Media Group Scheme Booklet For personal use only · consult your financial, ... of the Corporations...

For the scheme of arrangement between Seven Network Limited (ACN 052 816 789) and the holders of TELYS3 in relation to the exchange of TELYS3 for TELYS4 if the proposed merger of Seven Network Limited and WesTrac Holdings Pty Limited to form Seven Group Holdings Limited proceeds.

Scheme Booklet PART A

THE INDEPENDENT SEVEN DIRECTORS UNANIMOUSLY RECOMMEND THAT TELYS3 HOLDERS VOTE IN FAVOUR OF THE TELYS3 SCHEME, IN THE ABSENCE OF A SUPERIOR PROPOSAL.The Independent Expert has concluded that the TELYS3 Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders.

If you have any questions about the TELYS3 Scheme, please call the Seven Network Limited Information Line on 1300 656 831 (from within Australia, for the cost of a local call) or +61 2 8986 9358 (from outside Australia).Alternatively you can go to SGH’s website at www.sevengroup.com.au.

This Scheme Booklet is important and requires your immediate attention. You should read this document in its entirety. If you are in any doubt as to how to deal with this document, please consult your financial, legal or other professional adviser.

FINANCIAL ADVISERS LEGAL ADVISER

Media Group

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Purpose of this Scheme Booklet

Important documentThis Scheme Booklet has been sent to you in two parts: Part A (this document) and Part B (the document that accompanies this document). They are both important documents and you should read both of Part A and Part B in their entirety. If you are in any doubt as to the course you should follow, you should seek independent professional advice.

Date

This Scheme Booklet is dated 16 March 2010.

Explanatory statementThis Scheme Booklet (except for Annexure 1 to Part A of this Scheme Booklet) is the explanatory statement that has been prepared pursuant to section 412(1) of the Corporations Act to explain the effect of the TELYS3 Scheme. It, together with the TELYS4 Prospectus, provides information which is material to the making of a decision by TELYS3 Holders about whether or not to vote in favour of the TELYS3 Scheme and whether or not to accept the TELYS4 Offer.

ASX listing

A conditional application has been made for the admission of SGH to the official list of ASX and for quotation of all TELYS4 on the ASX. This application is conditional on, among other things, the Share Scheme being approved. An application to ASX will also be made for TELYS3 to remain quoted on ASX even though Seven’s ordinary shares would no longer be quoted if the Share Scheme proceeds but the TELYS3 Scheme does not proceed.

Role of ASIC, the ASX and the Court

A copy of this Scheme Booklet has been examined by ASIC pursuant to section 411(2)(b) of the Corporations Act and registered by ASIC under section 412(6) of the Corporations Act. ASIC has been requested to provide a statement in accordance with section 411(17)(b) of the Corporations Act that ASIC has no objection to the TELYS3 Scheme. If ASIC provides that statement, it will be produced to the Court at the Second Court Hearing. Neither ASIC nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

A copy of this Scheme Booklet has been lodged with the ASX. Neither the ASX nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

The Court is not responsible for the contents of this Scheme Booklet and, in ordering that the TELYS3 Scheme Meeting be convened, the Court does not in any way indicate that the Court has approved or will approve or otherwise endorses the TELYS3 Scheme.

Scheme Booklet not a prospectus

This Scheme Booklet is not a prospectus lodged under Chapter 6D of the Corporations Act. Section 708(17) of the Corporations Act provides that Part 6D.2 of the Corporations Act (relating to disclosure to investors about securities) does not apply in relation to an offer of securities if it is made under a compromise or arrangement under Part 5.1 of the Corporations Act, approved at a meeting held as a result of an order made by the Court under section 411(1) or (1A) of the Corporations Act. The TELYS3 Scheme will be such an arrangement if it is approved at the TELYS3 Scheme Meeting.

The TELYS4 Offer is made under the TELYS4 Prospectus which accompanies this Scheme Booklet and incorporates by reference this Scheme Booklet. You should read the TELYS4 Prospectus in full before making any decision whether to accept the TELYS4 Offer. Applications under the TELYS4 Offer can only be made pursuant to an application form (in this case the TELYS3 Proxy Form) that is accompanied by the TELYS4 Prospectus.

Foreign TELYS3 Holders

This Scheme Booklet has been prepared having regard to Australian disclosure requirements and Australian accounting standards. These disclosure requirements and accounting standards may be different from those in other countries.

It is important that TELYS3 Holders who are not Australian resident taxpayers or who are liable for tax outside Australia seek specific tax advice in relation to the Australian and overseas tax consequences of the TELYS3 Scheme and the TELYS4 Offer.

Restrictions in certain foreign countries may make it impractical or unlawful for TELYS4 to be offered or issued under the TELYS3 Scheme or the TELYS4 Offer to TELYS3 Holders in those countries, or for TELYS3 Holders located in those countries to receive TELYS4 under the TELYS3 Scheme or the TELYS4 Offer.

Any TELYS3 Holder whose address in the TELYS3 Register is outside of Australia and its external territories, New Zealand or Hong Kong will be an ‘Ineligible Foreign Holder’ for the purpose of the TELYS3 Scheme and the TELYS4 Offer (if applicable), unless ACE and Seven determine that it is lawful and not unduly onerous or impractical to issue that person with TELYS4.

This Scheme Booklet, the TELYS3 Scheme, the TELYS4 Offer, the TELYS4 Prospectus and the Recommended Proposal do not, either individually or in combination, constitute:

an offer to sell to TELYS3 • Holders any securities in SGH; ora solicitation of an offer to purchase from TELYS3 • Holders any securities in Seven,

in any jurisdiction where such an offer or solicitation would be illegal. TELYS3 Holders who are Ineligible Foreign Holders will not be issued with TELYS4 but will instead receive a cash payment. TELYS3 Holders in New Zealand or Hong Kong should refer to the important information in section 4.5 of Part B of this Scheme Booklet.

Investment decisions

The information in this Scheme Booklet does not constitute financial product advice. This Scheme Booklet does not take into account your individual investment objectives, financial situation, taxation position or particular needs. The information in this Scheme Booklet should not be relied on as the sole basis for any decision in relation to your TELYS3. You should seek independent professional advice before making any investment decision in relation to your TELYS3 or how to vote on the TELYS3 Scheme.

Forward looking statements

This Scheme Booklet contains forward looking statements which are not based solely on historical facts but are based on current expectations about future events and results. These forward looking statements are subject to inherent risks and uncertainties. Such risks and uncertainties include factors and risks specific to the industries in which Seven and WesTrac Group operate as well as general economic conditions, prevailing exchange rates and interest rates, conditions in the financial markets, government policies and regulations, competitive pressures and changes in technology. Actual events or results may differ materially from the expectations expressed or implied in such forward looking statements.

None of Seven, WesTrac Group, SGH, their respective related bodies corporate or their respective directors, officers, employees and advisers makes any representation or warranty (express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. Accordingly, you are cautioned about placing undue reliance on forward looking statements contained in this Scheme Booklet.

Unless otherwise indicated, all references to estimates, targets and forecasts and derivations of the same in this booklet are references to estimates, targets and forecasts by Seven or WesTrac Group management (as applicable). Management estimates, targets and forecasts are based on views held only at the date of this Scheme Booklet, and actual events and results may be materially different from them.

Since SGH is presently a company with no operations, and it will not acquire WesTrac Group and Seven until around the time of implementation of the Share Scheme, all statements in this Scheme Booklet about SGH are necessarily forward-looking statements.

Pro forma historical and pro forma forecast

financial information

The pro forma historical financial information and pro forma forecast financial information included in this Scheme Booklet (as set out in sections 1.2, 2.6 and 3.11 of Part B of this Scheme Booklet) has been prepared in accordance with the recognition and measurement principles of Australian Accounting Standards as at 31 December 2009 although it is presented in an abbreviated form insofar as it does not include all the disclosures, statements or comparative information as required by the Australian Accounting Standards applicable to annual financial reports prepared in accordance with the Corporations Act. The pro forma historical financial information and pro forma forecast financial information should be read in conjunction with the rest of this Scheme Booklet, the consolidated financial statements and related notes of Seven and SGH and other information that Seven and SGH have filed with ASIC and that Seven has announced to ASX.

Entitlement to vote

TELYS3 Holders who are registered on the TELYS3 Register at 7.00pm (Sydney time) on 18 March 2010 are entitled to vote at the TELYS3 Scheme Meeting. Further details on how to vote at the TELYS3 Scheme Meeting are set out in section 13.3 of Part A of this Scheme Booklet and in the relevant notice of meeting in Annexure 1 to Part A of this Scheme Booklet.

Privacy and personal information

Seven and SGH may collect personal information about you in connection with the TELYS3 Scheme. The personal information may include the names, contact details and details of shareholdings of TELYS3 Holders, together with the names and contact details of individuals appointed by TELYS3 Holders to act as proxies, attorneys or corporate representatives to vote at the TELYS3 Scheme Meeting.

Such information will be collected for the purpose of the TELYS3 Scheme Meeting and implementing the TELYS3 Scheme, the TELYS4 Offer and the Recommended Proposal. The information may be disclosed to Seven, SGH and their respective officers, related bodies corporate, advisers and service providers to the extent necessary in connection with the TELYS3 Scheme Meeting and implementing the TELYS3 Scheme, the TELYS4 Offer and the Recommended Proposal.

You may have certain rights to access personal information which is collected about you. You should contact the Seven Registry in the first instance should you wish to exercise these rights – the Seven Registry’s contact details are set out on the inside back cover of each part of this Scheme Booklet.

TELYS3 Holders who appoint a named person as their proxy, attorney or corporate representative to vote at the TELYS3 Scheme Meeting should inform that person of the matters outlined above.

Responsibility for information in this

Scheme Booklet

Seven is responsible for the contents of this Scheme Booklet other than, to the maximum extent permitted by law, the SGH Information, the WesTrac Information, the Independent Expert’s Report, the Investigating Accountant’s Report and the Tax Letters.

ACE is responsible for the WesTrac Information and the SGH Information (except to the extent that any misleading or deceptive statement results from information supplied by Seven), but does not assume any responsibility for the accuracy or completeness of any other part of this Scheme Booklet.

The Independent Expert has prepared the Independent Expert’s Report and is responsible for that report. None of Seven, SGH, ACE, their respective related bodies corporate or the directors, officers, employees or advisers of any of these entities assumes any responsibility for the accuracy or completeness of the information in the Independent Expert’s Report except, in the case of Seven or ACE, in relation to information given by them respectively to the Independent Expert.

The Investigating Accountant has prepared the Investigating Accountant’s Report and is responsible for that report. None of Seven, SGH, ACE, their respective related bodies corporate or the directors, officers, employees or advisers (other than the Investigating Accountant) of any of these entities assumes any responsibility for the accuracy or completeness of the information in the Investigating Accountant’s Report except, in the case of Seven or ACE, in relation to information given by them respectively to the Investigating Accountant.

Ernst & Young has prepared the Tax Letters and is responsible for the Tax Letters. None of Seven, SGH, ACE, their respective related bodies corporate or the directors, officers, employees or advisers (other than Ernst & Young) of any of these entities assumes any responsibility for the accuracy or completeness of the information in the Tax Letters, except in the case of Seven or ACE in relation to information given by them respectively to Ernst & Young.

Effect of rounding

A number of figures, amounts, percentages, estimates, calculations of value and fractions in this Scheme Book (Figures), are subject to the effect of rounding. Accordingly the actual calculation of these Figures may differ from the Figures set out in this Scheme Booklet.

Definitions

Capitalised terms used in Part A of this Scheme Booklet and the Proxy Form are defined in the Glossary in section 15 of Part A of this Scheme Booklet.

Each of the reports and other documents contained in this Scheme Booklet (including in each of the Annexures) have their own defined terms which are sometimes different from those set out in the Glossary.

Photographs and diagrams

Photographs and diagrams used in this Scheme Booklet do no depict assets owned or used by WesTrac Group or Seven unless otherwise specified. Diagrams used in this Scheme Booklet are illustrative only and may not be drawn to scale.

References to time and currency

All references in this Scheme Booklet to:time are references to the time in Sydney, New South • Wales unless expressly indicated otherwise; andcurrency (including “$” and “A$”) are references • to Australian dollars.

Questions

If you have any questions in relation to the TELYS3 Scheme, the TELYS4 Offer or this Scheme Booklet, please call the Seven Network Limited Information Line on 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm (Sydney time), Monday to Friday. Alternatively, you can go to SGH’s website at www.sevengroup.com.au.

Important noticesF

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Overview of this Scheme Booklet and what you should do 2

Key Dates 5

Letter from the Deputy Chairman of Seven Network Limited 6

Letter from the Chairman of Australian Capital Equity Pty Limited 8

Impact of the Recommended Proposal on TELYS3 Holders 9

1 Summary of reasons why you should vote in favour of the TELYS3 Scheme 11

2 Summary of reasons why you may choose to vote against the TELYS3 Scheme 13

3 Why you should vote in favour of the TELYS3 Scheme 15

4 Why you may consider voting against the TELYS3 Scheme 19

5 Other relevant considerations 23

6 Details of the TELYS4 Off er 27

7 Summary of terms of TELYS4 29

8 Comparison of TELYS3 and TELYS4 33

9 The TELYS3 Scheme: questions and answers 35

10 TELYS4: questions and answers 43

11 Overview of the WesTrac Group 51

12 Overview of SGH 53

13 How to vote 55

14 How to accept the TELYS4 Off er 59

15 Glossary 61

Annexure 1 67

Annexure 2 71

Annexure 3 77

Corporate directory 87

Table of contents

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2 Seven Network Limited Scheme Booklet – Part A

Overview of this Scheme Booklet and what you should do

WHAT IS THIS SCHEME BOOKLET FOR?Seven is putting to its ordinary shareholders (Seven

Shareholders) the “Recommended Proposal” to create SGH by merging Seven with WesTrac Group, which is associated with Mr Kerry Stokes AC.

This merger is proposed to occur through the “Share Scheme” on which ordinary shareholders of Seven vote. TELYS3 Holders who do not also own ordinary shares in Seven (Seven Shares) will not get to vote on the Share Scheme. However, if the Share Scheme is approved, this will have a significant effect on the TELYS3.

Seven is therefore also proposing the TELYS3 Scheme which will, if approved, enable TELYS3 Holders to participate in the Recommended Proposal by exchanging their TELYS3 (which are issued by Seven) for TELYS4 (which would be issued by SGH). This would mean that, if the TELYS3 Scheme is approved, instead of continuing to own hybrid securities in Seven, you would instead receive similar hybrid securities in SGH.

This Scheme Booklet:

de• scribes the impact on TELYS3 if the Share Scheme is implemented but the TELYS3 Scheme is not; and

provides you with relevant information that you will need • in order to decide whether or not to vote in favour of the TELYS3 Scheme.

This Scheme Booklet and the TELYS4 Prospectus contains the TELYS4 Offer, which provides a potential opportunity

for you to exchange your TELYS3 for TELYS4 if the Share Scheme is approved but the TELYS3 Scheme is not approved.

TELYS3 SCHEMEUnder the TELYS3 Scheme, SGH Group will acquire all of the TELYS3 in exchange for TELYS4, a new hybrid security to be issued by SGH. This would mean that you would receive TELYS4 in exchange for your TELYS3. The TELYS3 Scheme requires the approval of TELYS3 Holders.

TELYS3 Holders who are also holders of Seven Shares will receive a separate booklet containing information in relation the Share Scheme. The TELYS3 Scheme is conditional on the Share Scheme being approved and implemented (but not vice versa).

This Scheme Booklet is comprised of two separate parts:

this Part A which is specific to the TELYS3 Scheme and • has been provided only to TELYS3 Holders; and

Part B (accompanying this Part A) which is common to both • the TELYS3 Scheme and the Share Scheme and which has been provided to both TELYS3 Holders (in respect of the TELYS3 Scheme) and Seven Shareholders (in respect of the Share Scheme).

Part B• of this Scheme Booklet includes a copy of the Independent Expert’s Report in section 6.

The Independent Expert has concluded that the TELYS3 • Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders.

The Independent Expert has concluded that the TELYS3 Scheme is in the best interests of TELYS3 Holders. You should read the Independent Expert’s Report in full.

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RELATED PARTY INTERESTSUnder the Recommended Proposal, certain Seven Directors being Kerry Stokes, Peter Gammell and Ryan Stokes have a different interest from other Seven Shareholders. They, or entities of which they are directors, have an existing interest in the WesTrac Group which has entered into transactions with Seven to implement the Recommended Proposal. In view of this personal interest of Messrs Stokes, Gammell and Stokes, they were excluded from the Seven Board of Directors’ considerations in relation to the Recommended Proposal. Seven also put in place protocols to deal with any perceived or actual conflicts of interest arising as a result. These protocols are described in detail in section 4.2 of Part B of this Scheme Booklet and summarised in section 5.4 of this Part A.

Particularly having regard to the potential for conflicts of interest, TELYS3 Holders should carefully read this Scheme Booklet, including the Independent Expert’s Report.

TELYS4 OFFERAs a further offer for TELYS3 Holders if the TELYS3 Scheme does not proceed, WesTrac Holdings is making the TELYS4 Offer, which allows individual TELYS3 Holders to elect to exchange their TELYS3 for TELYS4 on a one-for-one basis. The TELYS4 Offer is conditional on:

the Share Scheme becoming effective and the TELYS3 1. Scheme not becoming effective; and

minimum acceptances being received from all TELYS3 2. Holders pursuant to the TELYS4 Offer for at least $100 million face value of TELYS4.

Further information on the TELYS4 Offer is set out in section 6 of this Part A. The TELYS4 Offer is contained in the TELYS4 Prospectus, which accompanies this Scheme Booklet. You should read the TELYS4 Prospectus in full, in addition to this Scheme Booklet, to decide whether or not to accept the TELYS4 Offer.

If you wish to accept the TELYS4 Offer, you will need to make an election at the time of voting on the TELYS3 Scheme by ticking the appropriate box on the TELYS3 Scheme proxy form.

The Independent Seven Directors unanimously recommend that you vote in favour of the TELYS3 Scheme, in the absence of a superior proposal.

Note:1 The deadline for submitting Proxy Forms for the TELYS3 Scheme Meeting is 11.30am on Sunday, 18 April 2010. However, as a practical matter, Proxy Forms returned by post will need to be received by the Seven Registry by no later than Friday, 16 April 2010.

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WHAT SHOULD YOU DO?

STEP 1 – CAREFULLY READ THIS SCHEME BOOKLETYou should read both Part A and Part B of this Scheme Booklet in their entirety before making a decision on whether or not to vote in favour of the TELYS3 Scheme.

STEP 2 – VOTE ON THE TELYS3 SCHEMEVote on the TELYS3 Scheme by doing one of the following:

Complete and return the yellow Proxy Form accompanying • this Scheme Booklet for the TELYS3 Scheme Meeting in accordance with the instructions set out on that form. Your Proxy Form must be received by the Seven Registry or by Seven by no later than 11.30am, Sunday 18 April 20101;

Attend the TELYS3 Scheme Meeting and vote in person, at • The Grand Ballroom, The Westin Sydney, No. 1 Martin Place, Sydney NSW 2000 on Tuesday, 20 April 2010 commencing at 11.30 am (Sydney time).

You may also vote by attorney or corporate representative. •

Refer to section 13.3 of Part A of this Scheme Booklet for • further information regarding how to vote at the TELYS3 Scheme Meeting.

TELYS3 Holders who are registered in the TELYS3 Register at 7.00pm (Sydney time) on Sunday, 18 April 2010 may attend and vote at the TELYS3 Scheme Meeting.

The Independent Seven Directors unanimously recommendthat you vote in favour of the TELYS3 Scheme, in the absence of a superior proposal.

STEP 3 – READ THE TELYS4 PROSPECTUS AND CONSIDER WHETHER YOU WANT TO ACCEPT THE TELYS4 OFFERAs noted above, the TELYS4 Offer allows you to elect to exchange your TELYS3 for TELYS4 on a one-for-one basis. The TELYS4 Offer is conditional on:

the Share Scheme becoming Effective and the TELYS3 1. Scheme not becoming Effective; and

minimum acceptances being received from all TELYS3 2. Holders pursuant to the TELYS4 Offer for at least $100 million face value of TELYS4.

For further details of the TELYS4 Offer, see section 6 of Part A of this Scheme Booklet. The TELYS4 Offer is contained in the TELYS4 Prospectus, which accompanies this Scheme Booklet. You should read the TELYS4 Prospectus in full before deciding whether or not to accept the TELYS4 Offer.

If you wish to accept the TELYS4 Offer, you will need to tick the appropriate box on the TELYS3 Scheme proxy form at the time of voting on the TELYS3 Scheme.

FOR FURTHER INFORMATIONIf you are in any doubt as to what you should do, you should consult your financial, legal or other professional adviser before deciding whether or not to vote in favour of the TELYS3 Scheme and whether or not to accept the TELYS4 Offer.

If you have any questions, please contact the Seven Network Limited Information Line on 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm (Sydney time), Monday to Friday. Alternatively, you can go to SGH’s website at www.sevengroup.com.au.

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Key dates

Event Date

Deadline for receipt of Proxy Forms for the TELYS3 Scheme Meeting1

Deadline for receipt of acceptances of the TELYS4 Offer.

11.30am on Sunday, 18 April 2010

Record date for determining entitlement to vote at the TELYS3 Scheme Meeting2 7.00pm on Sunday, 18 April 2010

TELYS3 Scheme Meeting to be held at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000

11.30am on Tuesday, 20 April 2010

Court hearing to approve the TELYS3 Scheme (and the Share Scheme) Friday, 23 April 2010

Effective Date of the TELYS3 Scheme Thursday, 29 April 2010

Suspension of trading of TELYS3 (if TELYS3 Scheme not approved)

Last day of trading of TELYS3 (if TELYS3 Scheme approved)

Thursday, 29 April 2010

Thursday, 29 April 2010

Commencement of trading in TELYS4 on a deferred settlement basis on the ASX Friday, 30 April 2010

TELYS3 Scheme Record Date for determining entitlements to TELYS3 Scheme Consideration

7.00pm on Thursday, 6 May 2010

Implementation Date

Despatch of holding statements for TELYS4

Last day of trading of TELYS4 on a deferred settlement basis

Thursday, 13 May 2010



Commencement of trading of TELYS4 on a normal settlement basis

Recommencement of trading of TELYS3 after suspension (if TELYS3 Scheme is not approved)

Friday, 14 May 2010

Friday, 14 May 2010

These dates and times are indicative only. The actual times and dates will depend on many factors outside the control of Seven, including the Court approval process and the satisfaction or, where applicable, waiver of the conditions in the Implementation Deed and the TELYS3 Scheme.

