Carlton assume no obligation to update any forward-looking statements contained in this press release as a result of new information or future events or
developments.

        In order to utilise the "Safe Harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, Granada and Carlton are providing the
following cautionary statement: This document contains certain
statements that are or may be forward-looking with respect of the terms and conditions of the Merger, regulatory clearance of the Merger, revenues, dividends, cost savings and other synergies, the
impact on earnings, the financial condition, results of operations and business of Granada, Carlton and the Merged Group and certain of their plans and objectives. In particular, among other
statements, certain statements in "Reasons for and Benefits of the Merger", "Dividends", "Current Trading and Prospects" and "Details of the Merger" are or may be forward-looking in nature. By their
nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause
actual results and development to differ materially from those expressed or implied by such forward-looking statements. These factors include but are not limited to, statements made elsewhere in the
press release, as well as (i) the ability of Granada and Carlton to integrate their businesses, achieve cost savings and realise other synergies, (ii) difficulties in obtaining
regulatory clearance for the Mergers, (iii) adverse changes in tax laws and regulations, (iv) the risks associated with the introduction of new products or services, (v) pricing,
product and programmes initiatives or competitors, including increased competition of programmes such as major sporting events, (vi) changes in technology or consumer demand, (vii) the
termination or delay of key contracts and (viii) fluctuations in exchange rates. A further description of certain of these risks, uncertainties and other matters can be found in item 3.B, "Key
Information—Risk Factors" included in Carlton's Annual Report on Form 20-F for the fiscal year ended 30 September 2001, filed with the United States Securities
and Exchange Commission (Commission file number: 0-15252).

22

  

 
 

APPENDIX I
  
    SUMMARY OF THE KEY TERMS OF THE CONVERTIBLE SHARES    
  

	1.
	The
Convertible Shares will be issued credited as fully paid up on the effective date of the Merger.

	2.
	The
Convertible Shares will not carry any voting rights or any right to receive notice of or to attend general meetings of the Merged Group (save in relation to any variation of their
rights as a class), any right to receive dividends or other distributions or any right to capital save for a right to the return of the nominal value of the Convertible Shares on a winding up of the
Merged Group.

	3.
	The
Convertible Shares will automatically convert into ordinary shares in the Merged Group on 1 January 2006 provided that the following conditions have been satisfied:

	(A)
	the
closing middle market price of an ordinary share in the Merged Group on at least 60 of the 90 trading days up to (but not including) 1 January 2006 exceeds 140
pence; and

	(B)
	the
Merged Group's consolidated, pre-exceptional (as that term is defined in paragraph 20 of FRS 3), pre-goodwill amortisation,
post-tax (with tax effects of exceptional items written back), basic earnings per ordinary share for the year ending 30 September 2005 (calculated on a basis consistent with UK GAAP
as at the date of this announcement and in accordance with the accounting principles and policies as disclosed by Granada and Carlton in their statutory accounts for the year ended 30
September 2002 and, for the avoidance of doubt, any profit and loss charges or credits arising from the adoption of FRS 17 shall be ignored) are equal to or greater than 6.26 pence. 

The
Merged Group's auditors will certify the earnings per share figure for the purposes of sub-paragraph (B). 

	4.
	On
conversion, subject to paragraph 5 below, each Convertible Share will convert into one ordinary share in the Merged Group.

	5.
	The
terms of the Convertible Shares will be adjusted to take account of certain events, including:

	(A)
	the
consolidation, sub-division, cancellation or re-classification of the ordinary share capital of the Merged Group;

	(B)
	capitalisation
and bonus issues;

	(C)
	offers
of shares to existing shareholders by way of rights;

	(D)
	payment
of special or abnormal dividends by the Merged Group; and

	(E)
	any
demerger of part of the business of the Merged Group. 

