Exhibit 99.1
================================================================================
IACI MATTERS AGREEMENT
BY AND AMONG
GENERAL ELECTRIC COMPANY,
NATIONAL BROADCASTING COMPANY HOLDING, INC.,
NATIONAL BROADCASTING COMPANY, INC.,
UNIVERSAL STUDIOS HOLDING III CORP.
AND
VIVENDI UNIVERSAL, S.A.
DATED AS OF OCTOBER 8, 2003
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.....................................................................................1
Section 1.1 Definitions...........................................................................1
Section 1.2 Other Capitalized Terms...............................................................5
Section 1.3 Other Definitional Provisions.........................................................5
ARTICLE II THE PREFERRED INTERESTS.........................................................................6
Section 2.1 Issuance of Vivendi Secured Promissory Note; L/C Costs................................6
Section 2.2 IACI Shares...........................................................................7
Section 2.3 Monetization of the IACI Shares.......................................................8
Section 2.4 3.6% Cash Dividends on the Class B Preferred Interests................................9
Section 2.5 Tax Assumptions and Indemnity........................................................10
Section 2.6 Transfers of the Preferred Interests and the Common Interests........................12
Section 2.7 VUE Documents........................................................................12
ARTICLE III THE IACI LITIGATION............................................................................13
Section 3.1 Tax Litigation Distributions.........................................................13
Section 3.2 Right to Control IACI Litigation.....................................................13
ARTICLE IV RESTRUCTURING ARRANGEMENTS.....................................................................14
Section 4.1 IACI Restructuring...................................................................14
Section 4.2 Effect of an IACI Restructuring......................................................17
Section 4.3 Indemnity............................................................................17
ARTICLE V TERMINATION....................................................................................18
Section 5.1 Termination..........................................................................18
Section 5.2 Effect of Termination................................................................18
ARTICLE VI GENERAL PROVISIONS.............................................................................18
Section 6.1 Governing Law........................................................................18
Section 6.2 Notices..............................................................................18
Section 6.3 Entire Agreement.....................................................................20
Section 6.4 Purposes; Resolution of Ambiguities..................................................20
Section 6.5 Amendment; Waiver....................................................................21
Section 6.6 Headings; References.................................................................21
Section 6.7 Counterparts.........................................................................21
Section 6.8 Assignment...........................................................................21
Section 6.9 Severability; Enforcement............................................................21
Section 6.10 Specific Performance.................................................................22
Section 6.11 Jurisdiction; Waiver of Jury Trial...................................................22
Section 6.12 Mediation............................................................................22
Section 6.13 Fees and Expenses....................................................................23
i
IACI MATTERS AGREEMENT
This IACI MATTERS AGREEMENT, dated as of October 8, 2003,
is by and among GENERAL ELECTRIC COMPANY, a New York corporation ("GE"),
NATIONAL BROADCASTING COMPANY HOLDING, INC., a Delaware corporation ("NBC
HOLDING"), NATIONAL BROADCASTING COMPANY, INC., a Delaware corporation and a
wholly-owned, indirect Subsidiary of GE ("NBC" and, together with GE and NBC
Holding, the "GE COMPANIES"), VIVENDI UNIVERSAL, S.A., a societe anonyme
organized under the Laws of France ("VIVENDI"), and UNIVERSAL STUDIOS HOLDING
III CORP., a Delaware corporation and a Subsidiary of Vivendi ("USH3").
W I T N E S S E T H:
WHEREAS, Vivendi conducts the Company Business primarily
through Vivendi Universal Entertainment LLLP, a Delaware limited liability
limited partnership and a Subsidiary of Vivendi ("VUE"), and VUE's controlled
Affiliates;
WHEREAS, the parties hereto are simultaneously entering
into the Business Combination Agreement that provides, among other things, for
the combination of the Company Business and the NBC Business;
WHEREAS, InterActiveCorp, a Delaware corporation (formerly
USA Interactive and prior thereto USA Networks, Inc.) ("IACI"), beneficially
owns Common Interests, Class A Preferred Interests and Class B Preferred
Interests in VUE; and
WHEREAS, the parties hereto desire to make certain
covenants and agreements regarding certain arrangements with respect to the
Class A and Class B Preferred Interests (collectively, the "PREFERRED
INTERESTS") and the other matters set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained in the Business
Combination Agreement and in this Agreement, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement:
"AFFILIATE TRANSACTION COVENANT" has the meaning set forth
in Section 4.1(c).
"AGGREGATE ADVERSE EFFECT" means any change, impact or
consequence that, after giving effect to any contemporaneous offsetting benefits
(including, in the case of a Restructuring, Vivendi's obligations to bear the
costs and burdens of such Restructuring), would place GE in a less favorable tax
1
or accounting position than that currently anticipated by GE from the
transactions contemplated by this Agreement, the Business Combination Agreement
and the other Ancillary Agreements or that would otherwise have a significant
adverse impact on GE, NBC or their controlled Affiliates that would not
otherwise exist but for such Restructuring.
"AGREEMENT" means this IACI Matters Agreement as in effect
and as amended, restated, supplemented or otherwise modified from time to time.
"BUSINESS COMBINATION AGREEMENT" means that certain
Business Combination Agreement, dated as of the date hereof, by and among the
parties hereto as in effect and as amended, restated, supplemented or otherwise
modified from time to time.
"CASH DIVIDEND AMOUNT" has the meaning set forth in Section
2.4.
"CASH DIVIDEND DETERMINATION AMOUNT" has the meaning set
forth in Section 2.4.
"CLASS B PREFERRED CONSIDERATION" has the meaning set forth
in Section 2.2(a).
"CLASS B PREFERRED UNWIND PAYMENT" has the meaning set
forth in Section 2.2(a).
"CLASS A TAX BENEFIT AMOUNT" means, for any period, the NBC
Tax Benefit attributable to taxable income of VUE having been allocated to the
holder of the Class A Preferred Interests in respect of such Class A Preferred
Interests for such period (rather than to the Common Interests) under Section
7.02(a)(i)(B) of the VUE Partnership Agreement.
"CLASS B TAX BENEFIT AMOUNT" means, for any period, the NBC
Tax Benefit attributable to taxable income of VUE having been allocated to the
holder of the Class B Preferred Interests in respect of such Class B Preferred
Interests for such period (rather than to the Common Interests) under Section
7.02(a)(i)(B) of the VUE Partnership Agreement.
"CPR" has the meaning set forth in Section 6.12.
"DEFEASANCE INDEBTEDNESS" has the meaning set forth in
Section 2.1(a).
"DISPUTES" has the meaning set forth in Section 6.12.
"DISPUTE NOTICE" has the meaning set forth in Section 6.12.
"EXCESS AMOUNT" means the difference, which may be a
negative amount, of (i) the sum of (A) the Market Value (plus the amount of any
declared and unpaid dividends or other distributions on such shares as well as
2
any cash dividends not theretofore taken into account in the definition of IACI
Shares Dividend Benefit Amount or otherwise) of all the IACI Shares (less any
IACI Shares sold or otherwise disposed of pursuant to Section 2.2(c)) and (B)
the NBC Tax Benefit attributable to the disposition of all the IACI Shares (but
not including any NBC Tax Benefit attributable to any IACI Shares sold or
otherwise disposed of pursuant to Section 2.2(c)) at a loss for Tax purposes and
(ii) the sum of (x) the NBC Tax Costs incurred (or that would be incurred) upon
the disposition of all the IACI Shares (but not including any NBC Tax Costs
incurred upon the sale or other disposition of any IACI Shares pursuant to
Section 2.2(c)) or as a result of any declared and unpaid dividends or other
distributions on the IACI Shares and (y) the Class B Preferred Consideration.