Any changes will be notifi ed on the SGH website at www.sevengroup.com.au and announced to the ASX by Seven.

Notes:1 As a practical matter, proxy forms and TELYS4 acceptances returned by post will need to be received by the Seven Registry by no later than Friday 16 April 2010.2 The date for determining entitlement to vote at the TELYS3 Scheme Meeting will be Sunday, 18 April 2010 at 7.00pm (Sydney time). As a practical matter, for a person to

be entitled to vote at the TELYS3 Scheme Meeting, they should ensure that they are registered as the holder of TELYS3 by no later than 7.00pm (Sydney time) on Friday, 16 April 2010.

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Dear TELYS3 Holder,

This booklet sets out the details of a proposed transformational transaction for Seven Network Limited (Seven), its impact on your TELYS3 and your alternatives in relation to that transaction.

In view of the terms of the TELYS3 and the impact of the proposed transaction on TELYS3, Seven is proposing the TELYS3 Scheme, to give TELYS3 holders an opportunity to participate in the proposal as described in this Scheme Booklet.

PROPOSAL TO CREATE SEVEN GROUP HOLDINGS LIMITEDOn 22 February 2010, Seven announced that agreement had been reached with Australian Capital Equity Pty Limited (ACE) on a proposal to combine the assets and investments of Seven with WesTrac Holdings Pty Limited (owner of the WesTrac Group), a market leading equipment management business owned by ACE (Recommended Proposal).

The Recommended Proposal will be put to Seven’s ordinary shareholders (Seven Shareholders) for consideration under a scheme of arrangement (Share Scheme). If the Share Scheme is approved:

Seven and WesTrac Group will be combined to form SGH;•

Seven Shareholders will receive one share in SGH Share for each Seven Share; •

ultimately, ACE will receive 115 million SGH shares (less the number of SGH Shares already on issue) for WesTrac Holdings; and•

Seven Shares will cease trading on the ASX and SGH shares will commence trading on the ASX.•

Through the TELYS3 Scheme, Seven is providing an opportunity for TELYS3 Holders to participate in the Recommended Proposal

by exchanging their TELYS3 (which are issued by Seven) for TELYS4 (which would be issued by SGH).

EFFECT OF RECOMMENDED PROPOSAL ON TELYS3If the Share Scheme is implemented and the TELYS3 Scheme is not, this will have an impact on the TELYS3. In this scenario, • there is a risk that TELYS3 may become a less attractive security.

The TELYS3 Undertaking will mitigate in part, but not eliminate, this risk. However, the Independent Expert has concluded • that the value of the TELYS3 may be discounted by 5% to 10% to reflect the impact on TELYS3 if the Share Scheme is approved and the TELYS3 Scheme is not.

THE TELYS3 SCHEMETo allow TELYS3 Holders to benefit from this merger opportunity and to avoid the potential detriment to your TELYS3 if the Share Scheme proceeds, it is with pleasure that we put to the TELYS3 Holders this TELYS3 Scheme and the TELYS4 Offer. Under the TELYS3 Scheme, if both the Share Scheme and the TELYS3 Scheme proceeds, TELYS3 will be exchanged on a one-for-one basis into TELYS4, a new security which will be issued on similar terms to TELYS3 by SGH.

TELYS4 OFFERAs a further offer for TELYS3 Holders if the TELYS3 Scheme does not proceed, WesTrac Holdings is making the TELYS4 Offer, which allows individual TELYS3 Holders to elect to exchange their TELYS3 for TELYS4 on a one-for-one basis. The TELYS4 Offer is conditional on:

the Share Scheme becoming effective and the TELYS3 Scheme not becoming effective; and1.

minimum acceptances being received from all TELYS3 Holders pursuant to the TELYS4 Offer for at least $100 million face value of TELYS4.2.

Further information on the TELYS4 Offer is set out in section 6 of this Part A. The TELYS4 Offer is contained in the TELYS4 Prospectus, which accompanies this Scheme Booklet. I encourage you to read the TELYS4 Prospectus in full, in addition to this Scheme Booklet, to decide whether or not to accept the TELYS4 Offer.

If you wish to accept the TELYS4 Offer, you will need to make an election at the time of voting on the TELYS3 Scheme by ticking the appropriate box on the TELYS3 Scheme proxy form.

Letter from the Deputy Chairman of Seven Network Limited

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INDEPENDENT SEVEN DIRECTORS’ RECOMMENDATIONIn view of the personal interest of Kerry Stokes, Peter Gammell and Ryan Stokes in matters relating to the Recommended Proposal, an Independent Board Committee (IBC) was established in November 2009 comprising the Independent Directors, to consider and oversee negotiations with ACE and SGH.

The Independent Seven Directors unanimously recommend that you vote in favour of the TELYS3 Scheme. Each Seven Director who holds or controls TELYS3 intends to vote, or procure the vote, of all their TELYS3 in favour of the TELYS3 Scheme.

The advantages of the TELYS3 Scheme include:

enhanced dividend coverage and the benefit of SGH’s conservative balance sheet;•

the benefit of a larger and more diverse asset portfolio and business mix, given the addition of WesTrac Group to Seven’s existing • businesses and investments; and

TELYS4 overall terms which may appeal more to some investors than the existing TELYS3. •

The Independent Seven Directors’ recommendation to vote in favour of the TELYS3 Scheme is based on a number of important considerations:

the key benefits that will be delivered to TELYS3 Holders if the TELYS3 Scheme is implemented when compared against its potential • disadvantages and risks. In addition to the potential adverse impact on TELYS3 described above, see sections 1 to 4 of Part A of this Scheme Booklet for details of the potential benefits and disadvantages and section 5 of Part B for more detail on the potential risks. See section 5.5 of Part A of this Scheme Booklet for more detail of the particular risks if the Share Scheme proceeds but the TELYS3 Scheme does not; and

the Independent Expert’s conclusion that the TELYS3 Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders.•

INDEPENDENT BOARD COMMITTEETo manage conflicts of interest that could arise between Seven and ACE, the Seven Directors adopted protocols to govern its conduct in considering the Recommended Proposal. The IBC comprising the Independent Seven Directors was formed to evaluate and negotiate the Recommended Proposal with ACE. The IBC engaged Grant Samuel and J.P. Morgan as strategic and financial advisers, Freehills as legal adviser, KPMG as investigating accountant and Ernst & Young as tax adviser.

INDEPENDENT EXPERTThe IBC commissioned Deloitte (Independent Expert) to prepare an Independent Expert’s Report for Unrelated Seven Shareholders and TELYS3 Holders. The Independent Expert has concluded the TELYS3 Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders.

Further details are set out in Section 6 of Part B of this Scheme Booklet.

CONCLUSIONFurther information in relation to the TELYS3 Scheme is contained in this Part A and in Part B of this Scheme Booklet, including the reasons for your directors’ recommendation and the Independent Expert’s report. You should also have regard to the potential disadvantages and risks associated with the TELYS3 Scheme as summarised in sections 2 and 4 of this Part A and set out in detail in section 5 of Part B of this Scheme Booklet. Please read both parts of this Scheme Booklet before making your decision and voting at the TELYS3 Scheme Meeting.

I encourage you to vote at the TELYS3 Scheme Meeting. If you wish to maximise the prospects of you being able to exchange your TELYS3 for TELYS4 if the Share Scheme proceeds, it is important that you vote in favour of the TELYS3 Scheme.

If, having read the TELYS4 Prospectus, you wish to obtain TELYS4 in exchange for your TELYS3, if the Share Scheme proceeds, even if the TELYS3 Scheme does not proceed, it is important that, as well as voting, you also accept the TELYS4 Offer.

If you have any questions in relation to the Recommended Proposal, the TELYS3 Scheme, the TELYS4 Offer or this Scheme Booklet, please contact the Seven Network Limited Information Line on 1300 656 831 (free call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm (Sydney time), Monday to Friday, or go to SGH’s website at www.sevengroup.com.au.

Yours sincerely

Peter Ritchie AODeputy ChairmanSeven Network Limited

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Letter from the Chairman of Australian Capital Equity Pty Limited

16 March 2010

Dear TELYS3 Holder,

On behalf of Australian Capital Equity Pty Limited (ACE), we are pleased to provide you with information regarding:

the Recommended Proposal to merge Seven Network Limited (• Seven) and the owner of the WesTrac Group, to create

Seven Group Holdings Limited (SGH); and

the TELYS3 Scheme and the TELYS4 Offer which provide opportunities for you to exchange your TELYS3 for similar securities, • TELYS4, to be issued by SGH, if the Recommended Proposal proceeds.

I am writing to you as Chairman of ACE and not in my capacity as a director of Seven.

An investment in SGH’s TELYS4 will provide ongoing exposure to all of Seven’s existing investments, including Seven Media Group (SMG), West Australian Newspapers Limited and Consolidated Media Holdings Limited. In addition, TELYS4 Holders will benefit from an enlarged more diverse asset portfolio and business mix with the addition of WesTrac Group, an authorised Caterpillar equipment dealer in its Western Australia, NSW/ACT Service Territories where it has a market leading position. WesTrac Group is also an authorised dealer in its North Eastern China Service Territory. WesTrac Group has exposure to both the high growth resources sector in Australia and the fast growing Chinese economy. The National Hire Group Limited (which is 66% owned by the WesTrac Group), has a 46% investment in Coates Hire which is the #1 equipment hire business in Australia.

ACE believes the benefits of the Recommended Proposal for TELYS3 Holders include increased dividend coverage, a conservative capital structure with significant liquidity and an increased capital base. In addition, TELYS4 Holders will enjoy greater investor protections than if they remain invested in the current TELYS3.

Our key objective for SGH will be to continue management’s strong track record of growth in earnings which will further enhance dividend coverage, maintain a conservative capital position while continuing to focus on risk-management issues.

On behalf of ACE, I encourage you to vote in favour of the TELYS3 Scheme and to accept the TELYS4 Offer, and we look forward to welcoming you as a TELYS4 Holder.

Yours sincerely

Kerry Stokes ACExecutive Chairman Australian Capital Equity Pty LtdF

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IMPACT ON TELYS3 HOLDERS IF TELYS3 SCHEME AND SHARE SCHEME ARE APPROVED

SGH will be a significant diversified operating and investment group with market leading businesses and investments with strong revenue and earnings.

Financial benefits, including enhanced dividend coverage and conservativebalance sheet.

Benefit of a larger and more diverse asset portfolio and business mix, given the addition of WesTrac Group to Seven’s existing businesses and investments.

More effective investor protections in the event dividends are not paid or a takeover bid or scheme of arrangement is recommended.

IMPACT ON TELYS3 IF SHARE SCHEME IS APPROVED AND TELYS3 SCHEME IS NOT APPROVEDTELYS3 Holders may no longer derive as much benefit from the TELYS3 dividend and capital stopper which is limited • to Seven and does not extend to SGH.

Seven will mitigate some of the potential downside for TELYS3 Holders through the TELYS3 Undertaking. The effect of the Deed • of Undertaking is that Seven will treat the TELYS3 as if they were cumulative. Seven commits in favour of TELYS3 Holders from time to time as follows:

In the future Seven will pay TELYS3 Dividends if it has funds legally available. Under the current TELYS3 terms, there is a further –step before a TELYS3 dividend will be payable – that the directors of Seven, at their discretion, resolve to pay it. This further step will generally no longer apply if the TELYS3 Scheme is not approved, except when the TELYS4 Dividend Stopper applies. This means that, in ordinary circumstances, in the future TELYS3 Holders will be paid the TELYS3 Dividends as long as Seven has sufficient profits or retained earnings to pay them.

Where Seven misses a TELYS3 Dividend because it does not have funds legally available, it will pay an Optional Dividend –to make this up once it has funds legally available to do so, except when the TELYS4 Dividend Stopper applies. This will allow Seven to make up for up to two consecutive missed TELYS3 Dividends. If Seven pays an Optional Dividend, this will “refresh” so that Seven could only pay Optional Dividends to make up for two subsequent consecutive missed dividends.

There is a restriction in Seven’s constitution and the TELYS3 terms which means Optional Dividends can only be paid for up –to two consecutive missed dividends which have not been made up for by Optional Dividends. This means that, if Seven is unable to pay three or more consecutive dividends, TELYS3 Holders cannot be compensated for all missed dividends by Optional Dividends. Therefore, Seven commits to pay a compensating amount to TELYS3 Holders, but on the basis that payment may be deferred by up to 80 years.

Impact of the Recommended Proposal on TELYS3 Holders

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Specifically, Seven commits that by no later than the last Dividend Payment Date before the earlier of the 80-year –anniversary of the TELYS3 Undertaking or the date Seven commences winding up, it will Exchange all TELYS3 on the basis that Seven will pay a fixed amount on Exchange equal to:

the future value amount of all scheduled dividends from the effective date of the TELYS3 Undertaking to the Exchange –date, compounded semi-annually at the Rate on Exchange; less

the future value of any amounts actually paid as dividends during that period (also compounded semi annually –at the Rate on Exchange).

Seven needs to make a change to its constitution (to remove a restriction on paying interest on dividends) to permit this –payment. It expects to be in a position to do so since SGH will own 100% of ordinary shares after implementation of the Share Scheme, and can therefore pass the necessary vote.

the “Rate on Exchange” for this purpose is the Dividend Rate on each Dividend Payment Date and, where the actual –Market Rate is not yet known, the assumed Dividend Rate, assuming that the Market Rate is the long term swap rate. This calculation is to compensate TELYS3 Holders for the time value of money since they may not receive compensation for up to 80 years.

In future Seven will not convert the TELYS3 to ordinary Seven Shares. It would not be appropriate to do so, given that TELYS3 • Holders would not receive listed shares because Seven’s Ordinary Shares would no longer be listed. Consequently, TELYS3 Holders will no longer have any chance to obtain an ordinary equity interest in Seven;

Although TELYS3 dividends will, as a result of the TELYS3 Undertaking, become similar to cumulative dividends, and TELYS3 • Holders will receive dividends where Seven has profits or retained earnings available and the TELYS4 Dividend Stopper is not active, there is no guarantee that TELYS3 Holders will receive all dividends before the TELYS3 are Exchanged, which may be delayed for a significant period of time (up to 80 years); and

The commitment under the TELYS3 terms for Seven Directors to use reasonable endeavours to achieve an offer for TELYS3 • Holders in the event of a takeover or a scheme of arrangement would no longer have any application because a future takeover bid or scheme of arrangement of Seven is highly unlikely. This commitment would also not apply in relation to a change of control of SGH.

For more detail on the TELYS3 Undertaking, see section 5.7 of Part A of this Scheme Booklet. For a copy of the form of the TELYS3 Undertaking, see Annexure 2 to Part A of this Scheme Booklet.

WHAT YOU WILL RECEIVEIf the TELYS3 Scheme proceeds, you will receive one TELYS4 for every TELYS3 that you own on the TELYS3 Scheme Record Date.

You can also elect to receive TELYS4, even if the TELYS3 Scheme does not proceed. This offer is made in the TELYS4 Prospectus and is available to all TELYS3 Holders, subject to the Share Scheme proceeding and there being acceptance by TELYS3 Holders with a face value in aggregate of at least $100 million (the TELYS4 Offer).

See the TELYS4 Prospectus and section 6 of Part A of this Scheme Booklet for further details.

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1SUMMARY OF REASONS WHY YOU SHOULD VOTE IN FAVOUR OF THE TELYS3 SCHEME

section 1 11section 1 11

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1 TELYS4 OVERALL TERMS MAY APPEAL MORE TO SOME INVESTORS THAN TELYS3Seven will be transformed from an investment holding company to a significant Australian diversified operating and investment group with market leading businesses and investments, forecast FY2011 revenue of $2.8 billion, EBITDA of $312 million and NPAT of $187 million*.

TELYS4 Holders will benefit from a larger and more diverse asset portfolio and business mix, given the addition of WesTrac Group to Seven’s existing businesses and investments.

TELYS4 will be issued by SGH and will pay dividends at a rate that is equal to the dividend rate in respect of TELYS3 at the relevant time. Accordingly, dividends paid in respect of TELYS4 after 31 May 2010 will be at a dividend rate that is equivalent to the TELYS3 dividend rate including the ‘step-up’ margin.

In addition, unlike TELYS3, TELYS4 Holders will be able to demand Conversion or Exchange (at SGH’s election) if SGH breaches the Dividend and Capital Stopper.

2 INDEPENDENT EXPERT’S CONCLUSIONThe Independent Expert has concluded that the TELYS3 Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders. The Independent Expert’s Report is an important document, which you should read in full. It contains important assumptions and qualifications to the opinions expressed.

3 FINANCIAL BENEFITS, INCLUDING ENHANCED DIVIDEND COVERAGE AND A CONSERVATIVE BALANCE SHEETThe creation of SGH is expected to result in improved earnings as well as significant cash and liquidity, which will provide TELYS4 Holders with increased dividend coverage and a conservative capital structure relative to that available to TELYS3 Holders.

4 TELYS3 WILL BECOME A SUBSIDIARY COMPANY HYBRID, ISSUED BY A COMPANY WITH NO QUOTED ORDINARY SHARESIf the Share Scheme is implemented but the TELYS3 Scheme is not, Seven Shares will cease being quoted on ASX and TELYS3 will become a subsidiary company hybrid (although it is intended that the TELYS3 will continue to be quoted on ASX in such a scenario). This may potentially make TELYS3 less appealing to some investors and could affect the trading price of TELYS3. The Independent Expert has expressed the view that the value of the TELYS3 could be discounted by 5% to 10% to reflect the impact on TELYS3 if the Share Scheme is approved and the TELYS3 Scheme is not.

5 TELYS3 FREE FLOAT MAY DECLINEIf the TELYS3 Scheme is not implemented, TELYS3 Holders may still elect to exchange their TELYS3 for TELYS4 on an individual basis under the TELYS4 Offer. Any such exchanges will, subject to the conditions to the TELYS4 Offer being satisfied, reduce the total number of TELYS3 on issue, potentially reducing secondary market liquidity of TELYS3.

Further details of the reasons why you should vote in

favour of the TELYS3 Scheme are set out in section 3 of

Part A of this Scheme Booklet.

* The assumptions underlying the SGH forecasts and the sensitivities of the forecasts are set out in section 3.11 of Part B of this Scheme Booklet. Forward looking statements are based on current expectations and results. They are subject to inherent risks and uncertainties. Actual events or results may differ materially from the expectation expressed or implied in such forward looking statements.

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2SUMMARY OF REASONS WHY YOU MAY CHOOSE TO VOTE AGAINST THE TELYS3 SCHEME

section 2 13

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1 CHANGE IN THE NATURE OF INVESTMENTThe nature of TELYS3 Holders’ investment will change, with an exposure to WesTrac Group and therefore different businesses, investments, risks and earnings profiles.

2 TELYS3 DIVIDENDS WILL BECOME, IN PRACTICAL TERMS, CUMULATIVE BUT DEFERRABLE FOR UP TO 80 YEARSIf the Share Scheme is implemented but the TELYS3 Scheme is not, Seven will undertake to pay all scheduled dividends on any outstanding TELYS3 if it has funds legally available to do so and there is no TELYS4 Dividend Stopper Event in effect. However, certain payments under the TELYS3 Undertaking will only be made on Exchange of the TELYS3, which could be delayed for up to 80 years. See section 5.7 of this Scheme Booklet for a summary of the TELYS3 Undertaking.

3 PRICE UNCERTAINTYThe price at which TELYS4 trade on ASX after the Share Scheme is implemented may be influenced by a range of factors and they may trade below the price of TELYS3.

4 LEVERAGE AND INTEREST COSTSSGH will have drawn debt facilities and borrowings, whereas Seven currently has minimal borrowings and a significant cash balance.

4 RELATED PARTY INTERESTSSome TELYS3 Holders may not favour Seven entering into a transaction under which certain Seven Directors have a different interest from other Seven Shareholders.

Further details of the reasons why you may choose to

vote against the TELYS3 Scheme are set out in section 4

of Part A of this Scheme Booklet.

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3WHY YOU SHOULD VOTE IN FAVOUR OF THE TELYS3 SCHEME

section 3 15

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The Independent Seven Directors believe the TELYS3 Scheme offers a number of benefits for TELYS3 Holders and unanimously recommend that TELYS3 Holders vote in favour of the TELYS3 Scheme, in the absence of a superior proposal.

In making their recommendation, the Independent Seven Directors have, in particular, considered the advantages and benefits of the TELYS3 Scheme set out in this section 3, together with:

the disadvantages and potential risks of the TELYS3 Scheme, • set out in section 4 of Part A of this Scheme Booklet;

the other relevant considerations set out in section 5 • of Part A of this Scheme Booklet;

the risks set out in section 5 of Part B of this Scheme • Booklet; and

the report of the Independent Expert, set out in section 6 • of Part B of this Scheme Booklet.

You should read each of these sections of this Scheme Booklet in full when deciding how to vote on the TELYS3 Scheme.

TELYS4 OVERALL TERMS MAY APPEAL MORE TO SOME INVESTORS

TELYS4 will be issued by SGH as parent entity of the • combined group. TELYS3 only provide exposure to Seven’s current business and strategic investments, whereas TELYS4 will provide exposure to a larger and more diverse asset portfolio and business mix, which has the potential to receive dividends from all of its subsidiaries including Seven and WesTrac Group.

TELYS4 will pay dividends at a dividend rate equal to the • rate in respect of TELYS3 at the relevant time. Accordingly, dividends paid in respect of TELYS4 after 31 May 2010 will be at a dividend rate that is equivalent to the TELYS3 dividend rate including the ‘step-up’ margin.

Like TELYS3, SGH may Convert or Exchange all or some • of the TELYS4 on any Dividend Payment Date. However, unlike TELYS3, TELYS4 Holders will be able to demand Conversion or Exchange (the choice between Conversion or Exchange is at the election of SGH) if SGH breaches the Dividend and Capital Stopper. TELYS3 Holders currently do not have any right to require Conversion or Exchange of their TELYS3.

Some of the terms of issue of TELYS3 will no longer be • as effective if the Share Scheme is implemented:

TELYS3 Holders may no longer derive as much benefit –from the TELYS3 dividend and capital stopper which is limited to Seven and does not extend to SGH.

Notwithstanding its other obligations under the –TELYS3 Undertaking, Seven Directors may defer paying dividends on TELYS3 while any dividends on TELYS4 are unpaid.

In the future Seven will not convert the TELYS3 to –ordinary Seven Shares. Consequently, TELYS3 Holders will no longer have any chance to obtain an ordinary share interest in Seven.