	6.
	In
the event that prior to 1 January 2006, an offer is made to acquire the whole or any part of the ordinary share capital of the Merged Group or if any person proposes a scheme
of arrangement with regard to such acquisition and, in either case, the right to cast more than 50 per cent. of the votes which may ordinarily be cast on a poll at a general meeting of the Merged
Group vests in a third party (whether before or after January 2006), the following provisions shall apply:

	(A)
	if
the value of the consideration payable under such acquisition per ordinary share in the Merged Group (calculated on the day that the acquisition becomes wholly unconditional or is
effected) (the "Offer Price") is less than 70 pence, the conversion rights attaching to the Convertible Shares will lapse and the provisions of paragraph 8 shall apply; 

23

 

	(B)
	if
the Offer Price is 70 pence or more but less than 140 pence, each Convertible Share will automatically convert into that number of ordinary shares in the Merged Group calculated in
accordance with the following formula: 

A × (B-70)/70

Where: 

A
= the number of ordinary shares in the Merged Group into which a Convertible Share converts at that time 

B
= the Offer Price 

and
the provisions of paragraph 7 will apply to such conversion; and 

	(C)
	if
the Offer Price is 140 pence or greater, the Convertible Shares will automatically convert on the basis of the then current conversion ratio and the provisions of
paragraph 7 will apply to such conversion. 

	7.
	No
fractions of ordinary shares in the Merged Group will be issued on conversion of any Convertible Shares and any fractional entitlements arising on conversion will be disposed of by
the Merged Group and the net proceeds of sale paid to those entitled thereto.

	8.
	If
conversion does not take place on 1 January 2006, the conversion rights attaching to the Convertible Shares will lapse and the Convertible Shares will be automatically
re-designated into deferred shares which will be subject to compulsory transfer to a custodian.

	9.
	It
is intended that the Convertible Shares will be admitted to the Official List. 

24

  

 
 

APPENDIX II
  
    PRE-CONDITIONS AND CONDITIONS TO THE SCHEMES AND TO THE MERGER    
  

1.    PRE-CONDITIONS  

	1.1
	The
posting of final documentation relating to the Merger will only take place if the following pre-conditions are satisfied or waived:

	(a)
	it
being established, in terms reasonably satisfactory to Carlton and Granada and without any amendments, assurances, conditions or undertakings being required that are not reasonably
satisfactory to Carlton and Granada, that the Merger or any matter arising from the Merger will not be referred to the Competition Commission or, in the event that the Merger or any matter arising
from the Merger is referred to the Competition Commission, it being established, in terms reasonably satisfactory to Carlton and Granada, that the Merger may proceed without requiring any amendments,
assurances, conditions or undertakings that are not reasonably satisfactory to Carlton and Granada and to the extent that any such amendments, assurances, conditions, or undertakings are required to
be satisfied prior to completion of the Merger, that they have been so satisfied;

	(b)
	so
far as may be necessary in order to effect the Merger, the ITC indicating in terms reasonably satisfactory to Carlton and Granada that, as a result of the Merger, the ITC will not:

	(i)
	suspend
or revoke any licence issued by it under the Broadcasting Acts 1990 and/or 1996 currently held by any member of the Carlton Group or the Granada
Group (each a "Licence"); or

	(ii)
	require
the holder of any Licence to take any action in connection therewith which would have a material adverse affect on the Merged Group taken as a
whole; and 

	(c)
	Carlton
and Granada being satisfied, for the purposes of the requirements of the UK Listing Authority, that the necessary financing facilities will be available on reasonable market
terms following completion of the Merger to provide for the working capital requirements of the Merged Group. 

	1.2
	Carlton
and Granada may, acting together, waive any or all of these pre-conditions, in whole or in part. 

2.    CONDITIONS

	2.1
	The
Merger will be conditional upon the Granada Scheme and the Carlton Scheme becoming unconditional and effective by 31 March 2004 or such later date as Granada, Carlton and
the Court may agree.