"EXIT DATE" has the meaning set forth in Section 2.4.
"FINAL DETERMINATION" means a final determination of a
court of competent jurisdiction or a settlement as to which Vivendi has
consented (which shall not be unreasonably withheld).
"GE" has the meaning set forth in the Preamble hereto.
"GE COMPANIES" has the meaning set forth in the Preamble
hereto.
"IACI" has the meaning set forth in the Recitals hereto.
"IACI CLASS B COMMON STOCK" means Class B common stock, par
value $0.01 per share, of IACI.
"IACI COMMON STOCK" means common stock, par value $0.01 per
share, of IACI.
"IACI LITIGATION" means the Legal Proceeding involving IACI
and USANi Sub LLC (as plaintiffs) and Vivendi, USI Entertainment Inc. and VUE
(as defendants). The complaint for the IACI Litigation is attached as Exhibit A.
"IACI PREFERRED CALL" has the meaning ascribed to the term
"USAi Preferred Call" in the VUE Partnership Agreement.
"IACI PREFERRED PUT" has the meaning ascribed to the term
"USAi Preferred Put" in the VUE Partnership Agreement.
"IACI SHARES" means, collectively, 43,181,308 shares of
IACI Common Stock and 13,430,000 shares of IACI Class B Common Stock, in each
case held, directly or indirectly, by the Company or one or more of its
Affiliates (such amounts to be adjusted for any stock splits, stock dividends,
recapitalizations or other similar transactions). For purposes of this
Agreement, in the event that the IACI Shares cease to be outstanding, references
to each IACI Share in this Agreement shall refer instead to the cash or other
3
securities or property into which each such IACI Share was exchanged for or
converted into, including any successive exchange or conversion.
"IACI SHARES DIVIDEND BENEFIT AMOUNT" means, for so long as
the IACI Shares are held by NBC or any of its Affiliates, for any period,
the difference of (i) the amount of any cash dividends or other cash
distributions paid on or distributed to the holder of the IACI Shares during
such period (but only to the extent that NBC has access to such cash dividend or
cash distribution) and (ii) the NBC Tax Costs incurred (or that would be
incurred) on such dividends or other distributions.
"MARKET VALUE" has the meaning ascribed to such term in the
VUE Partnership Agreement; provided, however, that whenever the term Market
Value is used to determine an amount payable hereunder by the owner of
securities with respect to such securities, if, in connection with the payment
of such amount, such owner sold or sells such securities, the Market Value
thereof shall be equal to the proceeds (after taking into account reasonable and
customary transaction costs) received by such owner from such sale.
"MONETIZATION STRUCTURE" means a monetization structure
that provides for the monetization of the value on the twentieth anniversary of
the Closing Date (as defined in the VUE Partnership Agreement) in excess of
$40.82 on a per share basis of any of the IACI Shares (disregarding any IACI
Shares sold or otherwise disposed of pursuant to Section 2.2(c)), which per
share amount shall be adjusted for any stock splits, stock dividends,
recapitalizations or other similar transactions.
"NBC" has the meaning set forth in the Preamble hereto.
"NBC HOLDING" has the meaning set forth in the Preamble
hereto.
"NBC INDEMNITEES" means NBC and its Affiliates, and, if
applicable, their respective directors, officers, agents, employees, successors
and assigns.
"NBC SUB" has the meaning set forth in the Preamble hereto.
"NBC TAX BENEFIT" means any reduction in the Tax Liability
of NBC and its Subsidiaries, as computed under the NBC Standalone Tax
Principles.
"NBC TAX COST" means any increase in the Tax Liability of
NBC and its Subsidiaries, as computed under the NBC Standalone Tax Principles.
"PREFERRED INTERESTS" has the meaning set forth in the
Recitals hereto.
"RESTRUCTURING" means the cessation, whether by
acquisition, redemption, exchange, discharge, retirement or otherwise, of all
the Class A Preferred Interests or all the Class B Preferred Interests or all
the Common Interests, in each case beneficially owned by IACI or any of its
controlled Affiliates, to be outstanding; provided, however, that for purposes
of determining whether a Restructuring has occurred, any such interests acquired
4
by GE or any of its Affiliates shall be deemed to be no longer outstanding. For
the avoidance of doubt, for purposes of this Agreement, (i) the Common Interests
held by Xxxxxx and his assignees shall not be deemed to be Common Interests
beneficially owned by IACI or any of its controlled Affiliates, (ii) any
discussions, negotiations, understandings or arrangements regarding the
Defeasance as contemplated by the Business Combination Agreement shall not be
deemed to be negotiations regarding a Restructuring or a Restructuring, (iii) a
purchase of the Common Interests pursuant to Section 10.03(a) of the VUE
Partnership Agreement shall not be deemed to be a Restructuring and (iv) the
purchase pursuant to or in connection with the tag right pursuant to Section
10.04 of the VUE Partnership Agreement of any Common Interests shall not be
deemed to be a Restructuring.
"TAX BENEFIT" has the meaning set forth in Section 2.5(e).
"TAX LIABILITY" has the meaning ascribed to such term in
GE-NBC Universal Tax Sharing Agreement.
"TAX LITIGATION DISTRIBUTIONS" has the meaning set forth in
Section 3.1.
"TAX LITIGATION PAYMENT" has the meaning set forth in
Section 3.1.
"VIVENDI INDEMNITEES" means Vivendi and its Affiliates
(including USH3) and, if applicable, their respective directors, officers,
agents, employees, successors and assigns.
"VUE" has the meaning set forth in the Recitals hereto.
Section 1.2 Other Capitalized Terms. Capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Business Combination Agreement.
Section 1.3 Other Definitional Provisions.
(a) The words "hereof", "herein" and "hereunder" and words
of similar import, when used in this Agreement, shall refer to this Agreement as
a whole and not to any particular provision of this Agreement.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) Whenever the context so requires, gender-specific
pronouns include the neuter, masculine and feminine.
(d) The terms "DOLLARS" and "$" mean United States dollars.
(e) The term "INCLUDING" shall be deemed to be immediately
followed by the term "BUT NOT LIMITED TO".
5
(f) References to a Person include such Person and its
successors and assigns.
ARTICLE II
THE PREFERRED INTERESTS
Section 2.1 Issuance of Vivendi Secured Promissory Note;
L/C Costs.
(a) At the Closing, Vivendi shall (i) issue to NBC a
secured promissory note of Vivendi in a form reasonably acceptable to each of
the parties hereto (it being understood that (A) such note shall (I) pay
interest and have a principal equal to 94.56% of the interest and principal,
respectively, of the indebtedness incurred in connection with the Defeasance
(the "DEFEASANCE INDEBTEDNESS"), (II) have a maturity date determined by NBC
which shall not be earlier than the third anniversary of the Closing nor later
than the seventh anniversary of the Closing, (III) be subject to mandatory
pre-payment in 2006 and 2007 upon the occurrence of certain liquidity events,
(IV) be secured by that number of shares of NBC Class B Common Stock with a
value as of the Closing equal to 125% of the principal amount of such note and
(V) have provisions setting forth the effects of a Restructuring involving the
Class A Preferred Interests on such note and (B) if there is a refinancing of
the Defeasance Indebtedness after the Closing, the terms of such note and the
pledge and security agreement referred to in clause (ii) below shall be amended
to reflect any reduction in interest thereon (after taking into account the
costs and expenses of any such refinancing)) and (ii) enter into a pledge and
security agreement with NBC in a form reasonably acceptable to each of the
parties hereto.