Although TELYS3 dividends will, at a practical level, –become similar to cumulative dividends, there is no guarantee that TELYS3 Holders will receive those dividends before the TELYS3 are Exchanged, which may be delayed for a significant period of time.

A commitment by Seven Directors to use reasonable –endeavours to achieve an offer for TELYS3 Holders in the event of a takeover or a scheme of arrangement would no longer have any application because a future takeover bid or scheme of arrangement of Seven is highly unlikely. This commitment would also not apply in relation to a change of control of SGH.

You may elect, subject to the conditions to the TELYS4 Offer being satisfied, to receive TELYS4 if the TELYS3 Scheme does not proceed but the Share Scheme does proceed by accepting the TELYS4 Offer. Further information about the TELYS4 Offer is set out in the TELYS4 Prospectus and section 6 below.

INDEPENDENT EXPERT’S CONCLUSIONThe Independent Expert has concluded that the TELYS3

Scheme is in the best interests of TELYS3 Holders.

The Independent Expert, Deloitte, has concluded that the • TELYS3 Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders.

In addition, the Independent Expert has concluded that • the value of the TELYS3 could be discounted by 5% and 10% to reflect the impact on TELYS3 if the Share Scheme is approved and the TELYS3 Scheme is not.

The Independent Expert’s Report is set out in section 6 of Part B of this Scheme Booklet. The Independent Expert’s Report is an important document, which you should read in full. It contains important assumptions and qualifications to the opinions expressed.

FINANCIAL BENEFITS, INCLUDING ENHANCED DIVIDEND COVERAGE AND INCREASED CAPITAL BASE

Seven will be transformed from an investment holding • company to a significant Australian diversified operating and investment group with market leading businesses and investments, forecast FY2011 revenue of $2.8 billion, NPAT of $187 million, and shareholders equity of $2.8 billion.

The Recommended Proposal provides TELYS3 Holders • with enhanced dividend coverage. The current Seven dividend coverage ratio is currently 3.4x, while the pro forma SGH dividend coverage ratio is forecast to be 5.6x. The Recommended Proposal will also enhance the ability to frank dividends.

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Section 3 17

The SGH balance sheet will be conservatively geared on • a net debt basis and SGH will maintain a strong cash and liquidity position.

Summarised pro forma financial information for SGH

is set out below:

Seven SGH pro forma % change

Forecast FY2011 NPAT1

$111 million $187 million +68%

Forecast FY2011 dividend coverage

3.4x 5.6x +65%

Pro forma total assets2,3

$2.899 billion $4.171 billion +44%

Pro forma share-holder’s equity2,3

$2.227 billion $2.756 billion +24%

Notes:1 NPAT (pre TELYS3 dividend)2 Includes National Hire3 Pro forma at 31 December 2009

The assumptions underlying the SGH forecasts and the sensitivities of the forecasts are set out in section 3.11 of Part B of this Sheme Booklet. Forward looking statements are based on current expectations and results. They are subject to inherent risks and uncertainties. Actual events or results may differ materially from the expectation expressed or implied in such forward looking statements.

See sections 1.2(A), 2.6(A) and 3.11(F) of Part B of this Scheme Booklet for full details of the assumptions underlying the forecast financial information set out above.

TELYS3 WILL BECOME A SUBSIDIARY COMPANY HYBRID, ISSUED BY A COMPANY WITH NO QUOTED ORDINARY SHARES

If the Share Scheme is implemented, the Seven Shares • will cease to be quoted and Seven will become an indirect wholly-owned subsidiary of SGH. Although TELYS3 will themselves continue to be quoted on ASX, TELYS3 will become a subsidiary company hybrid issued by a company with no quoted ordinary shares.

This may potentially make TELYS3 less appealing to • new investors.

TELYS3 FREE FLOAT MAY DECLINEIf the TELYS3 Scheme is not implemented but the Share • Scheme does proceed, individual TELYS3 Holders may have elected to exchange their TELYS3 for TELYS4 on an individual basis (subject to a minimum acceptance level with a face value in aggregate of $100 million) pursuant to the TELYS4 Offer. Any such exchanges will reduce the total number of TELYS3 on issue, potentially reducing secondary market liquidity of TELYS3. This in turn could depress the market price of TELYS3 and make it more difficult for TELYS3 Holders to dispose of their TELYS3.

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4WHY YOU MAY CONSIDER VOTING AGAINST THE TELYS3 SCHEME

section 4 19

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The TELYS3 Scheme has a number of potential disadvantages that TELYS3 Holders should consider in deciding whether or not to vote in favour of the TELYS3 Scheme.

While the Independent Seven Directors are of the opinion that these disadvantages and risks are outweighed by:

the advantages of the TELYS3 Scheme (as set out in • section 1 and 3 of Part A of this Scheme Booklet); and

the risks to TELYS3 Holders if the Share Scheme proceeds • but the TELYS3 Scheme does not (as set out in sections 4 and 5 of this Part A of this Scheme Booklet), TELYS3 Holders should consider their individual circumstances and make their own determination on whether to vote in favour of the TELYS3 Scheme.

CHANGE IN THE NATURE OF INVESTMENTTELYS4 represent a change in the nature of TELYS3 Holders’

investment and an exposure to different businesses,

investments, risks and earnings profiles.

TELYS4 Holders will be exposed to the risks relating to SGH.

TELYS4 Holders will be exposed to the risks relating to the • newly formed SGH, including:

possible security price variations; 1.

increased debt levels and the ability to refinance 2. this debt; and

risks associated with WesTrac Group’s existing business.3.

(See section 5 of Part B of this Scheme Booklet for further details.)

TELYS3 DIVIDENDS WILL BECOME, IN PRACTICAL TERMS, CUMULATIVE

If the Share Scheme is implemented but the TELYS3 Scheme • is not, the TELYS3 Undertaking will become effective and will result in TELYS3 dividends becoming, for all practical purposes, cumulative in nature. For a summary of the TELYS3 Undertaking, see below and section 5.7 of Part A of this Scheme Booklet. For a copy of the TELYS3 Undertaking, see Annexure 2 of Part A of this Scheme Booklet.

The current terms of the TELYS3 provide that Seven will • only pay a dividend if Seven Directors exercise their discretion to do so.

Under the TELYS3 Undertaking, Seven undertakes in favour • of TELYS3 Holders from time to time that, if Seven has funds legally available to pay a TELYS3 dividend in accordance with the TELYS3 terms, it will do so as long as there is no TELYS4 Dividend Stopper Event in effect. If Seven has been unable to pay a dividend but subsequently has funds available to pay a dividend on any of the next two dividend payment dates, it will pay an optional dividend equal to the amount of the missed dividend as long as there is no TELYS4 Dividend Stopper Event in effect..

This will allow Seven to make up for 2 consecutive unpaid • dividends. Where a dividend is missed but then an optional dividend is paid to make up for it, this will “refresh” the capacity to pay an optional dividend, so that the dividend which had been paid would not count for the purpose of determining whether two consecutive dividends have been missed.

If more than two dividends on TELYS3 are not paid (and • no optional dividend has been paid to make up for them), TELYS3 will be Exchanged for cash provided the Seven constitution is amended to facilitate the payment of the cumulative dividends by no later than 24 October 2014. However, in this scenario Seven may defer the redemption for up to 80 years from the day before the Effective Date of the Share Scheme. An additional payment will be made to reflect the future value (as at the date of Exchange) of the previously unpaid dividends, compounded semi annually at the Rate on Exchange. This payment will be reduced by the future value of any dividends actually paid during the same period and compounded semi annually at the Rate on Exchange.

The Seven constitution is expected to be able to be • amended to make this change following the Share Scheme, since SGH will then own 100% of ordinary shares of Seven.

This means that if three or more consecutive dividends • are unpaid, and not made up by an optional dividend, the TELYS3 will still effectively be cumulative but deferrable for up to 80 years.

The Rate on Exchange will be the Dividend Rate calculated • in accordance with the TELYS3 terms of issue except that for purposes of this calculation, where the actual Market Rate is not known as of the dividend payment date, the Market Rate will be the long term swap rate.

If the Seven constitution is not amended by 24 October 2014 • (contrary to Seven’s expectation), then Seven will redeem all the outstanding TELYS3 on 1 December 2014 for their face value plus the unpaid amount of dividends for the previous two dividend periods in accordance with the TELYS3 terms. No extra amounts will be paid on Exchange.

PRICE UNCERTAINTYThe price at which TELYS4 trade on ASX after the TELYS3

Scheme is implemented may be influenced by a range

of factors and they may trade below the current prices

of TELYS3.

The levels of liquidity and volatility at which TELYS4 • may trade could differ from those at which TELYS3 currently trade.

The market price of TELYS4 may also fluctuate due to • movements in Australian and international equity markets, investor perceptions, worldwide economic conditions,

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Section 4 21

interest rate movements and movements in the market price of SGH Shares.

There is no guarantee that TELYS4 will trade at or above • the recent trading prices of TELYS3.

LEVERAGE AND INTEREST COSTS SGH will have pro forma borrowings of approximately • $500 million and cash of $507 million following implementation of the transaction whereas Seven (pro forma) currently has minimal debt and $1,042 million in cash.

Notwithstanding that SGH will have a conservative capital • structure, SGH’s borrowings will expose TELYS4 Holders to changes in interest rates, risk associated with refinancing and the risk of default on loans.

RELATED PARTY INTERESTSCertain Seven directors have a different interest from other • Seven Shareholders. The interests of those directors are described in section 9.4 of Part B of this Scheme Booklet. In summary, entities of which Kerry Stokes, Peter Gammell and Ryan Stokes are directors have an existing interest in the WesTrac Group which has entered into transactions with Seven to implement the Recommended Proposal, and will therefore obtain benefits from the transaction in a capacity other than as Seven Shareholder if the Recommended Proposal proceeds.

Although safeguards have been put in place to manage the • conflicts of interest involved, including the commissioning of the Independent Expert’s Report, Seven establishing an Independent Board Committee, and the fact that the Recommended Proposal will not proceed unless Unrelated Shareholders holding at least 75% of the shares voted vote in favour of the Share Scheme, some TELYS3 Holders may prefer that Seven not enter into a transaction under which related parties of Seven have a different interest from other Seven Shareholders and TELYS3 Holders.

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5OTHER RELEVANT CONSIDERATIONS

section 5 23

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5.1 WHAT TELYS3 HOLDERS WILL RECEIVE UNDER THE TELYS3 SCHEMEIf the TELYS3 Scheme is implemented, each TELYS3 Holder on the TELYS3 Scheme Record Date will receive the TELYS3 Scheme Consideration, which is one TELYS4 for each TELYS3 held by that person on the TELYS3 Scheme Record Date.

The TELYS3 Scheme Record Date is expected to be 7.00pm (Sydney time) on 6 May 2010. The TELYS3 Scheme Consideration will be issued on the Implementation Date for the TELYS3 Scheme, which is currently expected to be 13 May 2010.

Ineligible Foreign Holders will not receive TELYS4 under the TELYS3 Scheme. Instead, the TELYS4 that would otherwise be issued to Ineligible Foreign Holders will be issued to the Nominee. The Nominee will sell those securities on behalf of the Ineligible Foreign Holders, who will receive a cash payment from the proceeds of that sale. See section 4.5 of Part B of this Scheme Booklet for further details.

5.2 MAY 2010 DIVIDENDIrrespective of whether the TELYS3 Scheme is implemented, TELYS3 Holders are expected to receive the dividend for the period commencing 30 November 2009 and ending on 30 May 2010.

If the TELYS3 Scheme or the TELYS4 Offer is implemented before the record date for the TELYS3 dividend payable on 31 May 2010, TELYS3 Holders will be paid an expected fully franked dividend of $2.4154 per TELYS3 in respect of the TELYS4 received under the TELYS3 Scheme or the TELYS4 Offer.

If the TELYS3 Scheme is not implemented but the Share Scheme is implemented, TELYS3 Holders who accepted the TELYS4 Offer will be paid an expected fully franked dividend of $2.4154 and remaining TELYS3 Holders will be paid an unfranked dividend of the equivalent grossed up amount, being $3.4506 per TELYS3 as a result of the TELYS3 Undertaking being effective.

5.3 STEP-UPIrrespective of whether the TELYS3 Scheme or the TELYS4 Offer is implemented, TELYS3 Holders will receive the benefit of a step-up in the dividend rate after 31 May 2010.

The dividend rate in respect of TELYS3 is calculated based on a tax-adjusted aggregate of the Bank Bill Swap Rate for 180 day bills applying on the first Business Day of the relevant dividend period and a gross margin that is presently 2.50% per annum. This gross margin in respect of all dividends from 31 May 2010 will step-up by 2.25% per annum to 4.75% per annum.

The dividend rate in respect of TELYS4 will be calculated in the same way as would be the case for TELYS3 during the corresponding period. If the TELYS3 Scheme is implemented or if TELYS4 are issued pursuant to the TELYS4 Offer by 31 May 2010,

the dividend rate used in calculating the first TELYS4 dividend for the Dividend Period ending on 30 May 2010 will be calculated based on the corresponding TELYS3 dividend rate before the step-up. All dividends paid on TELYS4 after 31 May 2010 will be based on a gross margin of 4.75% per annum, being the same amount as the corresponding TELYS3 dividend rate after the 31 May 2010 step-up.

5.4 ROLE OF THE IBC IN DEVELOPMENT OF THE RECOMMENDED PROPOSAL Seven’s Board of Directors established the IBC and put in place communication protocols to manage conflicts of interest arising in respect of the Recommended Proposal. The IBC extensively negotiated the Recommended Proposal on behalf of Seven and oversaw detailed due diligence in respect of WesTrac Group (including direct discussions with senior Caterpillar executives).

The IBC’s due diligence and negotiations were supported by professional advisers including Grant Samuel and J.P. Morgan (financial and strategic advisers), Freehills (legal adviser), KPMG Transaction Services (investigating accountant and financial and commercial due diligence) and Ernst & Young (tax advisor).

As a result of the IBC’s negotiations with ACE, the indicative terms originally proposed by ACE in November 2009 were significantly enhanced in Seven’s favour and the Recommended Proposal (including the TELYS3 Scheme) was agreed.

5.5 IMPLICATIONS AND RISKS FOR TELYS3 HOLDERS IF THE TELYS3 SCHEME DOES NOT PROCEED BUT THE SHARE SCHEME DOES PROCEEDIf the TELYS3 Scheme is not approved and implemented:

TELYS3 Holders will continue to hold TELYS3, unless • they have accepted the TELYS4 Offer and the minimum acceptance condition to that offer is satisfied. See the TELYS4 Prospectus and section 6 for details of the TELYS4 Offer, under which TELYS3 Holders can elect to exchange each TELYS3 for one TELYS4 on an individual basis (subject to a minimum acceptance level with a face value in aggregate of at least $100 million);

it will not prevent the Share Scheme proceeding, and • if the conditions precedent to the Share Scheme are met, including that the Share Scheme is approved by holders of Seven Shares and the Court:

the Share Scheme will proceed even if the TELYS3 1. Scheme does not;

all Seven Shares will be transferred to WesTrac Holdings 2. and Seven will become an indirect wholly-owned subsidiary of SGH with no ordinary shares quoted for trading on a stock exchange;

TELYS3 Holders who do not accept the TELYS4 Offer 3. will obtain the benefit of the TELYS3 Undertaking which

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Section 5 25

Seven will enter into with effect before the Effective Date of the Share Scheme, with the effects described in section 5.7 of Part A of this Scheme Booklet;

TELYS3 dividends will no longer be franked, but will 4. be paid at the grossed up amount to compensate for this; and

the dividend rate in respect of TELYS3 (which is 5. calculated based on a tax-adjusted aggregate of the Bank Bill Swap Rate for 180 day bills applying on the first Business Day of the relevant dividend period and a margin) will increase in respect of dividends after 31 May 2010 as a result of the ‘step-up’ of the gross margin from 2.50% per annum to 4.75% per annum.

TELYS3 Holders should be aware of particular risks to which they could be exposed if the Share Scheme is approved but the TELYS3 Scheme is not approved. These include:

Some of the terms of issue of TELYS3 will no longer • be as effective if the Share Scheme is implemented:

TELYS3 Holders may no longer derive as much benefit –from the TELYS3 dividend and capital stopper which is limited to Seven and does not extend to SGH.

Notwithstanding its other obligations under the –TELYS3 Undertaking, Seven Directors may defer paying dividends on TELYS3 while any dividends on TELYS4 are unpaid.

In the future Seven will not convert the TELYS3 to –ordinary Seven Shares. Consequently, TELYS3 Holders will no longer have any chance to obtain an equity interest in Seven.

Although TELYS3 dividends will, at a practical level, –become similar to cumulative dividends, there is no guarantee that TELYS3 Holders will receive those dividends before the TELYS3 are Exchanged, which may be delayed for a significant period of time.

A commitment by Seven Directors to use reasonable –endeavours to achieve an offer for TELYS3 Holders in the event of a takeover or a scheme of arrangement would be unlikely to have any application because a future takeover bid or scheme of arrangement of Seven is highly unlikely. This would also not apply on a change of control of SGH.

TELYS3 will not be converted into Seven Shares or redeemed • on 31 May 2010, as Seven is permitted to do under the terms of issue of TELYS3.

There is a risk that, as a result of these changes and despite • the terms of the TELYS3 Undertaking, TELYS3 may become a less attractive security for some investors which may adversely affect their trading price. The Independent Expert has expressed the view that the value of the TELYS3 could be discounted by 5% to 10% to reflect the impact on TELYS3 if the Share Scheme is approved and the TELYS3 Scheme is not.

TELYS3 Holders may wish to consider mitigating these risks by accepting the TELYS4 Offer. The TELYS4 Offer is contained in the TELYS4 Prospectus, which you should read in full before deciding whether to accept the TELYS4 Offer.

5.6 THE TELYS3 SCHEME IS CONDITIONAL The TELYS3 Scheme is subject to various conditions, including the Share Scheme being approved and implemented. Accordingly, if the Share Scheme is not implemented, the TELYS3 Scheme will not proceed even if it is approved at the TELYS3 Scheme Meeting.

A summary of the conditions to the TELYS3 Scheme and their status as at the date of this Scheme Booklet are set out in section 4.3 of Part B of this Scheme Booklet.

5.7 TELYS3 UNDERTAKINGThe TELYS3 Undertaking will be entered into by Seven if:

the Share Scheme is approved; but •

the TELYS3 Scheme is not approved.•

The TELYS3 Undertaking is in the form of a deed poll, which is a unilateral, binding commitment made by Seven in favour of TELYS3 Holders from time to time.

The Seven Directors believe that the commitments made in the TELYS3 Undertaking are not materially prejudicial to the interests of TELYS3 Holders and are beneficial to TELYS3 Holders in that they ameliorate to some extent the downside which TELYS3 Holders may otherwise suffer if the Share Scheme is approved but the TELYS3 Scheme is not.

As Seven’s constitution is ambiguous as to the scope of the power to amend the terms of issue of shares, there was doubt as to whether direct amendment of the terms by Seven using the amendment procedure specified in the TELYS3 terms would be effective. Therefore Seven proposes to achieve the effect of having amended the TELYS3 terms through commitments made in the TELYS3 Undertaking.

If:

the Share Scheme becomes Effective; and•

the TELYS3 Scheme is not approved by TELYS3 Holders • at the TELYS3 Scheme Meeting or the Court, or is not implemented for any other reason,

the TELYS3 Undertaking entered into by Seven will become unconditional and effective.

Pursuant to the TELYS3 Undertaking, Seven has undertaken that any time it exercises its discretion to either Convert or Exchange any TELYS3 under the TELYS3 terms of issue, it will exercise its discretion to Exchange, rather than Convert.

Seven has also undertaken that for each Dividend Period following the effective date, it will exercise its discretion to pay the full dividend to TELYS3 Holders as calculated under

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the TELYS3 Terms of Issue. The dividend will only be paid if Seven has the funds legally available to pay the dividend and there is no TELYS4 Dividend Stopper Event in effect.

If Seven has not paid a regularly scheduled dividend, Seven undertakes that it will exercise its discretion to declare an optional dividend the next time it has funds legally available to pay the entire previous unpaid dividend for either of the previous two dividend periods (assuming no TELYS4 Dividend Stopper Event is in effect at the time of payment).

Under the TELYS3 Undertaking, Seven will use its best endeavours (including putting any necessary resolutions to Seven shareholders) to ensure that it is permitted under its constitution to Exchange all TELYS3 for the face value of the TELYS3, plus the Special Exchange Amount, but as described below there may be a substantial delay before this occurs. The Special Exchange Amount in respect of all TELYS3 Holders will be the future value (as of the date the TELYS3 are Exchanged) of the aggregate amount of dividends payable to all TELYS3 Holders from the 31 May 2010 to the date of Exchange, compounded semi annually at the Rate On Exchange.

This amount will be reduced by the future value of any dividends actually paid during the same period compounded semi annually at the same Rate on Exchange.

The Rate on Exchange will be the Dividend Rate calculated in accordance with the TELYS3 Terms of Issue except that for purposes of this calculation, where the actual Market Rate is not known as of the dividend payment date, the Market Rate will be the long term swap rate.

If the Seven constitution is amended on or before 24 October 2014 to permit Seven to Exchange the TELYS3 for the face value plus the net Special Exchange Amount , then Seven will have the discretion to defer the Exchange until the last dividend payment date before the 80 year anniversary of the day before the Effective Date of the Share Scheme.

If the Seven constitution is not amended by 24 October 2014, then Seven has undertaken to Exchange all TELYS3 by 1 December 2014. In those circumstances, Seven is not obligated to pay more than the face value of the TELYS3, plus the amount of unpaid dividends for the two dividend periods preceding the date of Exchange.

Nothing in the TELYS3 Undertaking will require Seven to pay an amount to Exchange the TELYS3 in an insolvent winding up beyond any amount which it has available or is able to obtain from profits or proceeds of a new issue.

See Annexure 2 to Part A of this Scheme Booklet for a copy of the TELYS3 Undertaking.

5.8 TAXATION IMPLICATIONSA general guide to the Australian tax consequences of the TELYS3 Scheme for certain TELYS3 Holders is set out in the Tax Letters in section 8 of Part B of this Scheme Booklet. This guide is expressed in general terms and is not intended to provide taxation advice in respect of the particular circumstances of any TELYS3 Holders. TELYS3 Holders should seek their own taxation advice.