	2.2
	The
Granada Scheme will be conditional upon

	(a)
	the
approval by a majority in number representing not less than three-fourths in value of the holders of Granada Shares present and voting either in person or by proxy at the Granada
Court Meeting;

	(b)
	any
resolution required to approve and implement the Granada Scheme and the Merger being passed at the Granada Extraordinary General Meeting;

	(c)
	(i) the
sanction of the Granada Scheme (with or without modification) and confirmation of any reduction of capital involved therein by the Court and (ii) an office copy
of the Order of the Court being delivered for registration to the Registrar of Companies in England and Wales and the Order confirming any reduction of capital involved in the Granada Scheme being
registered by him; 

25

 

	(d)
	the
conditions set out in paragraphs 2.3 (a), (b) and (c)(i) below being satisfied; and

	(e)
	the
ordinary shares in the Merged Group being admitted (i) to the Official List and such admission becoming effective in accordance with the Listing Rules and (ii) to
trading on the London Stock Exchange's market for listed securities and such admission becoming effective in accordance with the Standards or (subject to the consent of the Panel) the UK Listing
Authority and the London Stock Exchange agreeing to admit such shares to listing and trading respectively. 

	2.3
	The
Carlton Scheme will be conditional upon:

	(a)
	the
approval by a majority in number representing not less than three-fourths in value of the holders of Carlton Ordinary Shares present and voting either in person or by proxy at the
Carlton Court Meeting;

	(b)
	any
resolution required to approve and implement the Carlton Scheme and the Merger being passed at the Carlton Extraordinary General Meeting;

	(c)
	(i) the
sanction of the Carlton Scheme (with or without modification) and confirmation of any reduction of capital involved therein by the Court and (ii) an office copy
of the Order of the Court being delivered for registration to the Registrar of Companies in England and Wales and the Order confirming any reduction of capital of Carlton involved in the Carlton
Scheme being registered by him;

	(d)
	the
conditions set out in paragraph 2.2 (a), (b) and (c)(i) above being satisfied; and

	(e)
	the
ordinary shares in the Merged Group being admitted (i) to the Official List and such admission becoming effective in accordance with the Listing Rules and (ii) to
trading on the London Stock Exchange's market for listed securities and such admission becoming effective in accordance with the Standards or (subject to the consent of the Panel) the UK Listing
Authority and the London Stock Exchange agreeing to admit such shares to listing and trading respectively. 

	2.4
	Granada
and Carlton have agreed that, subject as stated in paragraph 3 below, the Merger will also be conditional upon the following matters and accordingly the necessary
action to make the Granada Scheme and the Carlton Scheme effective will only be taken if the following conditions are satisfied or waived in accordance with paragraph 3 below;

	(a)
	in
the event that pre-condition 1.1(a) is waived:

	(i)
	it
being established, in terms reasonably satisfactory to Carlton and Granada and without any amendments, assurances, conditions or undertakings being
required that are not reasonably satisfactory to Carlton and Granada, that the Merger or any matter arising from the Merger will not be referred to the Competition Commission; or

	(ii)
	in
the event that the Merger or any manner arising from the Merger is referred to the Competition Commission, it being established, in terms reasonably
satisfactory to Carlton and Granada, that the Merger may proceed without requiring any amendments, assurances, conditions or undertakings that are not reasonably satisfactory to Carlton and Granada
and to the extent that any such amendments, assurances, conditions, or undertakings are required to be satisfied prior to completion of the Merger, that they have been so satisfied; 

	(b)
	in
the event that pre-condition 1.1(b) is waived and so far as may be necessary in order to effect the Merger, the ITC indicating in terms reasonably satisfactory to
Granada and Carlton that, as a result of the Merger, the ITC will not:

	(i)
	suspend
or revoke any Licence; or

	(ii)
	require
the holder of any Licence to take any action in connection therewith which would have a material adverse effect on the Merged Group taken as a
whole. 