(b) Vivendi shall, or shall cause USH3 to, reimburse,
indemnify and hold harmless, without duplication, the NBC Indemnitees from and
against 94.56% of (i) any reasonable letter of credit fees and (ii) other
reasonable and necessary costs and expenses, in each case resulting from the
transactions consummated in connection with the Defeasance.
(c) If, in any given calendar year, the Class A Tax Benefit
Amount exceeds the NBC Tax Costs incurred on the taxable income on the
treasuries acquired in connection with the Defeasance, NBC shall pay to USH3 an
amount in cash equal to such excess within ten Business Days following the
determination of such amount.
(d) Absent a change in Law or Final Determination to the
contrary, the note issued pursuant to Section 2.1(a) and the payments made
pursuant to this Section 2.1 shall be treated for tax purposes as an adjustment
to the consideration received by USH3 under the Business Combination Agreement.
6
Section 2.2 IACI Shares.
(a) From and after the Closing, subject to Article IV, if
Vivendi or any of its Affiliates or NBC or any of its Affiliates effects a
Restructuring (including pursuant to the exercise of the IACI Preferred Call or
the IACI Preferred Put) of the Class B Preferred Interests for an aggregate
consideration (the "CLASS B PREFERRED CONSIDERATION") that is less than (i) if
the Class B Preferred Consideration is payable solely in shares of IACI Common
Stock or IACI Class B Common Stock, the IACI Shares or (ii) in all other cases,
the aggregate Market Value of the IACI Shares, then concurrently with the
consummation of such Restructuring, subject to the immediately following
sentence, USH3 shall receive from NBC or its applicable Affiliate, at NBC's
election (such election to be made by written notice delivered to USH3 and
Vivendi at least three (3) Business Days prior to the consummation of such
Restructuring), either (A) the Excess Amount in cash, (B) such number of IACI
Shares having a Market Value equal to the Excess Amount or (C) any combination
of clauses (A) and (B) above (the "CLASS B PREFERRED UNWIND PAYMENT").
Notwithstanding the foregoing, if the Excess Amount is a negative amount, then
USH3 shall not be entitled to receive, and none of NBC or any of its Affiliates
shall be obligated to deliver to USH3, the Class B Preferred Unwind Payment, and
Vivendi shall, or shall cause USH3 to, pay, within ten Business Days after the
consummation of such Restructuring, to NBC, by wire transfer of immediately
available funds to an account designated by NBC, the Excess Amount (expressed as
a positive number). To the extent required in order to comply with Section 8.07
of the VUE Partnership Agreement, if the IACI Shares have been exchanged or
converted into cash prior to the purchase of the Class B Preferred Interests
pursuant to the exercise of the IACI Preferred Call or the IACI Preferred Put,
as the case may be, references to each IACI Share shall be deemed to refer
instead to such cash (plus interest accruing at an annual rate equal to IACI's
effective cost of borrowing (as determined for purposes of Section 8.07(b) of
the VUE Partnership Agreement), expressed as a percentage, as of the applicable
date on which such cash is delivered in such exchange or conversion) into which
each such IACI Share was exchanged for or converted into, including any
successive exchange or conversion. So long as there has not been a Restructuring
involving the Class B Preferred Interests, on or following the twentieth
anniversary of the Closing Date (as defined in the VUE Partnership Agreement),
NBC may cause the Company to purchase the Class B Preferred Interests pursuant
to, and in accordance with, Section 8.07 of the VUE Partnership Agreement, and
Vivendi shall consent for all purposes hereunder to such purchase.
(b) Upon the purchase of the Class B Preferred Interests
pursuant to the exercise of the IACI Preferred Call or the IACI Preferred Put,
as the case may be, and upon Vivendi's request, NBC shall cause the Company to
suspend any right to have the Class B Preferred Interests automatically redeemed
pursuant to Section 8.07(c) of the VUE Partnership Agreement, in a manner that
does not have any material and adverse impact on NBC. Following such suspension,
Vivendi and NBC agree to cooperate actively and to use their respective
reasonable best efforts to amend this Agreement and the VUE Partnership
Agreement to provide for the exchange, transfer, redemption or cancellation of
7
the Class B Preferred Interests in the most tax efficient manner to Vivendi and
NBC, provided that NBC shall not be required to agree to any amendment that
would have a material and adverse impact on NBC. NBC shall pay to USH3 the
amount of any NBC Tax Benefit realized upon such exchange, transfer, redemption
or cancellation of the Class B Preferred Interests when, as and if realized.
(c) Upon any sale or other disposition, other than in
connection with a Restructuring involving the Class B Preferred Interests, of
any or all the IACI Shares by NBC or any of its Affiliates, USH3 shall receive
from NBC an amount equal to the Market Value (plus the amount of any declared
and unpaid dividends or other distributions on such shares) of such IACI Shares,
less any NBC Tax Costs incurred (or that would be incurred) upon the disposition
of such IACI Shares or plus any NBC Tax Benefits attributable to the disposition
of such IACI Shares at a loss for Tax purposes. Notwithstanding anything to the
contrary contained in this Agreement, none of NBC and its Affiliates shall sell
or otherwise dispose of any of the IACI Shares without the prior written consent
of Vivendi, unless immediately following such sale or other disposition, NBC and
its Affiliates would continue to hold not less than 43,181,308 shares of IACI
Common Stock and 13,430,000 shares of IACI Class B Common Stock (it being
understood that, in the event of any disposition of IACI Shares when NBC or its
Affiliates holds such substitute shares, for all purposes of computing amounts
due hereunder (including computations of Tax costs and benefits) such sale of
IACI Shares and substitution of substitute shares shall be deemed not to have
occurred). GE shall indemnify and hold harmless, without duplication, the
Vivendi Indemnitees from and against any and all Losses resulting from or
arising out of such sale, other disposition or substitution.
(d) Absent a change in Law or Final Determination to the
contrary, the payments referred to in clauses (a), (b) and (c) above shall be
treated for tax purposes as an adjustment to the consideration received by USH3
under the Business Combination Agreement.
(e) An effect of this Section 2.2 is to provide USH3
(subject to and without duplication of its other rights and obligations under
this Agreement, including its rights to receive the Excess Amount upon any
Restructuring involving the Class B Preferred Interests and any payments
pursuant to Section 2.2(c)) with the right to receive (either in the form of
cash or IACI Shares, at NBC's option) an amount equal to the difference of (i)
the Market Value of all the IACI Shares and (ii) the product of (A) $40.82 and
(B) 56,611,308, on the twentieth anniversary of the Closing Date (as defined in
the VUE Partnership Agreement).
Section 2.3 Monetization of the IACI Shares. From and after
the Closing, upon receipt of a written request from Vivendi, for a period of 180
days following receipt of such request, NBC shall use its reasonable best
efforts, or shall cause one of its Affiliates to use its reasonable best
efforts, to implement the Monetization Structure (it being understood that NBC
shall have no obligation to implement any transaction or take any steps that
would, after giving effect to any contemporaneous offsetting benefits (including
8
Vivendi's tax indemnification obligations), reasonably be expected to place GE
in a less favorable tax or accounting position than that currently anticipated
by GE from the transactions contemplated by this Agreement, the Business
Combination Agreement and the other Ancillary Agreements or otherwise to have a
significant adverse impact on GE, NBC or their controlled Affiliates that would
not otherwise exist but for the implementation of the Monetization Structure).