5.9 ALL OR NOTHING PROPOSAL If the TELYS3 Scheme is approved and implemented, it will bind all TELYS3 Holders including those who do not vote at the TELYS3 Scheme Meeting and those who vote against the TELYS3 Scheme. This means that, if the TELYS3 Scheme proceeds, all TELYS3 Holders at the TELYS3 Scheme Record Date (currently expected to be 6 May 2010) will have their TELYS3 transferred to WesTrac Holdings in return for the TELYS3 Scheme Consideration.

Whilst the TELYS3 Scheme will result in an ‘all or nothing’ outcome, under the TELYS4 Offer, TELYS3 Holders will be entitled to individually elect to transfer each of their TELYS3 to WesTrac Holdings in exchange for TELYS4 on a one for one basis, subject to the TELYS4 Offer Conditions being satisfied. Further details in relation to the TELYS4 Offer are set out in the TELYS4 Prospectus and section 6 of Part A of this Scheme Booklet.

5.10 SCRIP-FOR-SCRIP CGT ROLLOVERMOST TELYS3 HOLDERS WHO WOULD OTHERWISE MAKE

A CAPITAL GAIN IN RESPECT OF THE DISPOSAL OF THEIR

TELYS3 UNDER THE TELYS3 SCHEME OR TELYS4 OFFER

SHOULD BE ELIGIBLE TO RECEIVE SCRIP-FOR-SCRIP CGT

ROLLOVER RELIEF.

Seven has applied for a class ruling from the ATO • confirming that TELYS3 Holders who would otherwise make a capital gain in respect of the disposal of their TELYS3 under the TELYS3 Scheme or the TELYS4 Offer should be eligible to receive scrip-for-scrip rollover relief.

Scrip-for-scrip rollover relief enables certain Australian • resident TELYS3 Holders to defer any CGT liability until the time they dispose of the TELYS4 that they receive under the TELYS3 Scheme or the TELYS4 Offer.

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6DETAILS OF THE TELYS4 OFFER

section 6 27

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6.1 TELYS4 PROSPECTUSThis section provides a summary only of the TELYS4 Offer. The TELYS4 Offer is made in the TELYS4 Prospectus. This Scheme Booklet forms a part of the TELYS4 Prospectus, but does not include all relevant information about the TELYS4 Offer. You should read the TELYS4 Prospectus together with this Scheme Booklet in full before deciding whether to accept the TELYS4 Offer.

6.2 DESCRIPTION OF THE TELYS4 OFFERThe TELYS4 Offer comprises a conditional offer by WesTrac Holdings (a wholly-owned subsidiary of SGH) to acquire all or some of the issued TELYS3 in exchange for new fully paid TELYS4 issued by SGH on a one for one basis, subject to the following conditions (TELYS4 Offer Conditions) being satisfied:

the Share Scheme becoming Effective and the 1. TELYS3 Scheme not becoming Effective; andminimum acceptances being received from all 2. TELYS3 Holders pursuant to the TELYS4 Offer for at least $100m face value of TELYS4.

The TELYS4 Offer is only open to TELYS3 Holders. No general public offer will be made under the TELYS4 Offer, and no additional funds are sought to be raised under the TELYS4 Offer.

All TELYS4 issued under the TELYS4 Offer will rank equally with each other. See sections 7 and 8 of Part A of this Scheme Booklet for further details in relation to the terms of TELYS4, and section 10 for questions and answers in relation to TELYS4 and the TELYS4 Offer.

6.3 APPLICATIONS UNDER THE TELYS4 OFFERAll TELYS3 Holders will be eligible to apply under the TELYS4 Offer for TELYS4 in exchange for all (but not some) the TELYS3 that they hold. No general public offer will be made.

The TELYS4 Offer is made in the TELYS4 Prospectus, which you should read in full together with this Scheme Booklet before deciding whether to accept the TELYS4 Offer.

An application under the TELYS4 Offer, which can only be made by ticking the appropriate box on your TELYS3 Scheme Proxy Form, is an offer by the TELYS3 Holder to transfer the TELYS3 that they hold on the TELYS3 Record Date to WesTrac Holdings in return for TELYS4 issued by SGH on a one for one basis, and on the terms and conditions set out in this Scheme Booklet and the TELYS prospectus. To the extent permitted by law, applications under the TELYS4 Offer are irrevocable. Acceptance by WesTrac Holdings of an application will give rise to a binding contract, if the conditions set out in section 6.1 and 6.3 are met.

By ticking the appropriate box on your TELYS3 Scheme Proxy Form you are deemed to have appointed WesTrac Holdings as your agent to sign the transfer form to effect the transfer of your TELYS3 to WesTrac Holdings. You will be deemed to have applied for TELYS4 on the terms and conditions set out in this Scheme Booklet and the TELYS4 Prospectus.

It is important that any application under the TELYS4 Offer(by ticking the appropriate box on your TELYS3 Scheme

Proxy Form) is made in addition to your vote under the TELYS3 Scheme, if, having read the TELYS4 Prospectus you wish to receive TELYS4 even if the TELYS3 Scheme does not go ahead (subject to the satisfaction of the TELYS4 Offer Conditions).

Applications made under the TELYS4 Offer can only be made pursuant to an application form (in this case, the TELYS3 Scheme Proxy Form) that is accompanied by the TELYS4 Prospectus (of which this Scheme Booklet forms a part). By making an application under the TELYS4 Offer you declare that you were given access to the TELYS4 Prospectus, together with the TELYS3 Scheme Proxy Form. The TELYS4 Prospectus accompanies this Scheme Booklet and the TELYS3 Scheme Proxy Form.

6.4 TELYS4 OFFER CONDITIONSAs noted above, the TELYS4 Offer is conditional on the TELYS4 Offer Conditions being satisfied.

This means that any application made by a TELYS3 Holder under the TELYS4 Offer will only be accepted if the Share Scheme goes ahead, if the TELYS3 Scheme does not go ahead, and if the minimum acceptance level is reached.

SGH will update TELYS3 Holders as to the status of those conditions, however, applications under the TELYS4 Offer will be made whilst these conditions have not yet been satisfied. This means if you wish to accept the TELYS4 Offer, you will need to do so by the deadline for receipt of proxies, which will be before the outcome of the Share Scheme is known.

6.5 ASX LISTING OF TELYS4A conditional application has been made for quotation of the TELYS4 on ASX.

That application is conditional on either: the TELYS3 Scheme being implemented; or 1. the TELYS4 Offer Conditions being satisfied. 2.

ASX takes no responsibility for this Scheme Booklet, the TELYS4 Prospectus or the investment in TELYS4 to which it relates. The fact that ASX may quote TELYS4 is not to be taken as an indication of the merits of the TELYS4 or the TELYS4 Offer.

6.6 BROKERAGE, COMMISSION AND STAMP DUTYNo brokerage, commission or stamp duty is payable by TELYS3 Holders under the TELYS4 Offer on acquisition of TELYS4 pursuant to that offer.

6.7 INELIGIBLE FOREIGN TELYS3 HOLDERSIneligible Foreign Holders should review section 4.5 of Part B of this Scheme Booklet for information relevant to their ineligibility to participate in the TELYS3 Scheme and the TELYS4 Offer.

6.8 TRADING IN TELYS3Any TELYS3 Holder that applies to receive TELYS4 under the TELYS4 Offer will not be able to trade their TELYS3 once the application has been received. Trading in such TELYS3 will be restricted unless the TELYS4 Offer does not proceed. By accepting the TELYS4 Offer you give the warranties set out in section 4.7 of Part B of this Scheme Booklet.

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7SUMMARY OF TERMS OF TELYS4

section 7 29

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All references in this section to clauses are to clauses in the TELYS4 Terms of Issue which are attached to Annexure 3 of Part A of this Scheme Booklet.

Issuer SGH.

Security Transferable Extendable Listed Yield Shares (TELYS4) which are non-cumulative, redeemable and convertible preference shares in SGH.

Face Value $100.00 per TELYS4.

Dividends Each holder of TELYS4 is entitled to a preferred, non-cumulative, fl oating rate dividend equal to:

Dividend = Dividend Rate x Face Value x N

365

N is the number of days from (and including) the preceding Dividend Payment Date until (but not including) the relevant Dividend Payment Date.

The dividends will be payable on each TELYS4 in arrears on 31 May and 30 November of each year unless the TELYS4 are Converted or Exchanged under the Terms of Issue.

In respect of the fi rst Dividend Period only, the dividend will be calculated as follows (rather than as described above):

• if the TELYS4 are allotted on or before 14 May 2010, TELYS4 Holders will receive an expected fully franked dividend of $2.4154, being 4.8440% per annum (the Dividend Rate for the Dividend Period from 30 November 2009 until 30 May 2010) x $100 x 182/365; and

• if the TELYS4 are allotted after 14 May 2010, the amount calculated applying the formula in clause 2.1 as if:

– the Market Rate were the Bank Bill Swap Rate for 180 day bills applying on 31 May 2010; and

– the Dividend Period had commenced on 31 May 2010 rather than on the date of allotment.

The payment of Dividends is at the Directors’ discretion and is subject to there being suffi cient funds legally available for the payment of dividends.

See clauses 2.1 and 2.4 of the Terms of Issue.

Dividend Rate The Dividend Rate for each Dividend Period is calculated as:

Dividend Rate = (Market Rate + Margin) x (1 – T)

where:

Market Rate means the Bank Bill Swap Rate for 180 day bills applying on the fi rst business day of each Dividend Period expressed as a percentage per annum.

Margin means 4.75% per annum.

T means the Australian corporate tax rate applicable to the franking account of SGH as at the relevant Dividend Payment Date, expressed as a decimal.

Franking SGH expects the dividends paid on TELYS4 to be fully franked. If a dividend is not fully franked, the dividend will be grossed up to compensate for the unfranked component.

See clause 2.3 of the Terms of Issue.

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Section 7 31

Conversion or

Exchange by SGH

TELYS4 are perpetual securities and have no maturity. SGH may Exchange some or all of the TELYS4 for $100 in cash for each TELYS4 or Convert some or all of the TELYS4 to SGH Shares at its election on any Dividend Payment Date. SGH also has the right to:

• Convert or Exchange TELYS4 in certain circumstances including where the SGH Directors resolve that there has been a change or proposed change in a law, interpretation, governmental ruling (including one relating to taxation) or accounting standard (or interpretation of an accounting standard) which will:

– materially increase Seven’s costs in retaining TELYS4 on issue;

– aff ect the franking and availability of franking credits in respect of TELYS4;

– aff ect whether TELYS4 are classifi ed entirely as equity for accounting purposes; or

– impose additional, unacceptable requirements on SGH; or

• Convert or Exchange TELYS4 if a takeover bid or scheme of arrangement is made in respect of SGH.

SGH cannot elect to Convert or Exchange only some TELYS4 if such Conversion or Exchange would result in there being less than $100 million in aggregate Face Value of TELYS4 on issue.

See clauses 3.3 to 3.5 of the Terms of Issue.

‘Dividend and Capital

Stopper’, and Conversion or

Exchange by TELYS4 Holders

If for any reason a dividend has not been paid in full within 20 Business Days after its Dividend Payment Date, a ‘Dividend and Capital Stopper’ will come into eff ect, such that SGH must not without approval of a TELYS4 Holder special resolution resolve to pay, or pay, a cash dividend or make any distribution on any share capital over which TELYS4 rank in priority for participation in profi ts, or redeem, reduce, cancel, or acquire for any consideration any share capital of SGH (other than a TELYS4), until (broadly):

• two consecutive dividends on TELYS4 thereafter have been paid in full;

• an optional dividend has been paid to the TELYS4 Holders equal to the unpaid amount (if any) of the two immediately preceding dividends to which they were entitled but which were unpaid prior to the date of payment of the optional dividend; or

• all TELYS4 have been Converted or Exchanged.

If this ‘Dividend and Capital Stopper’ comes into eff ect and is breached by SGH, a TELYS4 Holder may notify SGH in writing demanding Conversion or Exchange of their TELYS4. SGH must then elect to either Convert or Exchange that holder’s TELYS4 on the next Dividend Payment Date that is at least 25 Business Days after the notice is given by the TELYS4 Holder.

Conversion Ratio The ratio at which TELYS4 will Convert into SGH Shares will be calculated by reference to the market price of SGH Shares during the 20 Business Days immediately preceding, but not including, the Conversion Date, less a Conversion discount of 2.5%.

See clauses 3.7 to 3.9 of the Terms of Issue.

Ranking TELYS4 rank equally amongst themselves in all respects and are subordinated to all creditors but rank in priority to SGH Shares.

Participation TELYS4 confer no rights to subscribe for new securities in SGH or to participate in any bonus issues.

Ownership restrictions The Broadcasting Services Act limits cross-media ownership. Certain holders of television and radio licences and newspaper proprietors may not hold Company Interests of more than 15% of SGH. The restrictions under the Broadcasting Services Act and the divestment powers under the SGH Constitution which apply to the SGH Shares will also apply to TELYS4 and have eff ect only at such time as SGH and entities in which SGH can vote or is a substantial holder, is subject to the ownership restrictions of the Broadcasting Services Act.

Voting rights TELYS4 do not carry a right to speak or to vote at general meetings of SGH, except in limited circumstances, in which case TELYS4 Holders will have one vote per TELYS4 held.

Quotation SGH has applied for offi cial quotation of TELYS4 on ASX.

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8COMPARISON OF TELYS3 AND TELYS4

section 8 33

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TELYS3 TELYS4TELYS3 after TELYS3 Undertaking

Issuer Seven SGH Seven

Legal form Preference share Preference share Preference share

ASX quoted? Yes Yes Yes

Credit rating Unrated Unrated Unrated

Maturity Perpetual Perpetual 80 years1

Initial Margin (gross) 2.50% per annum 2.50% per annum (prior to 31 May 2010)

4.75% per annum (from 31 May 2010)

2.50% per annum

Step-up Margin (gross) 2.25% per annum n/a 2.25% per annum

Dividends Non-cumulative, frankable, floating rate

Non-cumulative, frankable, floating rate

De facto cumulative, unfranked, floating rate

Assumed level of franking 100% 100% 0%

Rights if dividend is not fully franked

Gross-up Gross-up Gross-up

Source of income for dividend payments

Distributable profits and retained earnings of Seven

Distributable profits and retained earnings of SGH including dividends which flow up from to SGH from its subsidiaries, such as WesTrac Group and Seven

Distributable profits and retained earnings of Seven

Dividend and capital stopper If a dividend has not been paid in full, a ‘dividend and capital stopper’ will apply to Seven only

If a dividend has not been paid in full, a ‘Dividend and Capital Stopper’ will apply to SGH, the new listed entity

If a dividend has not been paid in full, a ‘dividend and capital stopper’ will apply to Seven only

If the Share Scheme is approved, Seven will become a subsidiary of WesTrac Holdings with no quoted ordinary shares

When can the issuer exchange (including redeem) or convert?

On any dividend payment date from and including 31 May 2010

If a takeover bid or scheme of arrangement is made in respect of Seven

Certain other circumstances

On any dividend payment date

If a takeover bid or scheme of arrangement is made in respect of SGH


On any dividend payment date from and including 31 May 2010

If a takeover bid or scheme of arrangement is made in respect of Seven


Can holders request exchange or conversion?

No Yes, if there has been a breach of the Dividend and Capital Stopper.

SGH elects whether to exchange or convert

No

Note:1 Certain payments under the TELYS3 Undertaking will only be made on Exchange of the TELYS3, which could be delayed for up to 80 years.

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9THE TELYS3 SCHEME: QUESTIONS AND ANSWERS

section 9 35

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This section answers some frequently asked questions about the TELYS3 Scheme. It is not intended to address all relevant issues for TELYS3 Holders and should be read together with the remainder of this Scheme Booklet.

Question Answer Further information

The TELYS3 Scheme

What is the TELYS3 Scheme? The TELYS3 Scheme is a scheme of arrangement under the Corporations Act being proposed by Seven for the approval of TELYS3 Holders. If the TELYS3 Scheme is approved, all TELYS3 issued by Seven will be exchanged for a similar security, TELYS4, to be issued by SGH.

A scheme of arrangement is a statutory procedure that is commonly used to enable one company to acquire or merge with another company, or to acquire all securities in a particular class.

Together with the Share Scheme, the TELYS3 Scheme forms part of the Recommended Proposal.

Section 4 of Part B of this Scheme Booklet provides information on the implementation of the Recommended Proposal, including the TELYS3 Scheme.

A copy of the TELYS3 Scheme is contained in section 12 to Part B of this Scheme Booklet.

Why is the TELYS3 Scheme being proposed?

Under the TELYS3 Terms of Issue, if a takeover bid is made for Seven Shares, acceptance of which is recommended by the Seven Directors, or the Seven Directors recommend a members’ scheme of arrangement, the Company will use reasonable endeavours to procure that equivalent takeover offers are made to TELYS3 Holders or that they participate in the scheme of arrangement.

If Seven’s ordinary shareholders approve the Recommended Proposal, WesTrac Holdings and Seven will be merged to create SGH, which will have a significant impact on TELYS3, which carries risks for, and may have an adverse impact on TELYS3 Holders.

The TELYS3 Scheme provides for the proposed acquisition of all TELYS3 by WesTrac Holdings in exchange for TELYS4 to be issued by SGH, as part of this transaction.

What is the effect of the TELYS3 Scheme?

If the TELYS3 Scheme becomes Effective and is implemented:

all TELYS3 as at the TELYS3 Scheme Record Date will • be transferred to WesTrac Holdings, a wholly owned subsidiary of SGH; and

all TELYS3 Holders at the TELYS3 Scheme Record • Date (whether or not they voted for or against the TELYS3 Scheme) will receive TELYS4, to be issued by SGH, in exchange for their TELYS3.

The TELYS3 Scheme is conditional on the Share Scheme – if the Share Scheme is not approved and implemented, the TELYS3 Scheme will not proceed.

Assessment Of The TELYS3 Scheme

What is the Independent Seven Directors’ recommendation in respect of the TELYS3 Scheme?

The Independent Seven Directors unanimously recommend that you vote in favour of the TELYS3 Scheme, in the absence of a superior proposal.

Sections 1 and 3 of Part A and section 3.2 of Part B of this Scheme Booklet set out the reasons for the Independent Seven Directors’ unanimous recommendation.

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Section 9 37


What is the opinion of the Independent Expert?

The Independent Expert has concluded that the TELYS3 Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders.

A copy of the Independent Expert’s Report is contained in section 6 of Part B of this Scheme Booklet.

Are there any disadvantages associated with the TELYS3 Scheme?

The Independent Seven Directors unanimously believe that the potential advantages of the TELYS3 Scheme outweigh the potential disadvantages of the TELYS3 Scheme.

However, TELYS3 Holders should be aware of the potential disadvantages and risks related to the TELYS3 Scheme. These are described in section 2 and 4 of Part A of this Scheme Booklet and section 5of Part B of this Scheme Booklet

You should also review section 5 of Part A of this Scheme Booklet which sets out other considerations relevant to your assessment of the TELYS3 Scheme and section 5 of Part B of this Scheme Booklet which sets out in detail the risks associated with the TELYS3 Scheme.

Are there any disadvantages associated with the TELYS3 Scheme not proceeding if the ordinary Share Scheme does proceed?

Yes, this carries a number of risks and potential disadvantages for TELYS3 Holders described in section 1 and 3 of Part A of this Scheme Booklet.

Why have only some of the Seven Directors provided a recommendation?

Only the Independent Seven Directors have provided a recommendation in relation to the TELYS3 Scheme. These directors comprised the IBC, which evaluated and negotiated the Recommended Proposal (including the TELYS3 Scheme) on behalf of Seven.

The remaining Seven Directors are either associated with ACE (or the Related Holders or executives of Seven) and have not provided a recommendation on that basis.

Section 5.4 of Part A of this Scheme Booklet contains further details about the IBC and the Independent Seven Directors.

TELYS3 Scheme Consideration

What is the TELYS3 Scheme Consideration?

If the TELYS3 Scheme becomes Effective and is implemented, and you hold TELYS3 at the TELYS3 Scheme Record Date, you will receive the TELYS3 Scheme Consideration. The TELYS3 Scheme Consideration comprises one TELYS4 for each TELYS3 held at the TELYS3 Scheme Record Date.

The TELYS3 Scheme Consideration will only be paid in respect of TELYS3 held at the TELYS3 Scheme Record Date.

Detailed information about the TELYS3 Scheme Consideration is contained in section 5.1 ofPart A of this Scheme Booklet.

When will I receive my TELYS3 Scheme Consideration?

If the TELYS3 Scheme becomes Effective and is implemented, the TELYS3 Scheme Consideration to which you are entitled will be issued to you on the Implementation Date and your holding statements for TELYS4 will be sent to you shortly after the Implementation Date.

Refer to section 4.6 of Part B of this Scheme Booklet for further information.

What happens if I am an Ineligible Foreign Holder?

If you are Ineligible Foreign Holder, the TELYS4 that would otherwise be issued to you will be sold on your behalf by the Nominee. You will be paid the proceeds of sale (net of costs) promptly following the last sale of TELYS4 by the Nominee.

Detailed information relevant to foreign TELYS3 Holders is contained in section 4.5 of Part B of this Scheme Booklet.

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When can I start trading my TELYS4?

Trading on the ASX in TELYS4 issued under the TELYS3 Scheme is expected to commence on a deferred settlement basis on 30 April 2010 and is expected to commence on a normal settlement basis on 14 May 2010.

The exact amount of TELYS4 to be issued to you will not be confirmed to you until you receive your holding statement following the Implementation Date. If you trade in your TELYS4 during the deferred settlement period and prior to receipt of your holding statement, you do so at your own risk.

Will I have to pay any brokerage or stamp duty on the disposal of my TELYS3 under the TELYS3 Scheme?

No, there is no brokerage, stamp duty or other costs payable by you in connection with the disposal of your TELYS3 and your receipt of the TELYS3 Scheme Consideration, except if you are an Ineligible Foreign Holder.

Ineligible Foreign Holders whose TELYS3 Scheme Consideration is sold by the Nominee will incur brokerage in connection with that sale (such brokerage representing your pro rata share of the total brokerage incurred by the Nominee in connection with the sale of all TELYS4 attributable to Ineligible Foreign Holders).

TELYS3 Scheme Meetings, Voting And Approval

Who is entitled to vote on the TELYS3 Scheme at the TELYS3 Scheme Meeting?

Each person who is recorded on the TELYS3 Register as the holder of TELYS3 as at 7.00pm (Sydney time) on 18 April 2010 is entitled to attend and vote at the TELYS3 Scheme Meeting.

When and where will the TELYS3 Scheme Meeting be held?

The TELYS3 Scheme Meeting will be at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000 on 20 April 2010, commencing at 11.30am (Sydney time).