26

 

	(c)
	the
Convertible Shares being admitted (i) to the Official List and such admission becoming effective in accordance with the Listing Rules and (ii) to trading on the
London Stock Exchange's market for listed securities and such admission becoming effective in accordance with the Standards or (if Carlton so determines and subject to the consent of the Panel) the UK
Listing Authority and the London Stock Exchange agreeing to admit such shares to listing and trading respectively;

	(d)
	if
the Carlton Preference Scheme is proposed, the sanction of the Carlton Preference Scheme (with or without modification) and confirmation of any reduction of capital involved
therein by the Court and an office copy of the Order of the Court being delivered for registration to the Registrar of Companies in England and Wales and the Order confirming any reduction of capital
involved in the Carlton Preference Scheme being registered by him save where the failure to obtain such sanction and confirmation would not be reasonably likely to have a material adverse effect on
the Merged Group;

	(e)
	the
Merger Agreement not having been terminated in accordance with its terms;

	(f)
	tax
clearances (under section 138 of the Taxation of Chargeable Gains Act 1992 and section 707 of the Income and Corporation Taxes Act 1988 in respect of the Merger (or
stage one thereof if it occurs in two stages) and under section 139(5) in respect of stage one of the Merger (if applicable) being obtained in a form satisfactory to Granada and Carlton;

	(g)
	the
expiry or earlier termination of all applicable waiting periods (including any voluntary extensions thereof) under the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the regulations made thereunder;

	(h)
	all
Authorisations necessary and material in the context of the Merged Group for or in respect of the Merger and the implementation of the Schemes having been obtained in terms and in
a form reasonably satisfactory to Granada and Carlton and, where the absence or withdrawal of any such Authorisations would, in the reasonable opinion of Granada and Carlton have a material adverse
effect on the Merged Group, all such Authorisations remaining in full force and effect and there having been no intimation of any intention to revoke or not renew any of them and all necessary waiting
periods (including any extension thereof) under any applicable legislation or regulation of any jurisdiction having expired or been terminated (as appropriate) and all necessary statutory and
regulatory obligations in connection with the Merger in any jurisdiction have been complied with;

	(i)
	there
being no provision of any arrangement, agreement, licence or other instrument to which any member of the Wider Granada Group or the Wider Carlton Group is a party or by or to
which any such member may be bound or be subject (save for any arrangement, agreement, licence or other instrument granted by the ITC or the OFT, or to which the ITC or the OFT is a party) which would
or might in the opinion of Granada or Carlton (acting reasonably) as a consequence of the Merger or the Schemes and to an extent which is material in the context of the Merged Group result in:

	(i)
	any
monies borrowed by, or any other indebtedness of, any member of the Wider Granada Group or the Wider Carlton Group being repayable or capable of
being declared repayable prior to their stated maturity; or

	(ii)
	any
such arrangement, agreement, licence or other instrument, or the rights, liabilities, obligations or interests of any member of the Wider Granada
Group or the Wider Carlton Group, being or becoming capable of being terminated or adversely modified or affected. 

in
each case as a consequence of the Merger or the Schemes and save as disclosed by Granada or Carlton to the other prior to 16 October 2002; 

27

 

	(j)
	Granada
not having discovered regarding Carlton and Carlton not having discovered regarding Granada:

	(i)
	any
financial, business or other information in relation to circumstances existing prior to 16 October 2002 which is material in the
context of the Merger and which has not been disclosed publicly by or on behalf of any member of the relevant Group or otherwise disclosed by Granada or Carlton to the other prior to such date;

	(ii)
	that
any financial, business or other information disclosed publicly at any time by any member of the relevant Group prior to 16 October 2002 is
misleading or contains any misrepresentations of fact or omits to state a fact necessary to make the information contained therein complete and not misleading and which in any such case is materially
adverse in the context of the Merger; or

	(iii)
	that
any member of the relevant Group is subject to any liability, contingent or otherwise, which has not been disclosed or reflected in the last
published audited consolidated financial statement of the relevant Group or has not otherwise been publicly disclosed or disclosed by Granada or Carlton to the other prior to 16 October 2002
and which is material in the context of the Merger; 

	(k)
	save
as publicly announced by Granada or Carlton prior to 16 October 2002 or as contemplated by this Press Announcement, no member of the Granada Group and no member of the
Carlton Group having since the date to which its last audited report and accounts were made up:

	(i)
	issued
or authorised or proposed the issue of additional shares of any class or securities convertible into, or rights, warrants or options to subscribe
for or acquire any such shares or convertible securities (save as between Granada and Carlton respectively and their respective wholly-owned subsidiaries or for options granted and any shares in
Granada or Carlton respectively issued upon exercise of options granted prior to 16 October 2002 under or pursuant to the Granada Share Schemes or the Carlton Share Schemes or as agreed between
Granada and Carlton from time to time) or redeemed, purchased or reduced any of its shares or other securities (or agreed to do so) to an extent which is material in the context of the Granada Group
or Carlton Group respectively, each taken as a whole;

	(ii)
	recommended,
declared, paid or made or proposed the recommendation, declaration, paying or making of, any dividend, bonus or other distribution,
whether payable in cash or otherwise (other than distributions between one member or the relevant group and another such member);

	(iii)
	authorised
or proposed or announced its intention to propose any merger or any other change in its share or loan capital or (other than in the
ordinary course of the business) any acquisition or disposal
of assets or shares which is material in the context of the Granada Group or the Carlton Group respectively, each taken as a whole;

	(iv)
	issued
or proposed the issue of any debentures or save in the ordinary course of business, incurred or increased any indebtedness or contingent
liability of an aggregate amount which might materially adversely affect the Granada Group or the Carlton Group respectively, each taken as a whole;

	(v)
	entered
into any contract, transaction arrangement or commitment (whether in respect of capital expenditure or otherwise) which is not in the ordinary
course of business or is or a long-term or unusual nature or which involves or could involve an obligation of a nature or magnitude which is material in the context of the Granada Group or
the Carlton Group respectively, each taken as a whole; or 

28

 

	(vi)
	taken
any corporate action or had any legal proceedings instituted or threatened against it for its winding-up (voluntarily or otherwise),
dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver or similar officer over all or any of its assets or revenues or any analogous proceedings in
any jurisdiction or had any such person or any analogous person in any jurisdiction appointed in each case which is materially adverse in the context of the Granada Group or the Carlton Group
respectively, each taken as a whole; 

	(l)
	since
the date to which the last published audited report and accounts of Carlton were made up and otherwise as publicly disclosed by Carlton or as disclosed by Carlton to Granada
prior to 16 October 2002:

	(i)
	no
litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Carlton Group is a party (whether as plaintiff
or defendant or otherwise) in each case which is material and adverse in the context of the Carlton Group taken as a whole, having been instituted, threatened or remaining outstanding or;

	(ii)
	there
having been no material adverse change in the business, financial or trading position of the Carlton Group, taken as a whole; or 

	(m)
	since
the date to which the last published audited report and accounts of Granada were made up and otherwise as publicly disclosed by Granada or disclosed by Granada to Carlton prior
to 16 October 2002:

	(i)
	no
litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Granada Group is a party (whether as plaintiff
or defendant or otherwise) in each case which is material and adverse in the context of the Granada Group taken as a whole, having been instituted, threatened or remaining outstanding; or

	(ii)
	there
having been no material adverse change in the business, financial or trading position of any member of the Granada Group, taken as a whole. 

3.    WAIVER

	3.1
	Granada
and Carlton, acting together, may waive, in whole or in part, all or any of the conditions contained in paragraphs 2.4(a), (b) and (d) to (i). Granada reserves
the right to waive, in whole or in part, all or any of the conditions contained in paragraphs 2.4(j) and (k) above, so far as they relate to Carlton, and in paragraph 2.4(l) above.
Carlton reserves the right to waive, in whole or in part, all or any of the conditions contained in paragraphs 2.4(j) and (k) above, so far as they relate to Granada, and in paragraphs 2.4(c)
and (m) above.

	3.2
	The
Merger will be governed by English law. The Rules of the Code will, so far as they are appropriate, apply to the Merger.

	3.3
	The
Merger will lapse and neither the Granada Scheme, the Carlton Scheme nor the Carlton Preference Scheme will proceed if, before the date of the Granada Court Meeting or the Carlton
Court Meeting (whichever is to be held earlier), pre-condition 1.1(a) has been waived and the Merger is subsequently referred to the Competition Commission. 