If NBC asserts that any such adverse impact would result, Vivendi shall have the
right to direct NBC or its applicable Affiliate not to consummate the
Monetization Structure. The Monetization Structure shall be provided by Vivendi
to NBC and shall be reasonably acceptable to NBC. USH3 shall receive any and all
of the proceeds from the consummation of the Monetization Structure. Vivendi
shall, or shall cause USH3 to, indemnify and hold harmless, without duplication,
the NBC Indemnitees from and against any and all Losses resulting from or
arising out of the implementation of the Monetization Structure. Concurrent with
the consummation of the implementation of the Monetization Structure, Vivendi
shall, or shall cause USH3 to, deliver to NBC or its applicable Affiliate
sufficient collateral, the form and amount of which to be mutually and
reasonably agreed upon by NBC and Vivendi, to secure Vivendi's obligation to
reimburse, indemnify and hold harmless, without duplication, the NBC Indemnitees
for NBC Tax Costs incurred (or that would be incurred) as a result of (i) the
disposition of all the IACI Shares (disregarding any IACI Shares sold or
otherwise disposed of pursuant to Section 2.2(c)) or (ii) any Monetization
Structure (or related transaction) entered into pursuant to this Section 2.3.
Section 2.4 3.6% Cash Dividends on the Class B Preferred
Interests. Subject to the last sentence of this Section 2.4, from and after the
date on which Vivendi beneficially owns less than 3% of the capital stock of NBC
(the "EXIT DATE"), commencing on the last Business Day of the calendar quarter
in which the Exit Date occurs (or the Exit Date if the Exit Date is the last
Business Day of a calendar quarter) and thereafter in accordance with the VUE
Partnership Agreement, Vivendi shall, or shall cause USH3 to, pay NBC an amount
(each, a "CASH DIVIDEND AMOUNT") equal to the product of (a) 0.9456 and (b) the
difference (the "CASH DIVIDEND DETERMINATION AMOUNT") of, for any quarterly
period, including the quarterly period in which the Exit Date occurs, (i) the
cumulative preferential distributions payable to the holders of the Class B
Preferred Interests pursuant to Section 8.01(a) of the VUE Partnership Agreement
and (ii) the sum of (A) the Class B Tax Benefit Amount and (B) the IACI Shares
Dividend Benefit Amount. If a Cash Dividend Amount is a negative number, then
Vivendi shall not be obligated to make a payment on the applicable Business Day
pursuant to this Section 2.4, and such amount (expressed as a positive number)
(each, a "NBC PAYMENT AMOUNT") shall be carried forward and credited against the
next payment due hereunder. Upon the consummation of a Restructuring involving
the Class B Preferred Interests, any NBC Payment Amount that has been carried
forward shall be paid to USH3 by NBC or one of its Affiliates. Any NBC Payment
Amount carried forward shall accrue interest at an annual rate equal to
Vivendi's effective cost of bank borrowing from and including the date that such
NBC Payment Amount is carried forward until, but excluding, the date that such
NBC Payment Amount is credited against a payment to NBC due hereunder or paid to
USH3, as the case may be. Absent a change in Law or Final Determination to the
9
contrary, any of the payments referred to in this Section 2.4 shall be treated
for tax purposes as an adjustment to the consideration received by USH3 under
the Business Combination Agreement. The parties agree to cooperate and use their
reasonable efforts to restructure the payments contemplated by this Section 2.4
to be made after the Exit Date if they are able to do so in a manner that would
not reasonably be expected to impose incremental costs on Vivendi and that has a
more satisfactory result for GE and NBC. The payments contemplated by this
Section 2.4 shall cease on the twentieth anniversary of the Closing Date (as
defined in the VUE Partnership Agreement), except (i) with respect to any NBC
Payment Amounts or Cash Dividend Amounts that relate to periods or partial
periods prior thereto or (ii) if on such anniversary (or, if such anniversary is
not a Business Day, the immediately following Business Day after such
anniversary), NBC or its Affiliates shall have caused and shall be causing the
Company to use its best efforts to purchase the Class B Preferred Interests
pursuant to, and in accordance with, Section 8.07 of the VUE Partnership
Agreement. Following the cessation of the payments of the Cash Dividend Amounts
or the NBC Payment Amounts, as the case may be, in accordance with this Section
2.4, for so long as the Class B Preferred Interests have not been Restructured,
NBC shall pay to USH3 any IACI Shares Dividend Benefit Amounts as, if and when
realized.
Section 2.5 Tax Assumptions and Indemnity.
(a) Assumptions. In entering into this Agreement, the
parties hereto have assumed that: (i) taxable income of VUE equal to the
accretion in the Face Value (as defined in the VUE Partnership Agreement) of the
Preferred Interests for any period plus the preferential cash distribution
payable pursuant to Section 8.01(a) of the VUE Partnership Agreement on the
Preferred Interests for such period will be allocated to the holder(s) of the
Preferred Interests for such period in respect of such Preferred Interests (and
the amount of taxable income of VUE allocated to the holders of the Common
Interests for such period in respect of such Common Interests will be reduced by
the same amount); and (ii) neither NBC nor any of its Affiliates will realize
any taxable income as a result of the issuance of the note pursuant to Section
2.1(a) or any payment made pursuant to Section 2.1, 2.2(a) or 2.4 (and each such
issuance and payment will be treated as a purchase price adjustment) or the
creation of any of the rights and obligations set forth in this Article II.
Except to the extent required by a change in Law or Final Determination, the
parties hereto shall prepare their Tax returns in a manner consistent with these
assumptions.
(b) Indemnity. Vivendi shall reimburse, indemnify and hold
harmless the NBC Indemnitees for, from and against any NBC Tax Costs and related
Losses resulting from or arising out of or relating to any of the following: (i)
holding the IACI Shares, including by virtue of any dividends or other earnings
on the IACI Shares, except to the extent taken into account under the definition
of IACI Share Dividend Benefit Amount or otherwise, (ii) any disposition or
deemed disposition of the IACI Shares (other than a disposition governed by
Section 2.2(a) or disposition governed by Section 2.2(c)), (iii) the redemption
of any of the Preferred Interests pursuant to the terms of the VUE Partnership
Agreement, (iv) any other Restructuring involving any of the Preferred
10
Interests, or any directly related transaction, entered into pursuant to Article
IV (other than a Restructuring governed by Section 2.2(a)), (v) any Monetization
Structure (or related transaction entered into pursuant to Section 2.3), (vi)
any amendment to this Agreement made at Vivendi's direction, (vi) any Final
Determination or change in Law that results in any assumption set forth in
Section 2.5(a) not having been correct or no longer being correct and (vii) the
excess (if any) of the NBC Tax Costs incurred for any given year on the taxable
income on the treasuries acquired in connection with the Defeasance over the
Class A Tax Benefit Amount for such year.
(c) Cooperation. In the event that there is a Final
Determination or change in Law that results in any assumption set forth in
Section 2.5(a) no longer being correct, the parties hereto shall cooperate and
use their reasonable efforts to restructure the arrangements if they are able to
do so in a manner that does not have a material and adverse impact on GE, NBC or
Vivendi.
(d) No Duplicative Payments. For the avoidance of doubt,
Vivendi shall not be required to reimburse, indemnify and hold harmless under
Section 2.5(b) the NBC Indemnitees for any NBC Tax Costs that have already been
taken into account in computing the payments required to be made under this
Agreement. It is the intention of the parties that NBC Tax Costs and NBC Tax
Benefits be taken into account only once in determining the payments required by
this Agreement and, in the event that this Agreement could be read to require
that an NBC Tax Cost or NBC Tax Benefit be taken into account more than once,
the parties will take such steps and make such adjustments as may be necessary
to prevent such result.