The Notice of Meeting for the TELYS3 Scheme Meeting is contained in Annexure 1 to Part A of this Scheme Booklet.

If I wish to vote at a TELYS3 Scheme Meeting, how do I vote?

You can vote at the TELYS3 Scheme Meeting:

by sending in the yellow Proxy Form in respect • of the TELYS3 Scheme Meeting in accordance with the instructions set out on that form;

in person; •

by attorney; or•

for TELYS3 Holders that are bodies corporate, • through a corporate representative.

See section 13 of Part A of this Scheme Booklet for further information regarding how to vote.

Is voting compulsory? Should I vote?

Voting is not compulsory. However, the Independent Seven Directors unanimously recommend that you vote in favour of the TELYS3 Scheme, in the absence of a superior proposal, and urge you to exercise your right to vote at the TELYS3 Scheme Meeting.

Your vote is important.

Refer to sections 1 and 3 of Part A of this Scheme Booklet for further information regarding the Independent Seven Directors’ unanimous recommendation.

Detailed information on how to vote is set out in section 13 of Part A of this Scheme Booklet.

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Section 9 39


How will Seven Directors be voting?

Each Seven Director who owns TELYS3 intends to vote, or procure the vote of, all Seven Director TELYS3 in favour of the TELYS3 Scheme, in the absence of a superior proposal.

Will I be bound by the TELYS3 Scheme if I do not vote or if I vote against the TELYS3 Scheme?

Yes, if the TELYS3 Scheme is approved and the TELYS3 Scheme becomes Effective, then all TELYS3 held by you at the TELYS3 Scheme Record Date will be transferred to WesTrac Holdings and you will receive the TELYS3 Scheme Consideration even if you did not vote, or voted against the TELYS3 Scheme.

What is the approval threshold for the TELYS3 Scheme?

The TELYS3 Scheme Resolution must be approved by:

a majority in number of TELYS3 Holders who vote • on the TELYS3 Scheme Resolution; and

at least 75% of the total number of votes cast by • TELYS3 Holders on the TELYS3 Scheme Resolution,

at the TELYS3 Scheme Meeting.

The Court has a discretion to waive the first of these two requirements if it considers it appropriate to do so.

For the TELYS3 Scheme to become Effective and be implemented, it must also be approved by the Court.

Are there any conditions to the TELYS3 Scheme?

There are a number of conditions which must be satisfied or waived before the TELYS3 Scheme is implemented. Some of these conditions are conditions precedent that must be satisfied before the TELYS3 Scheme can become Effective, while others are conditions subsequent that must be satisfied after the TELYS3 Scheme becomes Effective but before it is implemented.

As at the date of this Scheme Booklet, neither Seven nor SGH is aware of any circumstances which would cause the outstanding conditions not to be satisfied.

Further details of the conditions to the TELYS3 Scheme are set out in section 4.3 of Part B of this Scheme Booklet.

Is the TELYS3 Scheme conditional on the Share Scheme being approved and implemented?

Yes. Even if the TELYS3 Scheme is approved by TELYS3 Holders it will not be implemented unless the Share Scheme is also implemented.

When will the result of the TELYS3 Scheme Meeting be known?

The result of the TELYS3 Scheme Meeting will be available shortly after the conclusion of that meeting on 20 April 2010.

The result of the TELYS3 Scheme Meeting will be announced to the ASX once available.

Even if the TELYS3 Scheme Resolution is passed at the TELYS3 Scheme Meeting, the TELYS3 Scheme will be subject to the approval of the Court.

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What happens if the TELYS3 Scheme is not approved or otherwise does not proceed?

If either the TELYS3 Scheme is not approved by the requisite majorities of TELYS3 Holders at the TELYS3 Scheme Meeting or if the TELYS3 Scheme is not approved by the Court, then the TELYS3 Scheme will not become Effective and will not proceed. Similarly, if the Share Scheme does not proceed, the TELYS3 Scheme will not proceed (even if it is approved by both TELYS3 Holders).

If the TELYS3 Scheme does not proceed, TELYS3 Holders will not receive the TELYS3 Scheme Consideration.

If the TELYS3 Scheme does not proceed but the Share Scheme is approved and implemented, TELYS3 Holders who have accepted the TELYS4 Offer will have their TELYS3 exchanged for TELYS4 on an individual basis provided the TELYS4 Offer Conditions have been satisfied. TELYS3 Holders who have not accepted the TELYS4 Offer will not receive TELYS4 and will instead retain their TELYS3. Their TELYS3 holding will be affected by the TELYS3 Undertaking.

Further details of what will or may happen to TELYS3 Holders if the TELYS3 Scheme does not proceed are provided in section 5.5 of Part A of this Scheme Booklet.

TELYS4 Offer – Refer to the TELYS4 Prospectus for full details

Who may apply under the TELYS4 Offer?

All TELYS3 Holders are eligible to apply for TELYS4 under the TELYS4 Offer, other than Ineligible Foreign Holders.

Refer to the TELYS4 Prospectus and section 6 of Part A of this Scheme Booklet for further information.

How can I apply under the TELYS4 Offer?

You can only apply for TELYS4 under the TELYS4 Offer by (ticking the appropriate box on your TELYS3 Proxy Form). TELYS3 Holders are encouraged to submit their TELYS3 Proxy Form (and therefore their application for TELYS4) as soon as possible.

What is the closing date for the TELYS4 Offer?

The TELYS4 Offer closes on the deadline for the receipt of TELYS3 Proxy Forms, which is 10.00am on Sunday 18 April 2010. The TELYS3 Proxy Forms include the application under the TELYS4 Offer, and applications under the TELYS4 Offer will not be accepted after the Proxy deadline.


What will I receive under the TELYS4 Offer?

You will receive one TELYS4 for each TELYS3 that you hold on the TELYS3 Record Date. This is the same as the TELYS3 Scheme Consideration. Because the TELYS4 Offer is subject to the TELYS4 Offer Conditions, you will not receive both.


Is there any brokerage commission or stamp duty payable under the TELYS4 Offer?

No.

What are the TELYS4 Offer Conditions?

The TELYS4 Offer is conditional on the Share Scheme becoming Effective, but the TELYS3 Scheme not becoming Effective. The minimum acceptance level of $100 million face value of TELYS4 must also be satisfied for the TELYS4 Offer to go ahead.

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Section 9 41


When will I receive confirmation that my application under the TELYS4 Offer has been successful?

It is expected that TELYS4 Holding Statements will be despatched on or around 13 May 2010.

Can I trade my TELYS3 even though I have accepted the TELYS4 Offer?

No. TELYS3 Holders who accept the TELYS4 Offer will be restricted from trading their TELYS3 from the time that the TELYS3 Proxy Form is received by the Seven Registry until it is confirmed that the TELYS4 Offer will not go ahead.

Other Questions

What happens if an alternative proposal emerges?

If an alternative proposal emerges, this will be announced to the ASX and the Independent Seven Directors (who comprise the IBC) will carefully consider the proposal and advise you of their recommendation.

What are the tax implications of the TELYS3 Scheme?

The Tax Letters contain a discussion of the main Australian taxation implications of the TELYS3 Scheme.

Your decision on whether or not to vote in favour of the TELYS3 Scheme should be made only after your consultation with a financial, legal or other professional adviser based on your own investment objectives, financial situation, taxation position and particular needs.

The Tax Letters are contained in section 8 of Part B of this Scheme Booklet.

Can I sell my TELYS3 now? You can sell your TELYS3 on market at any time before the close of trading on the ASX on the Effective Date at the prevailing market price, unless you have accepted the TELYS4 offer.

The Effective Date is currently expected to be Tuesday 29 April 2010.

Further Information

How can I get further information if I have any questions?

For further information, you can call the Seven Network Limited Information Line on 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm (Sydney time), Monday to Friday. Alternatively, you can go to SGH’s website at www.sevengroup.com.au.

If you are in doubt about anything in this Scheme Booklet or the TELYS4 Prospectus, please contact your financial, legal or other professional adviser.

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10TELYS4: QUESTIONS AND ANSWERS

section 10 43

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This section answers some frequently asked questions about TELYS4. It is not intended to address all relevant issues for TELYS3 Holders and should be read together with the remainder of this Scheme Booklet, including the Terms of Issue, and the TELYS4 Prospectus.


TELYS4

What are TELYS4? TELYS4 have broadly similar terms to TELYS3.

TELYS4 are redeemable, convertible preference shares that entitle Holders to non-cumulative dividends. TELYS4 are issued by SGH.

The dividends in respect of TELYS4 are expected to be fully franked and payable half-yearly, subject to the SGH Directors resolving to pay the dividend. TELYS4 rank in priority to SGH Shares for payment of dividends and for a return of capital on a winding up of SGH.

TELYS4 are perpetual but may be Converted or Exchanged in certain circumstances at the sole discretion of SGH, including on each Dividend Payment Date.

In limited circumstances, TELYS4 Holders can demand Exchange or Conversion (at SGH‘s election) of their TELYS4, but otherwise TELYS4 Holders do not have the right to require SGH to Convert TELYS4 into SGH Shares or have them Exchanged for cash.

See clauses 3.3 and 3.4 of the Terms of Issue in Appendix A of Part A of this Scheme Booklet.

Dividends

Will Dividends always be paid? Dividends on TELYS4 may not always be paid and are non-cumulative. Dividends are paid at the discretion of the SGH Directors and subject to funds being legally available. Therefore, if a dividend is not paid in full for any particular Dividend Period, a TELYS4 Holder will not receive that dividend unless SGH elects, at its discretion, to make up for that payment.

See clause 2.4 of the Terms of Issue in Appendix Aof Part A of this Scheme Booklet.

When will Dividends be paid? Subject to the conditions in respect of the payment of dividends, TELYS4 Holders will be entitled to dividends that are due to be paid half-yearly in arrears on 31 May and 30 November each year, or if that day is not a Business Day, then the next Business Day.

The last Dividend Payment Date is the date on which TELYS4 are Converted or Exchanged.

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Section 10 45


Will the first TELYS4 dividend compensate for any TELYS3 dividend foregone?

Yes.

Under the TELYS3 Scheme, the TELYS4 will be allotted on the Implementation Date.

If:

allotment of TELYS4 occurs on or before 14 May 2010 • (being the record date for the 31 May 2010 TELYS3 dividend), the first TELYS4 dividend will be paid in respect of the period commencing 30 November 2009 and ending 30 May 2010; or

allotment of TELYS4 occurs after 14 May 2010, • the first TELYS4 Dividend will be calculated from 31 May 2010,

to compensate for any part of a TELYS3 dividend that will be foregone.

See clause 2.2 of the Terms of Issue in Appendix A of Part A of this Scheme Booklet.

How will the dividend rate be calculated?

The Dividend Rate will be a floating rate and will be set on the first Business Day of each Dividend Period and will be calculated as:

Dividend Rate = (Market Rate + Margin) x (1-T)

where:

Market Rate means the Bank Bill Swap Rate for 180 day bills applying on the first Business Day of the Dividend Period expressed as a percentage per annum;

Margin means 4.75% per annum; and

T means the Australian corporate tax rate applicable to the franking account of SGH as at the relevant Dividend Payment Date, expressed as a decimal.

If allotment of TELYS4 occurs on or before 14 May 2010, the Dividend Rate for the first TELYS4 dividend only will be 4.8440%.

See clause 2.1 of the Terms of Issue in Appendix A of Part A of this Scheme Booklet.

As an example, if the Market Rate is 4.50% per annum and the Margin is 4.75% per annum, the Dividend Rate for the first Dividend Period would be calculated as follows:

(4.50% + 4.75%) x (1 – 0.3) = 6.4750%

The actual Dividend Rate for each Dividend Period (including the first Dividend Period) may be lower or higher than in this example.

Will the Margin change over time?

No, the Margin in respect of TELYS4 will not change after 31 May 2010.

This is because after 31 May 2010, the TELYS4 Margin will be 4.75% per annum. This is the same gross margin as the corresponding gross margin in respect of TELYS3 after the ‘step-up’ that would otherwise occur on 31 May 2010.

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How will the dividend be calculated?

The dividend payable on each TELYS4 for each Dividend Period will be calculated based on the following formula:

Dividend Rate x $100 x N

365

where:

N is the number of days in the relevant Dividend Period, except that in respect of the first TELYS4 dividend only, if:

allotment of TELYS4 occurs on or before 14 May • 2010, N for that dividend will be deemed to be 182 days; or

allotment of TELYS4 occurs after 14 May 2010, N for • that dividend will be calculated from 31 May 2010.

All calculations of dividends will be rounded to the nearest four decimal places. For the purposes of making any dividend payment in respect of a TELYS4 Holder’s aggregate TELYS4, any fraction of a cent will be disregarded.

Continuing from the example above, assuming the Dividend Rate for TELYS4 for the period in question is 6.4750% per annum and the number of days in the Dividend Period is 182 days, the dividend for that Dividend Period for one TELYS4 would be:

(6.4750% x $100 x 182) / 365 = $3.22

What happens if a dividend is not paid?

If for any reason a dividend has not been paid in full within 20 Business Days after its Dividend Payment Date, the Dividend and Capital Stopper will come into effect.

If the Dividend and Capital Stopper comes into effect, SGH must not without approval of a special resolution passed at a separate meeting of TELYS4 Holders resolve to pay, or pay, a cash dividend or make any distribution on any share capital over which TELYS4 rank in priority for participation in profits, or redeem, reduce, cancel, or acquire for any consideration any share capital of SGH (other than TELYS4), until such time as:

two consecutive dividends on TELYS4 under clause • 2.1 of the Terms of Issue thereafter have been paid in full;

an optional dividend has been paid to the TELYS4 • Holders equal to the unpaid amount (if any) of the two immediately preceding dividends to which they were entitled under clause 2.1 of the Terms of Issue but which were unpaid (including due to provisions of clause 2.4 of the Terms of Issue) prior to the date of payment of the optional dividend; or

all TELYS4 have been Converted or Exchanged.•

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Section 10 47


What happens if a dividend is not fully franked?

SGH expects the dividends paid on TELYS4 to be fully franked. If a dividend is not fully franked, the dividend will be grossed up to compensate for the unfranked component. If the SGH Directors resolve to pay a dividend which is not fully franked and not grossed up, the Dividend and Capital Stopper will come into effect and SGH will be restricted in making dividend payments and distributions and restricted in returning capital of SGH ranking equally with or below TELYS4.

See clause 2.3 of the Terms of Issue which are attached to Annexure 3 of Part A of this Scheme Booklet.

What happens to dividends if the Australian corporate tax rate changes?

If, on a Dividend Payment Date, the Australian corporate tax rate differs from the Australian corporate tax rate on the date of allotment of TELYS4, the dividend will be adjusted downwards or upwards accordingly.

See clause 2.1 of the Terms of Issue which are attached to Annexure 3 of Part A of this Scheme Booklet.

Conversion and Exchange

What is Conversion or Exchange?

On any Dividend Payment Day or in other limited circumstances, at its sole discretion, SGH may:

under Conversion: Convert TELYS4 into SGH Shares;•

under Exchange: redeem, buy-back or cancel • TELYS4 at the sum of Face Value (together with certain unpaid dividend amounts, if any); or

undertake a combination of the two. •

When can SGH Convert or Exchange TELYS4?

TELYS4 are perpetual securities and have no maturity. SGH may at its election Convert some or all of the TELYS4 for SGH Shares or Exchange some or all of the TELYS4 for $100 in cash for each TELYS4 on each Dividend Payment Date.

SGH also has the right to:

Convert or Exchange the TELYS4 in certain • circumstances including where the SGH Directors resolve that there has been a change or proposed change in a law, interpretation, governmental ruling (including one relating to taxation) or accounting standard (or interpretation of an accounting standard) which will:

materially increase SGH’s costs in keeping –TELYS4 on issue;

affect the franking and availability of franking –credits in respect of TELYS4;

affect whether TELYS4 are classified entirely –as equity for accounting purposes; or

impose additional, unacceptable requirements –on SGH; or

Convert or Exchange TELYS4 if a takeover bid or • scheme of arrangement is made in respect of SGH.

SGH cannot elect to Convert or Exchange only some TELYS4 if such Conversion or Exchange would result in there being less than $100 million in aggregate Face Value of TELYS4 on issue.

See clauses 3.3 to 3.5 of the Terms of Issue which are attached to Annexure 3 of Part A of this Scheme Booklet.

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Can a TELYS4 Holder require Conversion or Exchange?

TELYS4 Holders cannot require Conversion or Exchange unless:

the Dividend and Capital Stopper (see above) • has come into effect; and

SGH acts in breach of the Dividend and • Capital Stopper.

In this case, a TELYS4 Holder must notify SGH in writing and SGH must then elect to either Convert or Exchange that person’s TELYS4 on the next Dividend Payment Date that is at least 25 Business Days after the notice is given by the TELYS4 Holder.

See clauses 2.10 and 2.11 of the Terms of Issue which are attached to Annexure 3 of Part A of this Scheme Booklet.

What happens on Conversion? On Conversion, each TELYS4 will convert into one SGH Share and additional SGH Shares will be issued to the TELYS4 Holder that, from the Conversion Date, rank equally in all respects with the SGH Shares already on issue.

The ratio at which TELYS4 will Convert into SGH Shares will be calculated by reference to the market price of SGH Shares during the 20 Business Days immediately preceding, but not including, the Conversion Date, less a Conversion discount of 2.5%. This will be calculated using the following formula:

Conversion Ratio = A / (VWAP – (CD x VWAP))

where:

A means an amount equal to the sum of:

the Face Value ($100); and•

the unpaid amount (if any), of the two immediately • preceding dividends to which TELYS4 Holders were entitled but which were unpaid prior to the relevant Conversion Date;

CD means Conversion Discount of 2.5%; and

VWAP means the VWAP during the period of 20 Business Days immediately preceding, but not including, the relevant Conversion Date.

See clauses 3.7 and 3.9 of the Terms of Issue which are attached to Annexure 3 of Part A of this Scheme Booklet.

What will I receive if my TELYS4 are Exchanged?

If your TELYS4 are Exchanged, you will receive cash proceeds for each TELYS4 equal to the sum of:

the face value; and•

the unpaid amount (if any) of the two immediately • preceding dividends to which TELYS4 Holders were entitled but which were unpaid prior to the relevant Exchange Date.

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How will I be able to realise my investment in TELYS4?

SGH has applied on a conditional basis for TELYS4 to be quoted for trading on the ASX. Once quoted, TELYS4 can be purchased or sold on the ASX through any stockbroker at the prevailing market price. That price may be higher or lower than the Face Value, and will depend, among other things, on the level of supply and demand for TELYS4.

If quotation is not granted, the TELYS3 Scheme or TELYS4 Offer will not proceed and TELYS4 will not be issued.

What are the taxation implications for persons holding or disposing of TELYS4?

TELYS3 Holders should obtain their own taxation advice as the tax implications of holding or disposing of TELYS4 will depend on an investor’s individual circumstances. The Tax Letters in the Scheme Booklet contains a discussion of the main Australian taxation implications.

See the Tax Letters in section 8 of Part B of this Scheme Booklet.

Do TELYS4 have voting rights? TELYS4 do not generally have voting rights, except in the limited circumstances set out in clause 5 of the Terms of Issue.

Do TELYS4 have a credit rating? No. SGH has not sought to obtain a rating for TELYS4 from a credit ratings agency. Similar to TELYS3, TELYS4 will not be a rated security.

What are the risks of investing in TELYS4?

An investment in TELYS4 involves risks, some of which are detailed in section 5.4 of Part Bof this Scheme Booklet.

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11OVERVIEW OF THE WESTRAC GROUP

section 11 51

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WesTrac Holdings, which is the head company of WesTrac Group, is an investment holding company wholly-owned by ACE. WesTrac Group is headquartered in Perth and directly and indirectly employs in excess of 4,000 people nationally.

WesTrac Holdings’ current three core investments are:

WesTrac Australia – WesTrac Australia is an authorised • Caterpillar dealer in its Western Australia and New South Wales/ACT Service Territories. WesTrac Australia is one of only four authorised Caterpillar dealers in Australia and is the leading equipment management company providing an end-to-end product and serving primarily the mining and construction markets.

WesTrac China – WesTrac China is one of only four • authorised Caterpillar dealers in China. WesTrac China is an authorised Caterpillar dealer in its North Eastern China Service Territory (which comprises six provinces and the municipalities of Beijing and Tianjin) covering some of China’s fastest growing and most mineral rich territories in North Eastern China.

National Hire – WesTrac holds a 66% interest in National • Hire, a company listed on ASX with a current market capitalisation of approximately A$297 million on 10 March 2010. National Hire owns 100% of Allight, which manufactures, assembles and sells Allight mobile lighting towers, power generation and dewatering equipment. It also distributes Perkins engines, FG Wilson power generation sets, Godwin wet-ends and parts, and has 46% investment in Coates Hire. Coates Hire is the largest equipment hire business in Australia with over 200 branches and satellite locations and serves the mining, construction and event management sectors.

WesTrac Australia and WesTrac China are together one of Caterpillar’s top 5 dealers globally by sales. Caterpillar is the world’s largest construction equipment manufacturer and a leading heavy construction and mining equipment provider. Caterpillar is listed on the New York Stock Exchange, is a member of the Dow Jones Industrial Index and has a market capitalisation of approximately US$37 billion as at 10 March 2010.

The Caterpillar brand is a globally recognised brand. Caterpillar is the only manufacturer of earthmoving or construction equipment included in BusinessWeek’s Top100 Global Brands in 2009.

The diagram below provides a high level overview of WesTrac Holdings’ current business structure:

ACE

WesTrac Holdings

WesTrac Australia

WesTrac China National Hire

Coates Hire

100%

100%

100% 66%

46% (National Hire’s share)

Refer to section 2 of Part B of this Scheme Booklet

for further details about the WesTrac Group.

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12OVERVIEW OF SGH

section 12 53

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The combination of Seven and WesTrac Group will create a significant Australian diversified operating and investment group with market leading businesses and investments with strong revenues and earnings. The holding company of the combined group will be named Seven Group Holdings Limited (SGH).

SGH will comprise of a wholly-owned industrial operating business alongside key strategic investments in media and industrial equipment hire. It will be an operating company with an attractive growth outlook that retains exposure to Seven’s existing strategic investments.