4.    FOR THE PURPOSES OF THESE CONDITIONS:

	(a)
	"Authorisations"
means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, permissions, exemptions and approvals
provided that for the purposes of condition 2.4(h), none of the foregoing in relation to the Office of Fair Trading, the Competition Commission and the Secretary of State for Trade and Industry shall
be included within the definition of "Authorisations"; and

	(b)
	"instrument"
means any arrangement, agreement, lease, licence, permit, franchise or other instrument. 

29

  

 
 

APPENDIX III
  
    DEFINITIONS    
  

        The following definitions apply throughout this announcement unless the context requires otherwise. 

	

"Act"	
 	

the Companies Act 1985, as amended
	

"Australia"	
 	

the Commonwealth of Australia, its states, territories and possessions
	

"Broadcasting Act"	
 	

the Broadcasting Act 1990, as amended
	

"Canada"	
 	

Canada, it provinces and territories and all areas subject to its jurisdiction and any political subdivision thereof
	

"Carlton"	
 	

Carlton Communications Plc
	

"Carlton Court Meeting"	
 	

the meeting of the Carlton Ordinary Shareholders to be convened by order of the Court under section 425 of the Act
	

"Carlton Extraordinary General Meeting"	
 	

the extraordinary general meeting of Carlton to be convened to approve the terms of the Merger
	

"Carlton Group"	
 	

Carlton and its subsidiary undertakings
	

"Carlton Group Associate or Associates"	
 	

any partnership, joint venture, firm or body corporate in which any member of the Carlton Group may be interested
	

"Carlton Ordinary Shareholders"	
 	

the holders of Carlton Ordinary Shares
	

"Carlton Ordinary Shares"	
 	

the ordinary shares of 5 pence each in the capital of Carlton
	

"Carlton Preference Scheme"	
 	

any scheme of arrangement relating to Carlton Preference Shares under section 425 of the Act that may be proposed
	

"Carlton Preference Shareholders"	
 	

the holders of Carlton Preference Shares
	

"Carlton Preference Shares"	
 	

the 6.5p (net) cumulative convertible redeemable preference shares of 5 pence each in the capital of Carlton
	

"Carlton Scheme"	
 	

the proposed scheme of arrangement relating to Carlton Ordinary Shares under section 425 of the Act
	

"Carlton Shareholders"	
 	

holders of Carlton Shares
	

"Carlton Shares"	
 	

Carlton Ordinary Shares and Carlton Preference Shares
	

"Carlton Share Schemes"	
 	

the Carlton 1983 Share Option Scheme, the Carlton 1987 US Plan, the Carlton 1999 Executive Share Option Scheme, the Carlton Deferred Annual Bonus Share Plan, the Carlton Long-Term Incentive Share Plan, the Carlton Sharesave Scheme and the Carlton
Equity Participation Plan
	

"City Code"	
 	

The City Code on Takeovers and Mergers
	

"Convertible Shares"	
 	

the convertible shares proposed to be issued by the Merged Group to Carlton Ordinary Shareholders, a summary of the key terms of which is set out in Appendix I
	

"Court"	
 	

the High Court of Justice in England and Wales
	
 	
 	

 

30

 

	

"CREST"	
 	

the relevant system (as defined in the Regulations) in respect of which CRESTCo is the Operator (as defined in the Regulations)
	

"CRESTCo"	
 	

CRESTCo Limited
	

"Granada"	
 	

Granada plc
	

"Granada Court Meeting"	
 	

the meeting of the holders of Granada Shares to be convened by order of the Court under section 425 of the Act
	

"Granada Extraordinary General Meeting"	
 	

the extraordinary general meeting of Granada to be convened to approve the terms of the Merger
	

"Granada Group"	
 	

Granada and its subsidiary undertakings
	

"Granada Group Associate or Associates"	
 	

any partnership, joint venture, firm or body corporate in which any member of the Granada Group may be interested
	

"Granada Scheme"	
 	

the proposed scheme of arrangement relating to Granada Shares under section 425 of the Act
	