(e) Tax Gross-Up and Tax Benefits. To the extent provided
herein, the amount of any Loss (including, for purposes of this Section 2.5(e),
any NBC Tax Costs) that gives rise to an indemnification payment pursuant to
this Agreement shall be (without duplication) (i) increased by any Taxes
incurred by any NBC Indemnitee or any Vivendi Indemnitee, as the case may be, as
a result of the receipt of such indemnification payment (as increased pursuant
to this Section 2.5(e)) and (ii) reduced to the extent provided in this Section
2.5(e) by any decrease in Taxes as a result of a Tax deduction or credit (a "TAX
BENEFIT") actually realized by the NBC Indemnitee or the Vivendi Indemnitee, as
the case may be, as a result of the event giving rise to such indemnification
payment. If any such Tax Benefit is actually realized before the date of an
indemnification payment, such indemnification payment shall be reduced to take
into the account the reduction in the relevant Loss as a result of such Tax
Benefit. If such Tax Benefit is actually realized after the date of an
indemnification payment but before the end of the fifth year following the year
in which the relevant Loss occurred, the NBC Indemnitee or the Vivendi
Indemnitee, as the case may be, shall promptly after such Tax Benefit is
actually realized make a payment to the indemnifying party to take into account
the reduction in the relevant Loss as a result of such Tax Benefit, such
payments by an NBC Indemnitee or a Vivendi Indemnitee, as the case may be, not
to exceed the indemnification payments previously received by such NBC
Indemnitee or such Vivendi Indemnitee, as the case may be, from the indemnifying
party in respect of such Loss. A Tax Benefit that results from an event giving
11
rise to the indemnification payment shall be considered actually realized by an
NBC Indemnitee or a Vivendi Indemnitee, as the case may be, only to the extent
that, but for such Tax Benefit, such NBC Indemnitee's or such Vivendi
Indemnitee's, as the case may be, Tax Liability would be higher than it is with
such Tax Benefit (e.g., deductions, credits, or losses, of the NBC Indemnitee or
the Vivendi Indemnitee, as the case may be, that do not result from the event
giving rise to the indemnity payment shall be deemed to be used prior to the use
of any deduction, credit or loss that does result from the event giving rise to
the indemnification payment). The amount of any increase, reduction or payment
hereunder shall be adjusted to reflect any Final Determination with respect to
any Tax item of the NBC Indemnitees or the Vivendi Indemnitees, as the case may
be, and if necessary, payments shall be made between the parties to this
Agreement to reflect such adjustment. In the case of the NBC Indemnitees, this
Section 2.5(e) shall be applied using the NBC Standalone Tax Principles. For the
avoidance of doubt, this Section 2.5(e) shall not apply to any payment made
pursuant to this Agreement to any Vivendi Indemnitee (other than an
indemnification payment made under Section 2.2(c)).
(f) Computation of NBC Tax Costs and NBC Tax Benefits. The
amount of any NBC Tax Cost and any NBC Tax Benefit shall be adjusted to reflect
any adjustment in its computation (including one required by a taxing authority)
and, if necessary, payments shall be made between the parties to this Agreement
to reflect such adjustment. NBC will provide Vivendi with backup information
explaining the calculation of any NBC Tax Cost and any NBC Tax Benefit. For the
avoidance of doubt, in determining whether an item or event gives rise to an NBC
Tax Benefit that would be for the account of USH3 under the terms of this
Agreement, any deductions, credits, or losses of NBC or its Subsidiaries that do
not result from such item or event shall be deemed to be used prior to the use
of any deduction, credit or loss that does result from such item or event. In
the event that an item or event could give rise to an NBC Tax Benefit which
would be for the account of USH3 under the terms of this Agreement but does not
in fact give rise to a current NBC Tax Benefit, then NBC shall pay USH3 once the
item or event does give rise to a current NBC Tax Benefit.
Section 2.6 Transfers of the Preferred Interests and the
Common Interests. Subject to Article IV, the General Partner (as defined in the
VUE Partnership Agreement) shall (to the extent it can do so without liability)
withhold consent to a Transfer (as defined in the VUE Partnership Agreement)
pursuant to Section 10.01 of the VUE Partnership Agreement without the prior
written consent of Vivendi of any of the Class A Preferred Interests, Class B
Preferred Interests or Common Interests beneficially owned by IACI and its
controlled Affiliates. After the Closing, NBC shall cause the General Partner to
consent to a Transfer pursuant to Section 10.01 of the VUE Partnership Agreement
in connection with any Restructuring involving the Class A Preferred Interests,
Class B Preferred Interests or the Common Interests so long as any such
Restructuring is effected in accordance with Article IV.
Section 2.7 VUE Documents. Nothing in this Agreement shall
obligate any of the parties hereto to take any action that would violate any
provision of the VUE Documents.
12
ARTICLE III
THE IACI LITIGATION
Section 3.1 Tax Litigation Distributions. If amounts are
distributed by VUE in respect of tax distributions to the plaintiffs in the IACI
Litigation (the "TAX LITIGATION DISTRIBUTIONS") with respect to the Class A
Preferred Interests or the Class B Preferred Interests pursuant to (a) a final
judgment or award rendered by a Governmental Authority of competent jurisdiction
(in each case after the expiration of the time in which to appeal therefrom) or
(b) a settlement or other mutually binding agreement entered into with the prior
written consent of Vivendi, then Vivendi shall, or shall cause USH3 to, pay NBC
an amount equal to the product of (i) 0.9456 and (ii) the Tax Litigation
Distributions distributed by VUE (the "TAX LITIGATION Payment"). Vivendi shall
also, or shall cause USH3 to, indemnify and hold harmless, without duplication,
the NBC Indemnitees from and against any and all other Losses resulting from or
arising out of the IACI Litigation. Vivendi shall also, or shall cause USH3 to,
pay the NBC Indemnitees an amount equal to the NBC Tax Costs incurred upon the
receipt of the Tax Litigation Payment and the receipt of the other payments
pursuant to this Section 3.1 (including the additional payment for NBC Tax
Costs) in a manner that shall make the outcome of the IACI Litigation tax
neutral to NBC. Following the rendering of such final judgment or award or the
entering into of such settlement or other mutually binding agreement, the
parties hereto agree to cooperate actively and to use their respective
reasonable best efforts to amend this Agreement to provide for the Tax
Litigation Payment and any other indemnity payments to be made hereunder to be
paid to NBC by Vivendi in the most tax efficient manner to Vivendi and NBC,
provided that NBC shall not be required to agree to any amendment that would
have a material and adverse impact on NBC.
Section 3.2 Right to Control IACI Litigation. Vivendi and
its Affiliates shall have the exclusive right to control, subject to
consultation with NBC with respect to any material matters relating to the IACI
Litigation, but at Vivendi's own expense, the IACI Litigation. NBC agrees that
it shall cooperate fully, and shall cause each of the Target Companies to fully
cooperate, with Vivendi, its Affiliates and their respective counsel in the
defense against or compromise of any claim in the IACI Litigation. Vivendi shall
keep NBC advised of the status of the IACI Litigation, shall consult with NBC
regarding a settlement or other mutually binding agreement with respect to the
IACI Litigation and shall use its reasonable efforts to structure such
settlement or other binding agreement if it is able to do so in a manner that
does not have an adverse accounting impact (taking into account the payment and
indemnity obligations of Vivendi under Section 3.1) on NBC or VUE (it being
understood that Vivendi shall not be obligated by this Section 3.2 to agree to a
result in the IACI Litigation that increases Vivendi's cost).