SMG – owner of Australia’s number one rated prime time • free-to-air television network (Channel Seven) and a leading magazine publisher (Pacific Magazines), with an investment in a leading online media platform (Yahoo!7);

WesTrac Group – leading market positions in both sales and • units sold in both Western Australia and New South Wales/Australian Capital Territory in heavy equipment, and a rapidly growing China Caterpillar dealership in North Eastern China;

National Hire’s investment in Coates Hire – the leading • equipment hire business in Australia;

WAN – the leading newspaper in Western Australia; and•

CMH – a leading pay TV provider, with investments in • FOXTEL and FOXSports.

SGH is forecast to achieve FY2011 revenue of $2.8 billion, EBITDA of $312 million and NPAT of $187 million.

Each SGH business unit will report directly to the Chief Executive Officer and will be supported by SGH’s corporate head office. A summary structure of SGH is illustrated in section 1 above.

Refer to section 3 of Part B of this Scheme Booklet

for further details about SGH.

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13HOW TO VOTE

section 13 55

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13.1 THE TELYS3 SCHEME MEETINGThe TELYS3 Scheme is subject to the approval of TELYS3 Holders at the TELYS3 Scheme Meeting.

The TELYS3 Scheme Meeting has been convened for Tuesday, 20 April 2010 at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000, commencing at 11.30am (Sydney time).

At the TELYS3 Scheme Meeting, TELYS3 Holders will be asked to consider and, if thought fit, pass the following resolution:

That, for the purpose of Section 411 of the Corporations Act 2001 (Cth) and for all other purposes, the scheme of arrangement to be made between the Company and the holders of its redeemable, convertible preference shares known as Transferable Extendable Listed Yield Shares or TELYS3 (as contained in and more particularly described in the Scheme Booklet of which this notice of meeting forms part) is approved, with or without modification as approved by the Supreme Court of New South Wales

In order for the TELYS3 Scheme Resolution to be passed, unless the Court orders otherwise, it must be approved by a majority (that is, greater than 50%) in number of TELYS3 Holders voting on the TELYS3 Scheme Resolution (in person or by proxy, attorney or, in the case of corporate TELYS3 Holders, by a corporate representative). In addition, those TELYS3 Holders who vote in favour must cast at least 75% of the total number of votes cast by TELYS3 Holders on the TELYS3 Scheme Resolution (in person or by proxy, attorney or, in the case of corporate TELYS3 Holders, by a corporate representative).

Voting at each TELYS3 Scheme Meeting will be by poll.

13.2 ENTITLEMENT TO VOTEAll TELYS3 Holders as at 7.00pm (Sydney time) on Sunday, 18 April 2010 will be entitled to:

vote at the TELYS3 Scheme Meeting; and •

elect to receive TELYS4 in exchange for TELYS3 even • if the TELYS3 Scheme is not approved.

13.3 HOW TO VOTE You may vote in person at the relevant TELYS3 Scheme Meeting. If you are unable to attend the meeting in person, you may vote by using the yellow Proxy Form in respect of the TELYS3 Scheme Meeting accompanying this Scheme Booklet.

A corporate shareholder or corporate proxy may vote or make its election by corporate representative appointed pursuant to Section 250D of the Corporations Act.

Further details are set out below:

A) VOTING IN PERSONTo vote in person at a TELYS3 Scheme Meeting, you must attend the TELYS3 Scheme Meeting commencing at 11.30am (Sydney time) on Tuesday, 20 April 2010 at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000.

All persons attending the TELYS3 Scheme Meeting must register their attendance by disclosing their name at the point of entry to the meeting.

B) VOTING BY PROXYIf you cannot attend the TELYS3 Scheme Meeting, you may vote by proxy by completing and sending in the yellow Proxy Form in respect of the TELYS3 Scheme Meeting accompanying this Scheme Booklet.

If you vote by proxy, you can also elect to exchange your TELYS3 for TELYS4 even if the TELYS3 Scheme does not proceed by marking the election box on the yellow Proxy Form. See section 13 of Part A of the scheme booklet for more information.

A proxy need not be a TELYS3 Holder (or a Seven Shareholder). If you are entitled to vote at both the TELYS3 Scheme Meeting and a Share Scheme Meeting, you may appoint the same or different proxies for each of those meetings.

If you are entitled to vote at both the TELYS3 Scheme Meeting and a Share Scheme Meeting, and you wish to appoint a proxy for each of those meetings, you must complete the yellow Proxy Form in respect of the TELYS3 Scheme Meeting and the white or pink Proxy Form in respect of the Share Scheme Meetings.

If you are entitled to cast two or more votes at the TELYS3 Scheme Meeting, you may appoint two proxies. You may specify the proportion or number of votes which each proxy is appointed to exercise. If proportions or numbers are not specified, each proxy may exercise half of the votes you are entitled to cast. Fractions of votes will be disregarded. Appointing a proxy will not preclude you from attending the meeting in person and voting at the meeting instead of your proxy.

To be effective, validly completed Proxy Forms in respect of the TELYS3 Scheme Meeting (accompanied by any power of attorney or other authority under which that Proxy Form is signed or a certified copy of that power of attorney or authority, in each case unless previously provided to the Seven Registry) must be:

posted to the Seven Registry in the reply paid envelope • provided or, if you are outside of Australia or do not otherwise use the reply paid envelope, to Registries Limited, GPO Box 3993, Sydney NSW 2001 Australia;

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Section 13 57

successfully transmitted by facsimile to the Seven • Registry on +61 2 9290 9655 (from within Australia) or +61 2 9290 9655 (from outside Australia); or

posted, delivered or successfully transmitted by facsimile • to the registered office of Seven,

so that it is received by no later than 11.30am (Sydney time) on 18 April 2010 (or if the meeting is adjourned, at least 48 hours before the resumption of the meeting in relation to the resumed part of the meeting).

Your proxy should retain a copy of the Proxy Form (together with any power of attorney or other authority under which that form is signed or a certified copy of that power of attorney or authority) to assist with admission to the TELYS3 Scheme Meeting.

You can obtain additional Proxy Forms from the Seven Registry (see the inside back cover of either part of this Scheme Booklet for the Seven Registry’s contact details) or by calling the Seven Network Limited Information Line on 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia).

If you complete and return the Proxy Form for the TELYS3 Scheme Meeting, you may still attend that meeting, revoke the proxy and vote in person.

C) VOTING BY ATTORNEYAlternatively, if you cannot attend the TELYS3 Scheme Meeting, you may vote by a duly authorised attorney. An attorney need not be a TELYS3 Holder (or a Seven Shareholder). If you are entitled to vote at both the TELYS3 Scheme Meeting and a Share Scheme Meeting, you may appoint the same or different attorneys for each of those meetings.

The power of attorney, or a certified copy of the power of attorney, should be lodged with the Seven Registry before the TELYS3 Scheme Meeting or brought to the meeting.

D) CORPORATE REPRESENTATIVEIf a representative of a corporate shareholder or corporate proxy is to attend the TELYS3 Scheme Meeting pursuant to Section 250D of the Corporations Act, a certificate of appointment of the representative (or such other document as the Chairman of the TELYS3 Scheme Meeting considers sufficient together with any power of attorney or other authority under which the certificate or other document is signed or a certified copy of that power of attorney or authority) should be lodged with the Seven Registry prior to the TELYS3 Scheme Meeting or brought to the meeting.

A form of certificate can be obtained from the Seven Registry.

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14HOW TO ACCEPT THE TELYS4 OFFER

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The TELYS4 Offer is made in the TELYS4 Prospectus, which you should read in full together with this Scheme Booklet before deciding whether or not to accept the TELYS4 Offer.

To accept the TELYS4 Offer, tick the box on the yellow proxy form marked “I wish to accept the TELYS4 Offer” and return it to the Seven Registry. To be an effective acceptance of the TELYS4 Offer, your proxy form with that election must be:

posted to the Seven Registry in the reply paid envelope • provided or, if you are outside of Australia or do not otherwise use the reply paid envelope, to Registries Limited, GPO Box 3993, Sydney NSW 2001 Australia;

successfully transmitted by facsimile to the Seven • Registry on +61 2 9290 9655 (from within Australia) or +61 2 9290 9655 (from outside Australia);

so that it is received by no later than 7.00pm (Sydney time) on Sunday, 18 April 2010 (or if the meeting is adjourned, at least 48 hours before the resumption of the meeting in relation to the resumed part of the meeting).

Please note it will be too late to decide whether to accept the TELYS4 Offer after the outcome of the TELYS3 Scheme vote is known. If you wish to accept the TELYS4 Offer you must do so as described above by the deadline for receipt of proxies under the TELYS3 Scheme.

SGH may accept late acceptances in its discretion but is not bound to do so.

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15GLOSSARY

section 15 61

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Term Meaning

ACE Australian Capital Equity Pty Limited (ACN 009 412 328).

AIFRS the International Financial Reporting Standards as adopted in Australia.

Allotment Date the day on which TELYS4 are allotted to TELYS3 Holders under the TELYS3 Scheme, or the TELYS4 offer.

ASIC the Australian Securities and Investments Commission.

associate has the meaning given to it in section 12 of the Corporations Act.

ASX ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange financial market that it operates, as the context requires.

ATO Australian Taxation Office.

Bank Bill Swap Rate in respect of the TELYS4, for each Dividend Period, the rate, expressed as a percentage per (a) annum, calculated as the average mid-rate for bills of a term of 180 days which average rate is displayed on Reuters page designated BBSW (or any page which replaces that page) on the first business day of the relevant Dividend Period, or if there is a manifest error in the calculation of that average rate or that average rate is not displayed by 10.30am (Sydney time) on that date, the rate specified in good faith by SGH at or around that time on that date having regard, to the extent possible, to:

the rate otherwise bid and offered for bills of that term or for funds of that tenor displayed –on that page designated BBSW (or any page which replaces that page) at that time on that date; and

if bid and offer rates for bills of that term are not otherwise available, the rates otherwise –bid and offered for funds of that tenor at or around that time, or

in respect of the TELYS3, for each dividend period, the rate, expressed as a percentage per (b) annum, calculated as the average mid-rate for bills of a term of 180 days which average rate is displayed on Reuters page designated BBSW (or any page which replaces that page) on the first business day of the relevant Dividend Period, or if there is a manifest error in the calculation of that average rate or that average rate is not displayed by 10.30am (Sydney time) on that date, the rate specified in good faith by the Seven at or around that time on that date having regard, to the extent possible, to:

the rate otherwise bid and offered for bills of that term or for funds of that tenor displayed –on that page designated BBSW (or any page which replaces that page) at that time on that date; and

if bid and offer rates for bills of that term are not otherwise available, the rates otherwise –bid and offered for funds of that tenor at or around that time.

Broadcasting Services Act the Broadcasting Services Act 1992 (Cth).

Business Day a weekday on which trading banks are open for business in Sydney, Australia.

Caterpillar Caterpillar, Inc.

CGT capital gains tax.

CMH Consolidated Media Holdings Limited (ACN 009 071 167).

Coates Group Coates Group Holdings Pty Limited (ACN 126 069 341).

Coates Hire the equipment rental business conducted by Coates Group.

Company Interests has the meaning given to that term under the Broadcasting Services Act.

Conversion has the meaning given to that term in the Terms of Issue and Convert and Converted have corresponding meanings.

Conversion Date the date on which TELYS4 are converted into SGH Shares.

Corporations Act the Corporations Act 2001 (Cth).

Court the Federal Court of Australia.

Deloitte Deloitte Corporate Finance Pty Limited (ABN 19 003 833 127).

Dividend a dividend payable to TELYS4 Holders.

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Term Meaning

Dividend and Capital

Stopper

a term of the TELYS4 which prohibits SGH from paying dividends or returning capital on any securities ranking behind TELYS4 without the approval of TELYS4 Holders if a TELYS4 dividend is not paid in full within 20 Business Days after its Dividend Payment Date.

Dividend Payment Date each date on which a Dividend is payable under the Terms of Issue whether or not a dividend is paid on that date.

Dividend Period a period from (and including) a Dividend Payment Date until (but not including) the following Dividend Payment Date.

Dividend Rate has the meaning given in section 7 of this Part A of the Scheme Booklet.

EBITDA earnings before interest, tax, depreciation and amortisation.

Effective when used in relation to the Share Scheme, the coming into effect, under Section 411(10) • of the Corporations Act, of the order of the Court made under Section 411(4)(b) in relation to the Share Scheme; and

when used in relation to the TELYS3 Scheme, the coming into effect, under Section 411(10) • of the Corporations Act, of the order of the Court made under Section 411(4)(b) in relation to the TELYS3 Scheme.

Effective Date the date on which the TELYS3 Scheme or the Share Scheme becomes Effective, as appropriate.

Ernst & Young Ernst & Young Australia (ABN 75 288 172 749).

Exchange the right of SGH or Seven, at its option, to redeem, buy back or otherwise cancel the TELYS4 or TELYS3, as applicable in exchange for a cash payment in accordance with clause 3 of the Terms of Issue or TELYS3 Terms of Issue, respectively.

FY financial year.

IBC the Independent Board Committee, being a committee of the Board of Directors of Seven comprising only the Independent Seven Directors.

Implementation Date the fifth Business Day after the TELYS3 Scheme Record Date or such other day as the parties agree.

Implementation Deed the Scheme Implementation Deed between Seven, SGH and ACE dated 21 February 2010 (as amended) which is summarised in section 4.3 of Part B this Scheme Booklet.

Independent Expert Deloitte.

Independent Expert’s

Report

the report prepared by the Independent Expert in connection with the Share Scheme and the TELYS3 Scheme, which is set out in section 6 of Part B of this Scheme Booklet.

Independent Seven

Directors

each of Mr Peter Ritchie AO, Ms Elizabeth Dulcie Boling and Professor Murray Wells.

Ineligible Foreign Holder a TELYS3 Holder whose address on the TELYS3 Register is outside Australia and its external territories, New Zealand or Hong Kong unless ACE determines that it is lawful and not unduly onerous or impractical to issue TELYS4 to that person.

Investigating Accountant KPMG Transaction Services (Australia) Pty Limited (ACN 003 891 718).

Investigating Accountant’s

Report

the report, prepared by the Investigating Accountant, set out in section 7 of Part B of the Scheme Booklet.

Market Rate means the Bank Bill Swap Rate for 180 day bills applying on the first Business Day of the Dividend Period expressed as a percentage per annum.

National Hire National Hire Group Limited (ACN 076 688 938).

New South Wales/ACT

Service Territory

that portion of the State of New South Wales east of 144° longitude, and the Australian Capital Territory.

Nominee the person appointed by SGH to sell the TELYS4 that are attributable to Ineligible Foreign Holders under the terms of the TELYS3 Scheme.

North Eastern China

Service Territory

in the People’s Republic of China, the provinces of Jilin, Hebei, Liaoning, Inner Mongolia, Heilongjiang and Shanxi and the municipalities of Beijing and Tianjin.

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Term Meaning

Notices of Meeting of the

TELYS3 Scheme

the notice of meeting for the TELYS3 Scheme Meetings, as set out in Annexure 1 to Part A of this Scheme Booklet.

OECD Organisation for Economic Co-operation and Development.

Proxy Form the:

white or pink proxy forms for the Share Scheme Meetings sent to Seven Shareholders; or•

yellow proxy form for the TELYS3 Scheme Meeting sent to TELYS3 Holders, •

as appropriate.

Rate on Exchange the Dividend Rate calculated in accordance with clause 2.1 of the TELYS3 Terms of Issue except that for purposes of this calculation, where the actual Market Rate in effect on a particular Dividend Payment Date is not known as of that Dividend Payment Date, the Market Rate will be the long term swap rate.

Recommended Proposal the proposed creation of SGH, through:

SGH acquiring the WesTrac Group in exchange for SGH Shares;•

SGH Group acquiring all Seven Shares pursuant to the Share Scheme in exchange for • SGH Shares; and

the listing of SGH, •

together with SGH Group acquiring the TELYS3 pursuant to the TELYS3 Scheme or the offer of TELYS4 on an individual basis if the TELYS3 Scheme is not implemented.

Related body corporate has the meaning given to it in the Corporations Act.

Scheme each of the Share Scheme and the TELYS3 Scheme, as appropriate.

Scheme Booklet this document dated 16 March 2010, including both Part A and Part B, the Annexures to it and the Proxy Form.

Second Court Hearing the hearing before the Court to approve the Share Scheme following the Share Scheme Meetings and (if the TELYS3 Scheme is approved by TELYS3 Holders) to approve the TELYS3 Scheme following the TELYS3 Scheme Meeting.

Seven Seven Network Limited (ACN 052 816 789).

Seven Constitution the constitution of Seven, from time to time.

Seven Director a director of Seven.

Seven Director TELYS3 any TELYS3:

held by, or on behalf of, a Seven Director; or•

listed as an indirect interest in an Appendix 3X or 3Y lodged with ASX for Seven in respect • of any Seven Director.

Seven Network Limited

Information Line

1300 656 831 (at the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm, Monday to Friday (Sydney time).

Seven Registry Registries Limited (ACN 003 209 836).

Seven Shareholders each person who is registered as the holder of Seven Shares.

Seven Shares fully paid ordinary shares of Seven.

SGH Seven Group Holdings Limited (ACN 142 003 469).

SGH Board the board of directors of SGH.

SGH Constitution the constitution of SGH as amended from time to time.

SGH Director a director of SGH.

SGH Group SGH and its subsidiaries.

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Term Meaning

SGH Information information regarding:

the Notional SGH Group; and1.

the merged SGH Group following implementation of the Share Scheme,2.

prepared by ACE or a member of the Notional SGH Group for inclusion in this Scheme Booklet (which, for the avoidance of doubt, does not include the Independent Expert’s Report, the Investigating Accountant’s Report or the Tax Letters).

SGH Shares fully paid ordinary shares in the capital of SGH.

Share Register the register of members of Seven maintained in accordance with the Corporations Act.

Share Scheme the scheme of arrangement under Part 5.1 of the Corporations Act between Seven and the persons who are Seven Shareholders on the Share Scheme Record Date, in respect of the Seven Shares, a copy of which is set out in section 11 of Part B of this Scheme Booklet.

Share Scheme Meetings the meetings of Seven Shareholders ordered by the Court to be convened under Section 411(1) of the Corporations Act for the purpose of considering and, if thought fit, approving the Share Scheme.

SMG Seven Media Group Pty Limited (ACN 116 850 607).

Special Exchange Amount the future value (as of the Special Exchange End Date) of the aggregate amount of dividends payable to all TELYS3 Holders from the effective time of the TELYS3 Undertaking to the Special Exchange End Date, compounded semi-annually on each scheduled Dividend Payment Date (whether a dividend is paid on that date or not) at the Rate on Exchange).

Special Exchange End Date means the last Dividend Payment Date immediately prior to the date 80 years after from the effective time of the TELYS3 Undertaking or such earlier Dividend Payment Date as Seven commences winding up or exercises its discretion to Exchange TELYS3 under clause 3.3, 3.4 or 3.5 of the TELYS3 Terms of Issue.

subsidiary has the meaning given to it in the Corporations Act.

Tax Letters the letters from Ernst & Young set out in section 8 of Part B of this Scheme Booklet in respect of the Share Scheme and the TELYS3 Scheme respectively.

TELYS3 Transferrable Extendable Listed Yield Shares, being non-cumulative redeemable and convertible preference shares issued by Seven.

TELYS3 Holders each person who is registered as the holder of TELYS3.

TELYS3 Register the register of holders of TELYS3 maintained in accordance with the Corporations Act.

TELYS3 Scheme the scheme of arrangement under Part 5.1 of the Corporations Act between Seven and the persons who are TELYS3 Holders on the TELYS3 Scheme Record Date, in respect of the TELYS3, a copy of which is set out in Part 12 of Part B of this Scheme Booklet.

TELYS3 Scheme

Consideration

the consideration comprising one SGH TELYS4 to be provided by SGH to each person who is a TELYS3 Holder on the TELYS3 Scheme Record Date, for the transfer of each TELYS3 to WesTrac Holdings under the TELYS3 Scheme.

TELYS3 Scheme Meeting the meeting of TELYS3 Holders ordered by the Court to be convened under Section 411(1) of the Corporations Act for the purpose of considering and, if thought fit, approving the TELYS3 Scheme.

TELYS3 Scheme Record

Date

5.00pm on the fifth Business Day after the Effective Date for the TELYS3 Scheme.

TELYS3 Scheme Resolution the resolution set out in the notices of meeting for the TELYS3 Scheme Meeting in Annexure 1 to Part A of this Scheme Booklet.

TELYS3 Terms of Issue the terms of issue of the TELYS3, as set out in Appendix A to the Seven constitution

TELYS3 Undertaking a deed poll for the benefit of TELYS3 Holders from time to time to be entered into by Seven if the Share Scheme is approved and the TELYS3 Scheme is not approved in the form set out in Annexure 2 subject to any amendments which do not materially adverse affect the rights of TELYS3 Holders.

TELYS4 Transferrable Extendable Listed Yield Shares, being non-cumulative redeemable and convertible preference shares issued by SGH.

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Term Meaning

TELYS4 Dividend

Stopper Event

any time a Dividend and Capital Stopper is subsisting under the Terms of Issue.

TELYS4 Holder each person who is registered as the holder of TELYS4.

TELYS4 Offer means the offer by WesTrac Holdings to acquire all or some TELYS3 on issue on the TELYS3 Record Date for TELYS4 to be issued by SGH on a one for one basis, subject to the satisfaction of the TELYS4 Offer Conditions, and as described in this Scheme Booklet and the TELYS4 Prospectus.

TELYS4 Offer Conditions in respect of the TELYS4 Offer means:

the Share Scheme becoming Effective and the TELYS3 Scheme not becoming Effective; and1.

minimum acceptances being received from all TELYS3 Holders pursuant to the TELYS4 Offer 2. for at least $100 million face value of TELYS4.

TELYS4 Prospectus the prospectus pursuant to which WesTrac Holdings proposes to make the TELYS4 Offer accompanying this Scheme Booklet.

Terms of Issue the terms of issue of the TELYS4, as set out in Annexure 3 to Part A of this Scheme Booklet.

UK the United Kingdom.

US the United States of America.

WAN West Australian Newspapers Holdings Limited (ACN 053 480 845).

Western Australia

Service Territory

the State of Western Australia.

WesTrac Australia the equipment business conducted by WesTrac Group comprising WesTrac WA and WesTrac NSW/ACT.

WesTrac China the equipment business conducted by the WesTrac Group in China.

WesTrac Group WesTrac Holdings and its subsidiaries.

WesTrac Holdings WesTrac Holdings Pty Limited ABN 68 009 336 109.

WesTrac NSW/ACT the equipment business conducted by WesTrac Group in New South Wales and the Australian Capital Territory.

WesTrac WA the equipment business conducted by WesTrac Group in Western Australia.