"Granada Shares"	
 	

holders of Granada Shares
	

"Granada Shareholders"	
 	

the ordinary shares of 10p each in the capital of Granada
	

"Granada Share Schemes"	
 	

(which comprise the Schemes of Granada Media PLC and Granada PLC) Granada Approved Executive Share Option Scheme, Granada Unapproved Share Option Scheme, Granada Savings-Related Share Option Scheme, Granada Deferred Share Award Scheme, Granada Media
Unapproved Share Option Scheme, Granada Media Savings-Related Share Option Scheme, Granada Media Deferred Share Award Plan, Granada Media Contractors Share Option Scheme and the Granada Media Commitment Scheme
	

"Ireland"	
 	

Ireland, excluding Northern Ireland
	

"ITC"	
 	

Independent Television Commission (or any successor thereto)
	

"ITN"	
 	

Independent Television News Limited, the producer of national news programmes on ITV
	

"Japan"	
 	

Japan, its provinces and territories and all areas subject to its jurisdiction and any political subdivision thereof
	

"Lazard"	
 	

Lazard & Co. Limited
	

"Listing Rules"	
 	

the listing rules made by the UK Listing Authority
	

"London Stock Exchange"	
 	

London Stock Exchange plc
	

"Merged Group"	
 	

the new group created pursuant to the combination of the Granada Group and the Carlton Group by way of Schemes and, where the context requires, the holding company of such new group
	

"Merger"	
 	

the proposed merger of Granada and Carlton to be effected by the Schemes
	

"Merger Agreement"	
 	

the agreement entered into by each of Granada and Carlton immediately prior to release of this announcement setting out the terms of the Merger
	
 	
 	

 

31

 

	

"Merger Documentation"	
 	

the formal documentation relating to the Merger to be dispatched to Granada Shareholders and Carlton Shareholders following satisfaction or waiver of the pre-conditions set out in paragraph 1 of Appendix II
	

"OFT"	
 	

Office of Fair Trading
	

"Official List"	
 	

the list maintained by the UK Listing Authority
	

"Panel"	
 	

the Panel on Takeovers and Mergers
	

"Regulations"	
 	

the Uncertificated Securities Regulations 1995 (SI 1995 No. 95/3272)
	

"Schemes"	
 	

the Granada Scheme and the Carlton Scheme
	

"Standards"	
 	

the rules issued by the London Stock Exchange in relation to the admission to trading of, and continuing requirements for, securities admitted to the Official List
	

"UBS Warburg"	
 	

UBS Warburg Ltd., a subsidiary of UBS AG
	

"UK" or "United Kingdom"	
 	

the United Kingdom of Great Britain and Northern Ireland
	

"UK Listing Authority"	
 	

the Financial Services Authority as the competent authority for listing in the United Kingdom
	

"US" or "United States"	
 	

the United States of America, its territories and possessions, any state of the United States of America and the District of Colombia and all other areas subject to the jurisdiction of the United States of America
	

"Wider Carlton Group"	
 	

the Carlton Group Associates together with the Carlton Group
	

"Wider Granada Group"	
 	

the Granada Group Associated together with the Granada Group

32

  

 
 

LIST OF OMITTED SCHEDULES    
  

 
  SCHEDULE 2    

        Preliminary
Structure Paper

        (omitted pursuant Item 601 (b) (2) of Regulation S-K) 

 
 

SCHEDULE 3    

        Employee
Share Scheme and Employee Matter

        (omitted pursuant Item 601 (b) (2) of Regulation S-K) 

 
 

SCHEDULE 4    

        Tax
Covenant

        (omitted pursuant Item 601 (b) (2) of Regulation S-K) 

        
The Company agrees to furnish supplementally copies of any omitted schedule to the Commission upon request. 

	

Signed by	

/s/  GRAHAM PARROT      
 Graham Parrot

on behalf of

GRANADA PLC	
 	

 

	

Signed by	

/s/  PAUL MURRAY      
 Paul Murray

on behalf of

CARLTON COMMUNICATIONS PLC	
 	

 

33

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