13
ARTICLE IV
RESTRUCTURING ARRANGEMENTS
Section 4.1 IACI Restructuring.
(a) At any time after the date hereof, subject to this
Article IV (including the requirements of subparagraph (d) hereof), upon notice
to NBC, Vivendi or any of its Affiliates shall have the right to negotiate and
consummate, without the consent of GE or any of its Affiliates, a Restructuring
involving the Class A Preferred Interests, provided that Vivendi shall (i)
consult with GE concerning plans for and the terms of any such Restructuring,
(ii) provide GE with copies of all material notices and documents regarding such
Restructuring, (iii) use its reasonable best efforts to include GE and its
representatives in any scheduled negotiations and meetings and (iv) otherwise
keep GE advised of the status of such negotiations; provided further, however,
that after the Closing, none of Vivendi and its Affiliates shall consummate (A)
a Restructuring involving the Class A Preferred Interests or (B) an acquisition,
redemption, exchange, discharge or retirement of any of the Class A Preferred
Interests, in each case without the prior written consent of GE (such consent
not to be unreasonably withheld). At any time prior to the Closing, except as
provided for in clause (iii) above, none of GE and its Affiliates shall,
directly or indirectly, enter into any discussions, negotiations, arrangements,
understandings or agreements (whether written or oral) with any of IACI and its
Affiliates (including Xxxxxx) or any of their respective advisors, agents or
representatives regarding a Restructuring involving the Class A Preferred
Interests or an acquisition, redemption, exchange, discharge or retirement of
any of the Class A Preferred Interests. Subject to this Article IV, at any time
after the Closing, upon notice to Vivendi, GE or any of its Affiliates shall
have the right to negotiate a Restructuring involving the Class A Preferred
Interests, provided that GE shall (I) consult with Vivendi concerning plans for
and the terms of any such Restructuring, (II) provide Vivendi with copies of all
material notices and documents regarding such Restructuring, (III) use its
reasonable best efforts to include Vivendi and its representatives in any
scheduled negotiations and meetings and (IV) otherwise keep Vivendi advised of
the status of such negotiations. Notwithstanding the foregoing, none of GE and
its Affiliates shall consummate (x) a Restructuring involving the Class A
Preferred Interests or (y) an acquisition, redemption, exchange, discharge or
retirement of any of the Class A Preferred Interests, in each case without the
prior written consent of Vivendi (such consent not to be unreasonably withheld).
(b) At any time after the date hereof until immediately
prior to the purchase of the Class B Preferred Interests pursuant to an exercise
of the IACI Preferred Call or the IACI Preferred Put, as the case may be,
subject to this Article IV (including the requirements of subparagraph (d)
hereof), upon notice to NBC, Vivendi or any of its Affiliates shall have the
right to negotiate and consummate, without the consent of GE or any of its
Affiliates, a Restructuring involving the Class B Preferred Interests, provided
that Vivendi shall (i) consult with GE concerning plans for and the terms of any
such Restructuring, (ii) provide GE with copies of all material notices and
14
documents regarding such Restructuring, (iii) use its reasonable best efforts to
include GE and its representatives in any scheduled negotiations and meetings
and (iv) otherwise keep GE advised of the status of such negotiations; provided
further, however, that after the Closing, none of Vivendi and its Affiliates
shall consummate (A) a Restructuring involving the Class B Preferred Interests
or (B) an acquisition, redemption, exchange, discharge or retirement of any of
the Class B Preferred Interests, in each case without the prior written consent
of GE (such consent not to be unreasonably withheld). At any time prior to the
Closing, except as provided for in clause (iii) above, none of GE and its
Affiliates shall, directly or indirectly, enter into any discussions,
negotiations, arrangements, understandings or agreements (whether written or
oral) with any of IACI and its Affiliates (including Xxxxxx) or any of their
respective advisors, agents or representatives regarding a Restructuring
involving the Class B Preferred Interests or an acquisition, redemption,
exchange, discharge or retirement of any of the Class B Preferred Interests.
Subject to this Article IV, at any time after the Closing, upon notice to
Vivendi, GE or any of its Affiliates shall have the right to negotiate a
Restructuring involving the Class B Preferred Interests, provided that GE shall
(I) consult with Vivendi concerning plans for and the terms of any such
Restructuring, (II) provide Vivendi with copies of all material notices and
documents regarding such Restructuring, (III) use its reasonable best efforts to
include Vivendi and its representatives in any scheduled negotiations and
meetings and (IV) otherwise keep Vivendi advised of the status of such
negotiations. Notwithstanding the foregoing, none of GE and its Affiliates shall
consummate (x) a Restructuring involving the Class B Preferred Interests or (y)
an acquisition, redemption, exchange, discharge or retirement of any of the
Class B Preferred Interests, in each case without the prior written consent of
Vivendi (such consent not to be unreasonably withheld).
(c) In any negotiation with IACI or any of its Affiliates
regarding a Restructuring, Vivendi shall use its reasonable best efforts to
negotiate and consummate such Restructuring in a manner that eliminates (or
modifies in a manner reasonably satisfactory to GE) the arms length covenant
contained in Section 6.06 of the VUE Partnership Agreement (the "AFFILIATE
TRANSACTION COVENANT") and so that such Restructuring involves all the Common
Interests and the Preferred Interests.
(d) At Vivendi's request, GE and its Affiliates shall
actively cooperate in, and shall use their reasonable best efforts to help
conclude, (i) (A) prior to the Closing, any Restructuring involving any of the
Preferred Interests if such Restructuring eliminates (or modifies in a manner
reasonably satisfactory to GE) the covenants contained in Sections 5.05(a)(ii),
(iii) and (iv) of the VUE Partnership Agreement or (B) at any time after the
Closing, any Restructuring involving any of the Preferred Interests or (ii) any
Restructuring involving the Common Interests if such Restructuring eliminates
(or modifies in a manner reasonably satisfactory to GE) the Affiliate
Transaction Covenant; provided, however, that GE and its Affiliates shall have
no obligation to cooperate with or help conclude, and Vivendi may not
consummate, any Restructuring (i) that would reasonably be expected to cause an
Aggregate Adverse Effect or (ii) if, prior to the Closing, the form and amount
of consideration that would be payable pursuant to a Restructuring involving the
15
Common Interests exceeds $516 million in cash (it being understood that Vivendi
(A) may supplement such consideration by agreeing to provide a portion of its or
its Affiliates' common equity in NBC or other consideration payable by Vivendi
or (B) may substitute in lieu of such cash, or a portion thereof (in which case
Vivendi shall be entitled to receive such cash or portion thereof), an
equivalent amount of its or its Affiliates' common equity in NBC or other
consideration payable by Vivendi, in each case without causing this requirement
to be deemed unsatisfied).
(e) If any of Vivendi, GE or their respective Affiliates is
able to consummate in accordance with this Agreement a Restructuring involving
any of the Preferred Interests, Vivendi shall bear the costs and burdens
(including any indemnification obligations pursuant to Section 7.02(b)(ii) of
the VUE Transaction Agreement) and receive the benefits of such Restructuring.
(f) If any of Vivendi, GE or any of their respective
Affiliates is able to consummate a Restructuring involving the Common Interests,
NBC or one of its controlled Affiliates shall pay (in cash or an alternative
form of consideration, other than common equity) the consideration payable to
IACI or any of its controlled Affiliates in such Restructuring.