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ANNEXURE 1NOTICES OF TELYS3 SCHEME MEETING

Annexure 1 67

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TELYS3 SCHEME MEETING: NOTICE OF MEETINGSEVEN NETWORK LIMITED (THE COMPANY)ACN 052 816 789

NOTICE OF COURT ORDERED SCHEME MEETING FOR

HOLDERS OF REDEEMABLE, CONVERTIBLE PREFERENCE

SHARES KNOWN AS TRANSFERABLE EXTENDABLE LISTED

YIELD SHARES OR TELYS3

Notice is hereby given that by an order of the Supreme Court of New South Wales (Court) made on 16 March 2010, pursuant to Section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), a meeting of holders of redeemable, convertible preference shares known as Transferable Extendable Listed Yield Shares or TELYS3 (TELYS3) issued by the Company will be held at 11.30am (Sydney time) on 20 April 2010 at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney, NSW 2000.

AGENDABUSINESSThe purpose of the TELYS3 Scheme Meeting is to consider and, if thought fit, to agree to a scheme of arrangement (with or without modification) to be made between the Company and the holders of TELYS3 (TELYS3 Scheme).

A copy of the TELYS3 Scheme and a copy of the Explanatory Statement required by Section 412 of the Corporations Act in relation to the TELYS3 Scheme accompany and form part of the Scheme Booklet, which this notice of meeting also forms a part.

The Court has directed that Mr Peter Ritchie AM is to act as Chairman of the TELYS3 Scheme Meeting or failing him, Professor Murray Wells, and has directed the Chairman to report the result of the meeting to the Court.

Unless otherwise provided, words and expressions defined in the TELYS3 Scheme have the same meanings when used in this notice of meeting.

SPECIAL BUSINESSResolution 1 – Approval of scheme of arrangement

To consider and, if thought fit, to pass, with or without amendment, the following resolution:

“That, for the purpose of Section 411 of the Corporations Act 2001 (Cth) and for all other purposes, the scheme of arrangement to be made between the Company and the holders of its redeemable, convertible preference shares known as Transferable Extendable Listed Yield Shares or TELYS3 (as contained in and more particularly described in the Scheme Booklet of which this notice of meeting forms part) is approved, with or without modification as approved by the Supreme Court of New South Wales”

IMPORTANT NOTESShareholder approval: For the proposed TELYS3 Scheme to be binding in accordance with Section 411 of the Corporations Act, the resolution must be approved by:

a majority in number of the holders of TELY3 present and 1. voting (either in person or by proxy or by attorney or representative); and

at least 75% of the total number of votes cast on the 2. resolution,

at this meeting.

Court approval: The proposed TELYS3 Scheme (with or without modification) is subject to subsequent approval by the Court. If:

the resolution put to this meeting is approved by the • requisite majority; and

the other conditions precedent (other than the condition • precedent relating to Court approval of the TELYS3 Scheme) are satisfied or waived,

the Company intends to apply to Court for orders to give effect to the TELYS3 Scheme. In order for the TELYS3 Scheme to be effective, it must be approved by the Court and an office copy of the order must be lodged with the Australian Securities and Investments Commission.

Advertisement: Where this notice of meeting is advertised unaccompanied by the Scheme Booklet, a copy of the Scheme Booklet may be obtained by anyone entitled to attend the meeting by contacting the Company Secretary.

DATED THIS 16 MARCH 2010

BY ORDER OF THE BOARD

Warren W Coatsworth

Company Secretary

NOTES:A person entitled to attend and vote is entitled to appoint 1. a proxy and, if entitled to cast two or more votes, may appoint not more than two proxies. Where more than one proxy is appointed, the appointor may specify the proportion or number of the appointor’s votes that each proxy is appointed to exercise. If the appointor appoints two proxies and the appointment does not specify this proportion or number, each proxy may exercise half of the appointor’s votes. A proxy need not be a shareholder in the Company.

Pursuant to the orders of the Court dated 16 March2. 2010, the date and time for determining the identity of those holders of TELYS3 entitled to attend and vote at the meeting is 7.00pm on Sunday 18 April 2010.

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To be effective, validly completed proxy forms (accompanied 3. by any power of attorney or other authority under which that form is signed or a certified copy of that power of attorney or authority, in each case unless previously provided to the Company’s share registry) must be:

posted to the Company’s share registry in the reply paid –envelope provided or, if you are outside of Australia or do not otherwise use the reply paid envelope, to Registries Limited, Level 7, 207 Kent Street, Sydney NSW 2000, Australia;

successfully transmitted by facsimile to the Seven –Registry on +61 2 9290 9655 (from within Australia) or +61 2 9290 9655 (from outside Australia); or

posted, delivered or successfully transmitted by –facsimile to the registered office of the Company,

so that it is received by no later than 11.30am (Sydney time) on Sunday 18 April 2010 (or if the meeting is adjourned, at least 48 hours before the resumption of the meeting in relation to the resumed part of the meeting).

Further details about how to vote at the TELYS3 Scheme Meeting are set out in section 13 of Part A of the Scheme Booklet and, in the case of holders of TELYS3 voting by proxy, on the proxy form.

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ANNEXURE 2TELYS3UNDERTAKING

Annexure 2 71

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DEED POLLDate 11 March 2010

This deed poll is made by

Promisors Seven Network Limited

ABN 21 052 816 789 of Level 9, 1 Pacific Highway, North Sydney (SNL)

in favour of

Promisees Each person recorded on the Register as a holder of non-cumulative redeemable and convertible preference shares in SNL (TELYS3) from time to time (TELYS3 holders)

Background Ordinary shareholders of SNL have approved a scheme of arrangement pursuant to which 1. WesTrac Holdings Limited (WesTrac), which will be a wholly owned subsidiary of Seven Group, will hold all the shares in SNL (Transaction).

SNL is the issuer of the TELYS3. Following the Transaction, some or all of the TELYS3 will remain 2. held by persons other than WesTrac.

This deed poll sets out the undertakings that SNL has made in connection with the remaining 3. TELYS3 shares following the implementation of the Transaction.

This deed poll witnesses

1 DEFINITIONS AND INTERPRETATION1.1 DEFINITIONS(a) The meanings of the terms used in this deed poll are set out below.

Term Meaning

Activation Time the time five hours after which completion occurs under the Seven Share Sale Agreement.

Available Payment Amount An amount equal to the total funds (after taking account of any amounts payable under clauses 4.1 and 4.2 of this deed poll) that SNL could legally distribute to its shareholders as a dividend.

Dividend Stopper Event any time that Seven Group would be prohibited from making a dividend or distribution on any share capital over which TELYS4 rank in priority for participation in profits pursuant to section 2.10 of the TELYS4 Terms of Issue.

Exchange the right of the Company, at its option, to redeem, buy back or otherwise cancel the TELYS3in exchange for a cash payment in accordance with clause 3 of the Terms of Issue.

Optional Dividend any dividend declared by the board of SNL other than an Ordinary Dividend.

Optional Dividend

Payment Date

any date on which:

SNL has funds legally available to pay any unpaid Prior Dividend in full (after taking account • of any amounts payable under clause 4.1 of this deed poll); and

no Dividend Stopper Event is subsisting.•

Ordinary Dividend any dividend which a TELYS3 holder would be entitled to receive in respect of a Dividend Period under clause 2.1 of the Terms of Issue, notwithstanding the application of clause 2.4 of the Terms of Issue.

Prior Dividend means any Ordinary Dividend in respect of the two Dividend Periods immediately preceding, but excluding, the current Dividend Period.

Register the register of holders of TELYS3.

Seven Group Seven Group Holdings Limited (ACN 142 003 469).

Seven Share Sale Agreement the share sale agreement under which Seven Group acquires WestTrac Holdings Pty Limited.

Special Exchange Amount has the meaning given to that term in clause 6(b).

Special Exchange End Date means the last Dividend Payment Date immediately prior to the date 80 years after the Activation Time or such earlier Dividend Payment Date as SNL commences winding up or exercises its discretion to Exchange TELYS3 under clause 3.3, 3.4 or 3.5 of the Terms of Issue.

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Term Meaning

TELYS4 Terms of Issue the terms of issue of the TELYS4, as set out in Appendix A to the Seven Group constitution.

Terms of Issue the terms of issue of the TELYS3, as set out in Appendix A to the SNL constitution.

(b) A word or phrase defined in the Terms of Issue has the same meaning in this deed unless the context requires otherwise.

1.2 INTERPRETATIONIn this deed poll:

Headings and bold type are for convenience only and do not affect the interpretation of this deed poll.(a)

The singular includes the plural and the plural includes the singular. Where a word or phrase is defined, its other grammatical (b) forms have a corresponding meaning.

A reference to a document includes all amendments or supplements to, or replacements or novations of that document.(c)

A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or (d) exhibit to, this deed poll and a reference to this deed poll includes any schedule, attachment and exhibit.

Specifying anything in this deed after the words ‘including’, ‘includes’ or ‘for example’ or similar expressions does not limit (e) what else is included.

2 DEED OPERATES AS A DEED POLL2.1 DEED OPERATES AS A DEED POLL

This deed is executed as a deed poll. Each TELYS3 holder has the benefit of this deed, and is entitled to enforce this deed poll (a) against SNL in accordance with its terms even though it is not a party to, or is not in existence at the time of execution and delivery of, this deed.

This deed operates as a deed as between SNL and the TELYS3 holders(b)

2.2 TELYS3 HOLDERS BOUNDIn order to obtain the benefit of this deed poll, each TELYS3 holder and any person claiming through a TELYS3 holder:

is taken to have notice of the terms of this deed poll;(a)

is bound by this deed poll; and(b)

must perform all of the obligations and comply with all restrictions and limitations applicable to it under this deed poll.(c)

3 TERM AND TERMINATION3.1 TERM

This deed poll is irrevocable and remains in full force and effect from the Activation Time until terminated pursuant to clause 3.2;(a)

For the avoidance of doubt, if the Activation Time has not occurred by 30 September 2010, then this deed poll will automatically (b) terminate.

3.2 TERMINATIONSNL’s obligations under this deed poll automatically terminate on the date when no TELYS3 remain outstanding.

3.3 CONSEQUENCES OF TERMINATIONIf this deed poll is terminated under clause 3.2, in addition and without prejudice to any other rights, powers or remedies available to it, SNL is released from its obligations to further perform this deed poll.

4 UNDERTAKINGS4.1 CONDITIONAL UNDERTAKING TO PAY ORDINARY DIVIDEND

Subject to the terms of this deed poll, SNL undertakes that in respect of each Dividend Period, it will: (a)

resolve to pay an Ordinary Dividend in respect of relevant Dividend Payment Date; and1.

pay the Ordinary Dividend on the relevant Dividend Payment Date. 2.

SNL’s obligations under clause 4.1(a) are conditional upon:(b)

SNL having funds legally available to pay the relevant Ordinary Dividend as of the Dividend Payment Date; and1.

no Dividend Stopper Event subsisting on the relevant Dividend Payment Date. 2.

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4.2 CONDITIONAL UNDERTAKING TO PAY OPTIONAL DIVIDENDIf SNL has not paid an Ordinary Dividend because of the operation of clause 4.1(b), SNL undertakes that it will, within 20 Business Days of any Optional Dividend Payment Date resolve to pay, and pay, an Optional Dividend to TELYS3 holders equal to:

the amount of the unpaid Prior Dividend in respect of the (a) Dividend Period two Dividend Periods before the current Dividend Period; plus,

if it has funds legally available to do so, an amount equal (b) to the unpaid Prior Dividend for the Dividend Period immediately prior to the current Dividend Period.

4.3 ORDER IN WHICH AVAILABLE FUNDS TO BE APPLIEDSNL will apply funds which are legally available to pay dividends in the following order:

First, if any amount remains unpaid in respect of the (a) Ordinary Dividends for the two Dividend Periods immediately preceding, but excluding, the current Dividend Period, to pay an Optional Dividend in respect of the earliest of those Dividend Periods for which some or all of the Ordinary Dividend remains outstanding;

Secondly, to pay an Optional Dividend in respect of the (b) later of those Dividend Periods in respect of which some or all of the Ordinary Dividend remains outstanding, if any; and

Thirdly, to pay any Ordinary Dividend in accordance (c) with clause 2.1 of the Terms of Issue.

5 COMMITMENT TO EXCHANGE TELYS3 ON 1 DECEMBER 2014Subject to clause 8, if (and only if ) SNL’s constitution has not been amended to allow SNL to Exchange the TELYS3 on the terms set out in clause 6 by 24 October 2014, SNL must take all necessary steps (including, if necessary, issuing additional equity in SNL to ensure that the TELYS3 can be lawfully Exchanged without contravening Section 254K of the Corporations Act) to Exchange all TELYS3 under clause 3.3 of the Terms of Issue on 1 December 2014.

For the avoidance of doubt, this clause will have no effect on and after any date that SNL’s constitution is amended in any manner that allows SNL to Exchange the TELYS3 as contemplated by clause 6.

6 COMMITMENT TO EXCHANGE TELYS3 ON THE SPECIAL EXCHANGE END DATE

SNL undertakes that it will use its best endeavours (a) (including putting any necessary resolution to SNL shareholders at any subsequent meeting of shareholders) to ensure that it is permitted under its constitution to

Exchange all TELYS3 under clause 3.3 of the Terms of Issue and to comply with this clause 6.

Subject to clauses 5 and 8, SNL undertakes that it will (b) take all necessary steps (including, if necessary, issuing additional equity in SNL to ensure that the TELYS3 can be lawfully redeemed without contravening Section 254K of the Corporations Act) to Exchange all TELYS3 under clause 3.3 of the Terms of Issue and to comply with this clause 6 on the Special Exchange End Date.

If SNL Exchanges the TELYS3 in accordance with clause 6(a), (c) in addition to any amounts payable under clause 3.2 of the Terms of Issue, on Exchange, SNL will, subject to clause 8, pay each TELYS3 Holder an amount equal to that Holder’s pro rata share of the Special Exchange Amount (SEA).

For purposes of this clause 6 and subject to clause 6(e), the (d) Special Exchange Amount in respect of all TELYS3 holders will be the future value (as of the Special Exchange End Date) of the aggregate amount of dividends payable to all TELYS3 holders (whether as Ordinary Dividends, Optional Dividends or pursuant to clause 3.2(2) of the Terms of Issue or otherwise) from the Activation Time to the Special Exchange End Date, compounded semi-annually on each scheduled Dividend Payment Date (whether a dividend is paid on that date or not) at the rate on exchange (ROE).

The SEA in clause 6(d) will be reduced by the Cumulative (e) Ordinary Dividend (COD) which is calculated as the future value (as of the Special Exchange End Date) of the aggregate amount of actual dividends prepaid to all TELYS3 holders (whether as Ordinary Dividends, Optional Dividends or pursuant to clause 3.2(2) of the Terms of Issue or otherwise) from the Activation Time to the Special Exchange End Date, compounded semi-annually on each scheduled Dividend Payment Date at the ROE.

For purposes of clauses 6(d) and 6(e), the ROE will be (f ) the Dividend Rate calculated in accordance with clause 2.1 of the Terms of Issue except that for purposes of this calculation, where the actual Market Rate in effect on a particular Dividend Payment Date is not known as of that Dividend Payment Date , the Market Rate will be the long term swap rate.

7 NO CONVERSIONAfter the Activation Time, SNL undertakes that where it has the discretion to either Convert or Exchange any TELYS3 underclause 3.3 or clause 3.4 of the Terms of Issue, it will exercise its discretion to Exchange, rather than Convert.

8 INSOLVENT WINDING UPNothing in clause 6 or clause 5 will require SNL to pay an amount to Exchange the TELYS3 in an insolvent winding up beyond any amount which it has available or is able to obtain from profits or proceeds of a new issue.

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9 DETERMINATION OF WHETHER FUNDS LEGALLY AVAILABLE A determination by the directors of SNL, reasonably based on the advice of external accountants and lawyers, as to whetherthere are funds legally available for the payment of dividends will be determinative of this issue for the purpose of this deed.

10 MISCELLANEOUS10.1 HOW AND WHERE NOTICES MAY BE SENTA notice or other communication in respect of this deed poll (Notice) must be in writing and delivered personally to the addressee, or left or sent by prepaid post to the addressee’s address, or faxed to the addressee’s fax number, set out in Schedule 1 or as specified to the sender by the other party by notice:

SNL

Address

Level 2, 38-42 Pirrama RoadPyrmont NSW 2009

Phone

(02) 8777 7777

Email

10.2 WHEN NOTICES ARE TAKEN TO HAVE BEEN GIVEN AND RECEIVED

A Notice sent by post is regarded as given and received on (a) the second Business Day following the date of postage.

A Notice delivered or received other than on a Business Day (b) or after 4.00pm (recipient’s time) is regarded as received at 9.00am on the following Business Day and a Notice delivered or received before 9.00am (recipient’s time) is regarded as received at 9.00am.

10.3 GOVERNING LAW AND JURISDICTIONThis deed poll is governed by the law in force in (a) New South Wales.

SNL irrevocably submits to the non exclusive jurisdiction (b) of courts exercising jurisdiction in New South Wales and courts of appeal from them in respect of any proceedings arising out of or in connection with this deed.

SNL irrevocably waives any objection to the venue of any (c) legal process in these courts on the basis that the processhas been brought in an inconvenient forum.

10.4 WAIVERA TELYS3 holder may not rely on the words or conduct of SNL as a waiver of any right unless the waiver is in writing and signed by SNL.

10.5 AMENDMENTSA provision of this deed poll may not be amended (other than amendments which do not materially adversely affect the rights of TELYS3 holders under this deed poll, which SNL may implement in its discretion by executing an amending deed) unless an amendment is proposed by SNL and is approved by a resolution passed by 75% or more of votes at a meeting of TELYS3 holders called by SNL in accordance with the applicable provisions of the constitution of SNL.

10.6 CUMULATIVE RIGHTSThe rights, powers and remedies of SNL under this deed poll are cumulative and do not exclude any other rights, powers or remedies provided by law independently of this deed poll.

10.7 ASSIGNMENTThe rights created by this deed poll are personal to SNL (a) and each TELYS3 holder and must not be dealt with at law or in equity.

Any purported dealing in contravention of clause 10.7(a) (b) is invalid.

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SIGNING PAGEEXECUTUED POLL IN NEW SOUTH WALES

Signed sealed and delivered bySeven Network Limited

by

sign here

Attorney

print name

sign here

Witness

print name

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TERMS OF ISSUEANNEXURE 3

Annexure 1 77

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1 FACE VALUEThe face value of each TELYS4 will be $100 (Face Value).

2 DIVIDENDS2.1 DIVIDENDSSubject to these Terms of Issue, the Holder of each TELYS4 is entitled to a dividend in respect of each Dividend Period calculated in accordance with the following formula:

Dividend = Dividend Rate x $100 x N

365

where:

N is the number of days in the relevant Dividend Period; and

Dividend Rate, expressed as a percentage per annum, is calculated in accordance with the following formula:

(Market Rate + Margin) x (1 – T)

where:

Market Rate means

the Bank Bill Swap Rate for 180 day bills applying on the first Business Day of the Dividend Period expressed as a percentage per annum;

Margin means 4.75% per annum; and

T means the Australian corporate tax rate applicable to the franking account of the Company as at the relevant Dividend Payment Date, expressed as a decimal.

2.2 DIVIDEND FOR THE FIRST DIVIDEND PERIODSubject to these Terms of Issue, in respect of the First Dividend Period, the Dividend to which Holders are entitled is calculated under this clause instead of clause 2.1, as follows:

if the TELYS4 are allotted on or before 14 May 2010 Holders (a) will receive a fully franked dividend of $2.4154 per TELYS4 held (being 4.8440% per annum (the Dividend Rate for the Dividend Period from 30 November 2009 until 30 May 2010) x $100 x 182/365); and

if the TELYS4 are allotted after 14 May 2010 the amount (b) calculated applying the formula in clause 2.1 as if:

the Market Rate were the Bank Bill Swap Rate for 1. 180 day bills applying on 31 May 2010; and

the Dividend Period had commenced on 31 May 2010 2. rather than on the Allotment Date.

2.3 FRANKINGIf any dividend under clause 2.1, clause 2.2 or clause 2.10(d) is not franked to 100% under Part 3-6 of the Tax Act, the amount of the dividend will be adjusted in accordance with the following formula:

D

1-[T x (1-f )]

where:

D is the amount of the dividend calculated under clause 2.1, clause 2.2 or under clause 2.10(d) (as applicable);

T has the same meaning as in clause 2.1; and

f is the franking percentage (within the meaning of Part 3-6 of the Tax Act) of the dividend, expressed as a decimal to four decimal places.

2.4 PAYMENT OF DIVIDENDSThe payment of a dividend (including an optional dividend under clause 2.10(d)) is subject to:

the Directors, at their discretion, resolving to pay that (a) dividend; and

there being funds legally available for the payment of (b) dividends.

2.5 NON-CUMULATIVE DIVIDENDSIf and to the extent that all or any part of a dividend is not paid because of the provisions of clause 2.4, the Holder has no claim in respect of such non-payment.

For the avoidance of doubt, the Holder may nonetheless participate in an optional dividend that may reflect unpaid amounts of dividends if the Directors resolve to pay such a dividend as envisaged in clause 2.10(d).

2.6 CALCULATION OF DIVIDENDSAll calculations of dividends will be to four decimal places. For the purposes of making any dividend payment in respect of a Holder’s aggregate TELYS4, any fraction of a cent will be disregarded.

2.7 DIVIDEND PAYMENT DATESSubject to this clause 2, dividends under clause 2.1 will be (a) payable on each TELYS4 in arrears on:

each 31 May and 30 November until the TELYS4 are 1. Converted or Exchanged; and

their Conversion Date or Exchange Date determined 2. under clause 3.

Subject to this clause 2, an optional dividend under (b) clause 2.10(d) will be payable on the date determined by the Directors.

If the date for payment specified in paragraphs (a) or (b) (c) is not a Business Day, payment will be made on the next Business Day.

2.8 RECORD DATESA dividend is only payable to those persons registered as Holders as at 5:00pm (Sydney time) on the Record Date in respect of that dividend.

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2.9 DEDUCTIONSThe Company will be entitled to deduct from any dividend payable to a Holder the amount of any withholding or other tax, duty or levy required by law to be deducted in respect of such dividend payment. If any such deduction has been made and the amount of the deduction accounted for by the Company to the appropriate authority and the balance of the amount payable to the Holder has been paid to the Holder concerned, then the full amount payable to such Holder is deemed to have been duly paid in full and satisfied by the Company.

The Company must pay the full amount required to be deducted from any dividend payable to the relevant authority within the time allowed for making such payment without incurring penalty under the applicable law and must, if required by any Holder, deliver to that Holder a copy of the relevant receipt issued by the relevant authority without delay after it is received by the Company.

2.10 RESTRICTIONS IN CASE OF NON-PAYMENT If for any reason a dividend has not been paid in full within 20 Business Days after its Dividend Payment Date, the Company must not without approval of a special resolution passed at a separate meeting of Holders:

resolve to pay, or pay, a cash dividend or make any (a) distribution on any share capital over which TELYS4 rank in priority for participation in profits; or

redeem, reduce, cancel, or buy-back for any consideration (b) any share capital of the Company (other than to Convert or Exchange a TELYS4),

until such time as:

two consecutive dividends stated to be payable to Holders (c) under clause 2.1 thereafter have been paid in full to the Holders; or

an optional dividend has been paid in full to the Holders (d) equal to the unpaid amount (if any) of the two immediately preceding dividends to which Holders were entitled under clause 2.1 but which were unpaid (including due to the provisions of clause 2.4) prior to the date of payment of the optional dividend; or

all TELYS4 have been Converted or Exchanged.(e)

2.11 NON-COMPLIANCE WITH RESTRICTIONSIf the Company acts in breach of clause 2.10, a Holder may, within 25 Business Days after becoming aware of the breach, request that the Company Convert all the TELYS4 held by the Holder. Such request is to be in writing addressed to the Company.

The Company must either Convert or Exchange all of the TELYS4 held by a Holder who serves a valid request under this clause 2.11. For the avoidance of doubt, the Company can elect in that circumstance whether to Convert or Exchange. The Conversion Date or Exchange Date will be the next Dividend

Payment Date which is at least 25 Business Days after the request is received by the Company.

3 CONVERSION AND EXCHANGE3.1 MEANING OF CONVERSIONEach TELYS4 confers all of the rights attaching to one fully paid Ordinary Share but these rights do not take effect until 5.00pm (Sydney time) on the date that the TELYS4 is Converted as determined below. At that time:

all other rights and restrictions conferred on that TELYS4(a)

under these Terms of Issue will no longer have effect; and

that TELYS4 will, once Converted, rank equally with all other (b) fully paid Ordinary Shares then on issue and the Company will issue a statement that the holder of that share holds a share so ranking.

The taking effect of the rights of a TELYS4 which are the same rights as the rights attaching to one fully paid Ordinary Share under this clause and the allotment of additional Ordinary Shares under clause 3.7 are, for the purposes of these Terms of Issue, together termed “Conversion”. Conversion does not constitute cancellation, redemption or termination of a TELYS4 or an issue, allotment or creation of a new share (other than the additional Ordinary Shares allotted under clause 3.7).

3.2 MEANING OF EXCHANGE“Exchange”, in relation to a TELYS4, means the Company at its option redeeming, buying back or otherwise cancelling the TELYS4 for an amount equal to the sum of:

its Face Value; and 1.

the unpaid amount (if any) of the two immediately 2. preceding dividends to which Holders were entitled under clause 2.1 (adjusted in accordance with the formula in clause 2.3 with necessary changes if this amount is not fully franked) but which were unpaid (including due to the provisions of clause 2.4) prior to the relevant Exchange Date.

In each case, payment to the relevant Holder must be made on the relevant Exchange Date determined under these Terms of Issue.

3.3 CONVERSION OR EXCHANGE EVENTSThe Company may Convert or Exchange all or some of the TELYS4 by giving notice to the relevant Holders:

at least 25 Business Days (but no more than 6 months) (a) before any Dividend Payment Date; or

if the Directors resolve (having obtained an opinion from (b) a reputable legal counsel or a reputable tax or accounting adviser) that a change in any law, interpretation or ruling issued by any relevant governmental body (including one relating to taxation) or accounting standard (or interpretation by an accounting standard) has occurred (or is announced) and that change will:

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materially increase the net costs to the Company of 1. having TELYS4 on issue;

affect whether TELYS4 can be franked or whether the 2. Holders are entitled to franking credits;

affect whether TELYS4 are classified entirely as equity 3. for accounting purposes; or

impose additional requirements that the Directors 4. consider unacceptable.

The relevant Conversion Date or Exchange Date will be the next Dividend Payment Date, which is at least 25 Business Days immediately after the Company gives notice to the relevant Holders under this clause 3.3.

3.4 TAKEOVERS AND SCHEMES OF ARRANGEMENTIn addition, the Company may Convert or Exchange all or some of the TELYS4 by giving notice to the relevant Holders if:

a takeover bid is made to acquire all or some of the (a) Ordinary Shares and the offer is, or becomes, unconditional and:

the bidder has a relevant interest in more than 50% of 1. the Ordinary Shares on issue; or

the Directors issue a statement recommending 2. acceptance of the offer; or

a court approves the convening of a meeting of the holders (b) of Ordinary Shares to consider a scheme of arrangement under Part 5.1 of the Corporations Act which, when implemented, would result in a person having voting power in the Company of more than 50%.

In that event, the relevant Conversion Date or Exchange Date will be the Business Day which is 25 Business Days after the date the Company gives notice to the relevant Holders under this clause 3.4.

3.5 MINIMUM NUMBER ON ISSUEThe Company cannot elect to Convert or Exchange only some TELYS4 if, as at the date of the notice to relevant Holders, that Conversion or Exchange would result in there remaining not Converted or Exchanged TELYS4 with an aggregate Face Value of less than $100 million. In a partial Conversion or Exchange, the Company must endeavour to treat Holders on an approximately equal basis, but may discriminate between Holders to take account of the effect of the Conversion or Exchange on marketable parcels and other factors considered relevant by the Company.

3.6 FORMALITIES OF CONVERSION AND EXCHANGEWhere the Company elects to Convert or Exchange a TELYS4 (a) under these Terms of Issue, the Company must:

Convert or Exchange (as applicable) TELYS4 in 1. accordance with these Terms of Issue; and

at least 25 Business Days before the relevant Conversion 2. Date or Exchange Date, give notice to the relevant Holder indicating whether TELYS4 will be Converted or

Exchanged (or whether a combination of those actions will be taken), failing which the Company is taken to have elected to and must Convert the TELYS4.

The Company may elect to Convert or Exchange TELYS4 (b) under clauses 3.3 or 3.4 conditional on some act or event occurring or not occurring.

3.7 CONVERSION AND ADDITIONAL ORDINARY SHARES This clause will apply if TELYS4 are to be Converted. Upon (a) Conversion, each TELYS4 will entitle the relevant Holder to be allotted an additional number of Ordinary Shares equal to one less than the Conversion Ratio, where the Conversion Ratio is an amount (including any fractions) calculated in accordance with the following formula (Conversion Ratio):

Conversion Ratio = A

VWAP – (CD x VWAP)

where:

A means an amount equal to the sum of:

the Face Value; and 1.

the unpaid amount (if any) of the two immediately 2. preceding dividends to which Holders were entitled under clause 2.1 (adjusted in accordance with the formula in clause 2.3 with necessary changes) but which were unpaid (including due to the provisions of clause 2.4) prior to the relevant Conversion Date;

CD means the Conversion discount of 2.5% (Conversion

Discount); and

VWAP means the VWAP during the period (Reference Period) of 20 Business Days immediately preceding, but not including, the relevant Conversion Date.

Where the total number of additional Ordinary Shares to be (b) allotted to a Holder on Conversion of their TELYS4 includes a fraction, that fraction will be disregarded.

3.8 ADJUSTMENT TO VWAPFor the purposes of calculating VWAP in clause 3.7:

where, on some or all of the Business Days in the relevant (a) Reference Period, Ordinary Shares have been quoted on ASX as cum dividend or cum any other distribution or entitlement and TELYS4 will Convert into Ordinary Shares after the date those Ordinary Shares no longer carry that entitlement, then the VWAP on each of the Business Days on which those Ordinary Shares have been quoted cum dividend or cum any other distribution or entitlement shall be reduced by an amount (Cum Value) equal to:

(in the case of a dividend or other distribution), the 1. amount of that dividend or other distribution including, if the dividend or other distribution is franked, the amount that would be included in the assessable income of a recipient of the dividend or other

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distribution who is both a resident of Australia and a natural person under the Tax Act;

(in the case of any other entitlement which is traded on 2. ASX during the relevant Reference Period), the volume weighted average sale price of all such entitlements sold on ASX during the Reference Period on the Business Days on which those entitlements were traded; or

(in the case of an entitlement not traded on ASX 3. during the relevant Reference Period), the value of the entitlement as reasonably determined by the Directors; and

where, on some or all of the Business Days in the relevant (b) Reference Period, Ordinary Shares have been quoted on ASX as ex dividend or ex any other distribution or entitlement, and TELYS4 will Convert into Ordinary Shares which would be entitled to receive the relevant dividend or other distribution or entitlement, the VWAP on each of the Business Days on which those Ordinary Shares have been quoted ex dividend or ex any other distribution or entitlement shall be increased by the Cum Value.

Any such adjustment must be notified to the Holders as soon as practicable.

3.9 DISCRETION IN ADJUSTMENT OF CONVERSION MECHANISMWhere:

the Ordinary Shares are reconstructed, consolidated, (a) divided or reclassified into a lesser or greater number of securities;

the number of additional Ordinary Shares to be allotted on (b) Conversion of TELYS4 is not, in the reasonable opinion of the Directors, appropriate in any particular circumstances;

the Company undertakes a bonus issue or makes a pro (c) rata offer to holders of Ordinary Shares to subscribe for, or purchase, securities in the Company or in any other body corporate in a way which, in the reasonable opinion of the Directors, has a diluting or concentrative effect on the value of Ordinary Shares; or

any other similar event occurs in relation to the Company (d) that may have a diluting or concentrative effect on the value of the Ordinary Shares, and the Directors determine that any such occurrence would, in the reasonable opinion of the Directors, affect the relative values of the TELYS4 and the Ordinary Shares,

the Directors may:

make such alterations to the definition of VWAP or to (e) the Conversion Discount (as defined in clause 3.7) as the Directors reasonably consider appropriate or necessary to maintain that relativity; or

extend an entitlement to the Holders to participate in such (f ) distribution or pro rata offer based upon the number of Ordinary Shares to which those Holders would have been entitled if their TELYS4 had been Converted on a date nominated by the Directors and adapting the formula in clause 3.7 as the Directors reasonably consider appropriate to maintain the relativity.

An alteration under paragraph (e) or (f ) will be binding on and must be notified to the Holders as soon as practicable.

4 TELYS4 GENERAL RIGHTS4.1 TELYS4 RIGHTS RANKINGTELYS4 which have not been Converted rank equally amongst themselves in all respects.

4.2 PREFERENTIAL DIVIDENDUntil Conversion, TELYS4 rank in priority to Ordinary Shares for the payment of dividends.

4.3 RETURN OF CAPITALUntil Conversion, if there is a return of capital on a winding up of the Company, Holders will be entitled to receive out of the assets of the Company available for distribution to shareholders, in respect of each TELYS4 held, a cash payment equal to the sum of:

the amount of any dividend stated to be payable under (a) clause 2.1 (whether resolved to be paid or not) calculated on a daily basis (assuming a 365 day year) throughout the period from and including the date of the preceding Dividend Payment Date (being the commencement of the relevant Dividend Period relating to this dividend) up to the date of commencement of the winding up; and

(b) the Face Value, before any return of capital is made (b) to holders of Ordinary Shares or any other class of shares in the Company ranking behind TELYS4. TELYS4 do not confer on their Holders any right to participate in profits or property except as set out in these Terms of Issue.

4.4 SHORTFALL ON WINDING UPIf, upon a return of capital, there are insufficient funds to pay in full to Holders the relevant amounts referred to in clause 4.3 and to other holders the amounts payable to them in respect of any other shares in the Company ranking as to such distribution equally with TELYS4 on a winding up of the Company, the Holders and the holders of such other shares will share in any distribution of assets of the Company in proportion to the amounts to which they respectively are entitled.

4.5 PARTICIPATION IN SURPLUS ASSETSUntil Conversion, TELYS4 do not confer on the Holders any further right to participate in the surplus assets of the Company on a winding up.

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4.6 RESTRICTIONS ON OTHER ISSUESUntil all TELYS4 have been Converted or Exchanged, the Company must not, without approval of a special resolution passed at a separate meeting of Holders, issue shares ranking in priority to the TELYS4 or permit the variation of any rights of any existing shares so that those shares rank equally with or in priority to the TELYS4, but the Directors are at all times authorised to issue further preference shares ranking equally with any TELYS4.

4.7 PARTICIPATION IN NEW ISSUESUntil Conversion, TELYS4 confer no rights to subscribe for new securities in the Company or to participate in any bonus issues.

4.8 TAKEOVERS AND SCHEMES OF ARRANGEMENTIf a takeover bid is made for Ordinary Shares, acceptance of which is recommended by the Directors, or the Directors recommend a members’ scheme of arrangement, the Company will use reasonable endeavours to procure that equivalent takeover offers are made to Holders or that they participate in the scheme of arrangement.

4.9 FURTHER ASSURANCESIf the Company decides to Convert or Exchange TELYS4 in accordance with these Terms of Issue, the Holder must:

vote in favour (subject to compliance with the law and to (a) the extent that the Holder is entitled to do so) or otherwise abstain from any required resolution;

provide all documentation and execute any authorisation (b) or power necessary; and

take all other action necessary or desirable, to effect the (c) Conversion or Exchange.

4.10 SALE OF SHARES ON EXCHANGEEach Holder irrevocably offers to sell all or some (as applicable) of its TELYS4 on the relevant Exchange Date to the Company for the relevant amount determined under clause 3.2 if the Company elects to buy back TELYS4 under these Terms of Issue.

4.11 APPOINTMENT OF AGENTEach Holder irrevocably appoints the Company and each of its authorised officers (each an “Appointed Person”) severally to be the agent and attorney of the Holder with power in the name and on behalf of the Holder to do all such things and acts including signing all documents, including any share transfer or buy-back agreement, as may, in the opinion of the Appointed Person, be necessary or desirable to be done in order to give effect to clauses 4.9 and 4.10.

5 VOTING RIGHTSTELYS4 do not entitle their Holders to vote at any general meeting of the Company except in the following circumstances:

on a proposal:(a)

to reduce the share capital of the Company;1.

that affects rights attached to the TELYS4;2.

to wind up the Company; or3.

for the disposal of the whole of the property, business 4. and undertaking of the Company;

on a resolution to approve the terms of a buyback (b) agreement;

during a period in which a dividend or part of a dividend (c) payable on TELYS4 is in arrears; or

during the winding up of the Company.(d)

For this purpose, a dividend will be in arrears only if, at the time of the meeting, the Directors have resolved to pay the dividend but it has not been paid in full to relevant Holders, and the relevant payment date for that dividend has passed.

6 QUOTATION ON ASXThe Company must use all reasonable endeavours and furnish all such documents, information and undertakings as may be reasonably necessary in order to procure and maintain, at its own expense, quotation of all TELYS4 on the ASX, and all Converted TELYS4 and additional Ordinary Shares issued under clause 3.7 on each of the stock exchanges on which other Ordinary Shares are quoted on the relevant Conversion Date.

7 AMENDMENTS TO THE TERMS OF ISSUESubject to complying with all applicable laws, the Company may without the authority, assent or approval of Holders amend or add to these Terms of Issue if such amendment or addition is, in the opinion of the Company:

of a formal, minor or technical nature;(a)

made to correct a manifest error; or(b)

not likely (taken as a whole and in conjunction with all (c) other modifications, if any, to be made contemporaneously with that modification) to be materially prejudicial to the interests of the Holders.

7A BROADCASTING SERVICES ACT INFORMATIONThis clause constitutes a requirement for each Holder (a) to which this clause 7A applies to provide a statutory declaration under and for the purposes of article 3.6 of the Constitution. This clause has effect only at such time as the Company or any entity in which the Company controls or has a substantial holder is subject to the ownership and other restrictions in the Broadcasting Services Act.

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For the purposes of this clause, Part 6C.1 of the (b) Corporations Act applies to TELYS4 as if:

TELYS4 were:1.

voting shares with one vote per TELYS4; and(A)

the only issued shares in the Company; and(B)

the percentage applicable for the definition of 2. “substantial holding” in section 9 of the Corporations Act were 10% (instead of 5%); and

the percentage in section 671B(1)(b) of the Corporations 3. Act were 2% (instead of 1%).

If the Holder is aware that the Holder or a Relevant (C) Person is a substantial holder of TELYS4, the Holder must give the Company a statutory declaration:

containing the information and accompanied by the 4. documents that the Holder or the Relevant Person (as the case may be) would need to include in a notice given under Part 6C.1 of the Corporations Act in relation to that substantial holding; and

do so on each occasion that the Holder or the Relevant 5. Person would be required to give that information under that Part.

For the purposes of this clause 7A, a person is a (D) Relevant Person if the person has a substantial holding of TELYS4 and TELYS4 included in that substantial holding are held by the Holder.

8 INTERPRETATION(a) Unless the context otherwise requires, if there is any (a) inconsistency between the provisions of these Terms of Issue and the Constitution, then, to the maximum extent permitted by law, the provisions of these Terms of Issue will prevail.

If a calculation is required under these Terms of Issue, unless (b) the contrary intention is expressed, the calculation will be performed to four decimal places.

Definitions and interpretation under the Constitution will (c) also apply to these Terms of Issue.

Where, under these Terms of Issue, the day on or by which (d) any thing is to be done is not a Business Day, that thing must be done on or by the following Business Day.

The following expressions shall have the following (e) meanings:

Allotment Date the day on which TELYS4 are allotted to Applicants under the TELYS3 Scheme or the TELYS3 Prospectus.

ASX means ASX Limited;

Bank Bill Swap Rate means, for each Dividend Period, the rate, expressed as a percentage per annum, calculated as the average mid-rate for bills of a term of 180 days which average rate is displayed on Reuters page designated BBSW (or any page which replaces that page) on the first business day of the relevant Dividend Period, or if there is a manifest error in

the calculation of that average rate or that average rate is not displayed by 10.30am (Sydney time) on that date, the rate specified in good faith by the Company at or around that time on that date having regard, to the extent possible, to:

the rate otherwise bid and offered for bills of that 1. term or for funds of that tenor displayed on that page designated BBSW (or any page which replaces that page) at that time on that date; and

if bid and offer rates for bills of that term are not 2. otherwise available, the rates otherwise bid and offered for funds of that tenor at or around that time;

Business Day means a day on which trading on ASX is conducted;

Company means Seven Group Holdings Limited (ACN 142 003 469);

Constitution means the constitution of the Company;

Conversion has the meaning set out in clause 3.1 and Convert and Converted have corresponding meanings;

Conversion Date has the meaning set out in clauses 2.11, 3.3 and 3.4, as applicable;

Conversion Ratio means an amount calculated in accordance with the formula set out in clause 3.7(b);

Corporations Act means the Corporations Act 2001 (Cth);

Directors means the directors of the Company;

Dividend includes a dividend to which a Holder is entitled under clause 2.1, clause 2.2 or clause 2.10(d);

Dividend Payment Date means each date on which a dividend is payable in accordance with clause 2.7 whether or not a dividend is paid on that date;

Dividend Period means a period from (and including) either the Allotment Date or a Dividend Payment Date under clause 2.7(a) (whichever is the later) until (but not including) the following Dividend Payment Date;

Exchange has the meaning set out in clause 3.2;

Exchange Date has the meaning set out in clauses 2.11, 3.3 and 3.4, as applicable;

Face Value means $100;

First Dividend Period means the Dividend Period which commences on the Allotment Date;

Holder means a holder of a TELYS4;

Margin has the meaning set out in clause 2.1;

Ordinary Share means an ordinary share in the capital of the Company;

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Prospectus means the prospectus dated on or about 12 March 2010 relating to the issue of TELYS4;

Record Date means, in relation to a dividend, the date which is 11 Business Days before the relevant Dividend Payment Date for that dividend or such other date as the Company determines in its absolute discretion and communicates to ASX not less than 6 Business Days before the specified record date, or such other date as is required by ASX.

Reference Period has the meaning set out in clause 3.7;

Tax Act means:

the Income Tax Assessment Act 1936 or the Income Tax 1. Assessment Act 1997 as the case may be as amended or replaced and a reference to any section of the Income Tax Assessment Act 1936 includes a reference to that section as rewritten in the Income Tax Assessment Act 1997;

any other Act setting the rate of income tax payable; 2. and

any regulation promulgated thereunder.3.

TELYS3 means Transferable Extendable Listed Yield Shares which are non-cumulative, redeemable and convertible preference shares in Seven Network Limited (ABN 21 052 816 789);

TELYS3 Prospectus means any prospectus in respect of the TELYS4 issued in respect of any invitation to TELYS3 holders to exchange TELYS3 for TELYS4;

TELYS3 Scheme means the scheme of arrangement between Seven Network Limited (ABN 71 052 816 789) and holders of TELYS3 implemented in 2010;

TELYS4 means Transferable Extendable Listed Yield Shares which are non-cumulative, redeemable and convertible preference shares in the Company;

VWAP means the average of the daily volume weighted average sale price of Ordinary Shares sold on ASX during the relevant period or on the relevant days (excluding any transaction defined in the ASX Business Rules as “special” crossings prior to the commencement of normal trading, crossings during the after hours adjust phase or any overseas trades or the exercise of options over Ordinary Shares).F

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Corporate Directory

COMPANYSeven Network Limited

ACN 052 816 789

REGISTERED OFFICELevel 238-42 Pirrama RoadPyrmont NSW 2009

COMPANY SECRETARYMr Warren W Coatsworth

SEVEN REGISTRY Registries Limited

Level 7, 207 Kent Street

Sydney NSW 2000

FINANCIAL ADVISERS TO SEVENGrant Samuel Corporate FinanceLevel 19Governor Macquarie Tower1 Farrer PlaceSydney NSW 2000

J.P. Morgan Australia LimitedLevel 32Grosvenor Place225 George StreetSydney NSW 2000

LEGAL ADVISERFreehillsLevel 38MLC CentreMartin PlaceSydney NSW 2000

INVESTIGATING ACCOUNTANTKPMG Transaction Services (Australia) Pty Limited10 Shelley StreetSydney NSW 2000

INDEPENDENT EXPERTDeloitte Corporate Finance Pty Limited Grosvenor Place225 George StreetSydney NSW 2000

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Media Group Scheme Booklet For personal use only · consult your financial, ... of the Corporations...

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Transcript of Media Group Scheme Booklet For personal use only · consult your financial, ... of the Corporations...