(g) In the event that Vivendi or any of its Affiliates
enters into any discussions, negotiations, understandings or arrangements
regarding a Restructuring involving the Common Interests, Vivendi shall (i)
consult with GE concerning plans for and the terms of any such Restructuring,
(ii) provide GE with copies of all material notices and documents regarding such
Restructuring, (iii) use its reasonable best efforts to include GE and its
representatives in any scheduled discussions or negotiations and (iv) otherwise
keep GE advised of the status of such discussions, negotiations, understandings
or arrangements. Subject to Section 4.1(d), prior to or at the Closing, Vivendi
may consummate a Restructuring of the Common Interests without the consent of GE
or any of its Affiliates. Notwithstanding the foregoing, after the Closing, none
of Vivendi and its Affiliates shall consummate (A) a Restructuring involving the
Common Interests or (B) an acquisition, redemption, exchange, discharge or
retirement of any of the Common Interests, in each case without the prior
written consent of GE (such consent not to be unreasonably withheld).
(h) At any time prior to the Closing, except as provided in
Section 4.1(g)(iii), none of GE and its Affiliates shall, directly or
indirectly, enter into any discussions, negotiations, arrangements,
understandings or agreements (whether written or oral) with any of IACI and its
Affiliates (including Xxxxxx) or any of their respective advisors, agents or
representatives regarding a Restructuring involving the Common Interests or an
acquisition, redemption, exchange, discharge or retirement of any of the Common
Interests. Subject to this Article IV, after the Closing, in the event that GE
or any of its Affiliates enters into any discussions, negotiations,
understandings or arrangements regarding a Restructuring involving the Common
Interests, GE shall (i) consult with Vivendi concerning plans for and the terms
of any such Restructuring, (ii) provide Vivendi with copies of all material
16
notices and documents regarding such Restructuring, (iii) use its reasonable
best efforts to include Vivendi and its representatives in any scheduled
discussions or negotiations and (iv) otherwise keep Vivendi advised of the
status of such discussions, negotiations, understandings or arrangements.
Notwithstanding the foregoing, none of GE and its Affiliates shall consummate
(i) a Restructuring involving the Common Interests or (ii) an acquisition,
redemption, exchange, discharge or retirement of any of the Common Interests, in
each case without the prior written consent of Vivendi (such consent not to be
unreasonably withheld); provided, however, that after the Closing, GE or any of
its Affiliates may consummate a Restructuring involving the Common Interests
without the consent of Vivendi or any of its Affiliates so long as such
Restructuring would not reasonably be expected to have an adverse impact on the
ability of Vivendi to continue to equity account under French GAAP and IFRS for
its ownership interest in NBC.
(i) For so long as any of the Preferred Interests have not
been Restructured, in any negotiation with IACI or any of its Affiliates
regarding a Restructuring, GE and its Affiliates shall use their reasonable best
efforts to negotiate and consummate such Restructuring so that such
Restructuring involves all the Common Interests and the remaining Preferred
Interests.
(j) The parties hereto acknowledge that in the event GE (i)
is requested to cooperate and help conclude a Restructuring involving the Common
Interests pursuant to Section 4.1(d) or (ii) is asked to consent to a
Restructuring involving the Common Interests pursuant to Section 4.1(g), in each
case that is a part of a simultaneous or otherwise mutually dependent
Restructuring involving the Preferred Interests and in which (A) the
consideration payable for the Common Interests exceeds $516,000,000 and (B) GE
reasonably determines that a portion of such consideration in excess of
$516,000,000 is properly allocable to the Preferred Interests, GE may condition
its consent thereto on a reallocation of such portion (it being understood that
Vivendi shall have the right thereafter to amend, withdraw or terminate the
Restructuring involving the Common Interests).
Section 4.2 Effect of an IACI Restructuring. If any
Restructuring involving any of the Class A Preferred Interests, the Class B
Preferred Interests or the Common Interests is consummated prior to or at the
Closing, the parties hereto shall make appropriate amendments to each of the
Business Combination Agreement, this Agreement and the other Ancillary
Agreements to reflect such Restructuring.
Section 4.3 Indemnity. Vivendi shall reimburse, indemnify
and hold harmless the NBC Indemnitees for, from and against any Losses resulting
from or arising out of or relating to any Liability resulting from (a) any
breach of Section 2.07, 3.01(c), 5.05(a)(i), 5.05(a)(v), 5.05(a)(vi) or 5.05(b)
of the VUE Partnership Agreement or of the VUE Film Securitization Consent
Letter, or (b) an action that would be a breach of Section 5.05(b) of the VUE
Partnership Agreement but for an election made by Vivendi pursuant to Section
7.02(b)(ii) of the VUE Transaction Agreement that any of the covenants set forth
in Section 5.05(b) of the VUE Partnership Agreement shall not apply, to the
17
extent such breach results from an action (or such action is) contemplated by or
taken pursuant to this Agreement. The proceeding sentence shall not apply in the
case of an action by GE or NBC that is contemplated by or taken pursuant to this
Agreement with respect to any Common Interest held by IACI or any of its
Affiliates, unless such action was taken at the request of Vivendi.
ARTICLE V
TERMINATION
Section 5.1 Termination. This Agreement shall terminate and
the transactions contemplated hereby shall be abandoned:
(a) if the Business Combination Agreement is terminated
pursuant to Section 9.1 thereof or
(b) upon the mutual written consent of Vivendi and GE.
Section 5.2 Effect of Termination.
(a) In the event of the termination of this Agreement in
accordance with Section 5.1, this Agreement shall thereafter become void and
have no effect, and no party hereto shall have any Liability to any other party
hereto or its Affiliates, directors, officers or employees, except that (i) the
obligations of the parties hereto contained in Article III, in this Section
5.2(a) and in Article VI (other than Sections 6.8 and 6.10) and any indemnity
obligations that have accrued prior to such termination shall survive such
termination and (ii) nothing herein will relieve any party from Liability for
any breach of this Agreement.
(b) In the event this Agreement shall be terminated and at
such time any party is in material breach of or in default under any term or
provision hereof, such termination shall be without prejudice to, and shall not
affect, any and all rights to damages that any other party may have hereunder or
otherwise under applicable Law.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of New York
applicable to agreements to be performed entirely within such state, including
all matters of construction, validity and performance, without regard to
principles of conflicts of law thereof.
Section 6.2 Notices. All notices, requests, permissions,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given (a) five (5) Business Days following sending by
18
registered or certified mail, postage prepaid, (b) when sent, if sent
electronically or by facsimile, during the normal business hours on any Business
Day of the recipient, or one Business Day after the date sent, if sent
electronically or by facsimile, after the normal business hours of the
recipient, provided that the electronic message is promptly confirmed by
facsimile confirmation thereof and the sending party receives written
confirmation that the facsimile has been successfully transmitted in its
entirety to the intended recipient, (c) when delivered, if delivered personally
to the intended recipient and (d) one (1) Business Day following sending by
overnight delivery via a national courier service (two (2) Business Days
following sending by overnight international delivery via international courier
service), in each case addressed to a party at the following address for such
party:
To Vivendi or USH3:
Vivendi Universal, S.A.
00 xxxxxx xx Xxxxxxxxx
00000 Xxxxx cedex 08
France
Attention: General Counsel
Facsimile: 00-0-00-00-00-00
and
Vivendi Universal, S.A.
000 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: 212-572-8898
With a copy to (which shall not constitute notice):
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxx, Esq.
Facsimile: 000-000-0000
To any of the GE Companies:
General Electric Company
0000 Xxxxxx Xxxxxxxx, X0
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President and Senior Counsel
for Transactions
Facsimile: 000-000-0000
19
With a copy to (which shall not constitute notice):
National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Executive Vice President
and General Counsel
Facsimile: 000-000-0000
With a copy to (which shall not constitute notice):
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxx Xxxx, Esq.
Facsimile: 000-000-0000
Such names and addresses may be changed by notice given in
accordance with this Section 6.2.
Section 6.3 Entire Agreement. This Agreement, the Business
Combination Agreement, the Confidentiality Agreement and the other Ancillary
Agreements contain the entire understanding of the parties hereto and thereto
with respect to the subject matters contained herein and therein, supersede and
cancel all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject matter.
There are no restrictions, promises, representations, warranties, agreements or
undertakings of any party hereto with respect to the transactions contemplated
by this Agreement, other than those set forth herein or in the Business
Combination Agreement, the Confidentiality Agreement or the other Ancillary
Agreements or in any other document required to be executed and delivered
hereunder or thereunder.
Section 6.4 Purposes; Resolution of Ambiguities. The
parties acknowledge that the definition of IACI Shares in this Agreement and the
use of the term "USAi Common Shares" in Section 8.07 of the VUE Partnership
Agreement leave some ambiguity as to the nature and value of the securities
required to be delivered to IACI upon a put or call of the Class B Preferred
Interests in accordance with Section 8.07 of the VUE Partnership Agreement if a
conversion, exchange or similar transaction involving the IACI Shares has been
consummated prior to the purchase of the Class B Preferred Interests pursuant to
such put or call. The parties further acknowledge and agree that the purpose of
the provisions of this Agreement relating to the Class B Preferred Interests and
the IACI Shares is to obligate Vivendi and USH3 to bear the tax and economic
costs and to entitle Vivendi and USH3 to receive the tax and economic benefits,
in each case associated with such securities and that they will take such steps
20
and make such adjustments as may be necessary to prevent such definitional and
other ambiguities from leading to a different result.
Section 6.5 Amendment; Waiver. This Agreement can be
amended, supplemented or changed, and any provision hereof can be waived, only
by a written instrument making specific reference to this Agreement signed by
the party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
covenant or agreement contained herein. Any of the parties hereto may: (a)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto or (b) waive compliance by the other party with any of
the agreements contained herein. Any such extension or waiver shall be valid
only if set forth in a written instrument. The failure of a party to assert any
of its rights hereunder shall not constitute a waiver of such rights nor in any
way affect the validity of this Agreement or any part hereof or the right of
such party thereafter to enforce each and every provision of this Agreement. No
waiver of any breach of or non-compliance with this Agreement shall be held to
be a waiver of any other or subsequent breach or non-compliance.
Section 6.6 Headings; References. The article, section and
paragraph headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
All references herein to "Articles", "Sections" or "Exhibits" shall be deemed to
be references to Articles or Sections hereof or Exhibits hereto, unless
otherwise indicated.
Section 6.7 Counterparts. This Agreement may be executed in
multiple counterparts (including via facsimile), and each counterpart shall be
deemed to be an original, but all of which shall constitute one and the same
original.
Section 6.8 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any of the
parties hereto without the prior written consent of the other parties (which
consent shall not be unreasonably withheld); provided, however, that (a) Vivendi
and USH3 may assign their rights, interests or obligations in whole or in part
to any successor to all or substantially all of Vivendi's entertainment business
and (b) USH3 may assign its rights, interests or obligations in whole or in part
to any successor, transferee or assignee of all or substantially all of USH3's
shares of NBC Class B Common Stock, in each case without the consent of any of
the other parties hereto (it being understood that no such assignment shall,
without the consent of NBC, relieve the transferor of any liability hereunder).
This Agreement shall be binding on the parties hereto and their respective
successors and permitted assigns.
Section 6.9 Severability; Enforcement. The invalidity of
any portion of this Agreement shall not affect the validity, force or effect of
the remaining portions hereof. If it is ever held that any restriction hereunder
is too broad to permit enforcement of such restriction to its fullest extent,
21
each party agrees that a court of competent jurisdiction may enforce such
restriction to the maximum extent permitted by Law, and each party hereby
consents and agrees that such scope may be judicially modified accordingly in
any proceeding brought to enforce such restriction.
Section 6.10 Specific Performance. The parties hereto agree
that the remedy at Law for any breach of this Agreement will be inadequate and
that any party by whom this Agreement is enforceable shall be entitled to
specific performance in addition to any other appropriate relief or remedy. Such
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable Law, each party waives any
objection to the imposition of such relief.
Section 6.11 Jurisdiction; Waiver of Jury Trial.
(a) Each party to this Agreement hereby irrevocably agrees
that any Legal Proceeding arising out of or relating to this Agreement shall be
brought in the United States District Court for the Southern District of New
York or any Supreme Court of the State of New York, New York County and each
party hereto agrees not to assert, by way of motion, as a defense or otherwise,
in any such action, suit or proceeding any claim that it is not subject
personally to the jurisdiction of such court, that the action, suit or
proceeding is brought in an inconvenient forum, that the venue of the action,
suit or proceeding is improper or that this Agreement, or the subject matter
hereof may not be enforced in or by such court. Each party hereto further and
irrevocably submits to the jurisdiction of such court in any action, suit or
proceeding.
(b) Each party to this Agreement irrevocably and
unconditionally waives, to the fullest extent permitted by applicable Law, any
right that such party may have to a trial by jury of any claim or cause of
action directly or indirectly based upon or arising out of this Agreement or any
of the transactions contemplated herein.
Section 6.12 Mediation. Prior to commencing legal action
with respect to any disagreement, dispute, controversy or claim arising out of
or relating to this Agreement or the interpretation hereof, or any arrangements
relating hereto or contemplated herein or the breach, termination or invalidity
hereof (collectively, "DISPUTES"), a party will notify the other party in
writing of any such Dispute (a "DISPUTE NOTICE"). Following receipt of a Dispute
Notice by a party, the parties shall jointly appoint a mediator and shall
attempt in good faith to resolve any Dispute promptly by confidential mediation
pursuant to the then current mediation procedures of the CPR Institute for
Dispute Resolution (the "CPR"). If the parties cannot agree upon a mediator
within five (5) days of receipt of the Dispute Notice by a party, the parties
will ask the CPR to appoint a mediator promptly. If the Dispute is not resolved
for any reason within thirty (30) days of the Dispute Notice (unless the period
of time is extended by the parties in writing), either party may commence legal
action in accordance with the other provisions hereof. Nothing contained in this
Section 6.12 shall preclude a party from seeking injunctive relief if the
22
prerequisites to obtaining injunctive relief, including irreparable harm, are
otherwise satisfied.
Section 6.13 Fees and Expenses. Except as expressly
otherwise contemplated by this Agreement, each of the parties hereto shall pay
the fees and expenses of its counsel, accountants, financial advisors and other
experts and shall pay all other costs and expenses incurred by it in connection
with the negotiation, preparation and execution of this Agreement and the
consummation of the transactions contemplated hereby.
[Signature Page Follows]
23
IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this Agreement as of the date first above written.
GENERAL ELECTRIC COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice-Chairman
NATIONAL BROADCASTING COMPANY HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
NATIONAL BROADCASTING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
UNIVERSAL STUDIOS HOLDING III CORP.
By: /s/ Xxxxxx X. Xxxxxxxx III
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx III
Title: President
VIVENDI UNIVERSAL, S.A.
By: /s/ Xxxx-Xxxxxxx Xxxx
-----------------------------------------
Name: Xxxx-Xxxxxxx Xxxx
Title: Chief Operating Officer
