INDEMNITY
This Indemnity (this "Indemnity") is made as of March 6, 2003, by
Vivendi Universal Entertainment LLLP, a Delaware limited liability limited
partnership ("VUE"), in favor of Universal City Development Partners, Ltd., a
Florida limited partnership ("UCDP"). All capitalized terms used but not defined
herein shall have the respective meanings ascribed to such terms in the
Consultant Agreement (as defined below).
W I T N E S S T H:
WHEREAS, UCDP, as successor to Universal City Florida Partners, and
Diamond Lane Productions, as successor-in-interest to Xxxxxx Xxxxxxxxx (the
"Consultant"), are parties to an agreement, dated as of January 20, 1987 (the
"Consultant Agreement"), relating to the Consultant's rendering of services as a
creative consultant in connection with the Florida Project;
WHEREAS, the Consultant Agreement provides that the Consultant receive
certain payments for serving as a consultant to the Comparable Project known as
Universal Studios Japan (the "Japan Project") as well as other Comparable
Projects;
WHEREAS, VUE beneficially owns 50% of UCDP and is a party to a
contribution agreement, dated as of May 7, 2002, whereby VUE agreed to assume,
among other things, certain liabilities relating to the recreation businesses of
UCDP, including the guarantee of the performance by UCDP of its obligations to
the Consultant under the Consultant Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and legal sufficiency of which VUE hereby acknowledges, VUE hereby
covenants and agrees as follows:
Section 1. Indemnity.
(a) VUE hereby agrees to indemnify, defend and hold harmless UCDP from
and against any out-of-pocket expenses, liability or loss incurred by it during
the Term of this Indemnity and related to a "Consultant Claim." A "Consultant
Claim" is a claim made by the Consultant which claim arises solely under the
Consultant Agreement, but only to the extent that it relates to (i) the Japan
Project or (ii) any other Comparable Project. For purposes of clarity, no
facility owned or controlled by UCDP is a "Comparable Project" for purposes of
this Section 1(a).
(b) UCDP shall give VUE written notice as promptly as practicable (but
in no event later than ten days after receiving notice) of the assertion by the
Consultant of any Consultant Claim, provided that the failure to provide such
notice shall not relieve VUE from its obligations hereunder unless and to the
extent that such failure results in the loss by VUE of material rights or
defenses. Upon receipt of such written notice, VUE shall promptly (but in no
case later than 30 days after receiving the notice from UCDP) notify UCDP that
it will assume responsibility for such claim as a Consultant Claim, or notify
UCDP that such claim is not a Consultant Claim. On VUE's assumption of
responsibility for a Consultant Claim, VUE shall have the sole and exclusive
power to direct and control the defense of, and shall have the sole and
exclusive right to settle or compromise, such Consultant Claim and VUE shall not
be liable to
UCDP for any attorneys' fees or other expenses incurred by UCDP after such
assumption of liability in connection with the defense of such Consultant Claim.
UCDP shall, upon VUE's request, execute all papers reasonably required and shall
take all actions reasonably necessary to secure the rights of VUE, including the
execution of such documents necessary to enable VUE to assert in the name of
UCDP such rights, claims, counterclaims or defenses that UCDP would be or would
have been permitted to assert against such Consultant Claim. In addition, UCDP
shall use all reasonable efforts to make available to VUE such assistance and
cooperation in support of VUE's defense as VUE may reasonable request, including
making available any personnel or any books, records or other documents within
UCDP's control or which UCDP otherwise has the ability to make available that
VUE reasonably believes is necessary or appropriate for such defense.
(c) If UCDP shall receive any amounts of insurance proceeds or any
other monies from a third party in connection with any Consultant Claim, then
such monies shall be promptly paid to VUE.
(d) VUE shall not take any action which would prevent UCDP from
delivering the notice required under Section 1(b) hereof.
Section 2. Amendments. Neither VUE nor UCDP may amend or waive any
provision of this Indemnity and no consent to any departure by such party
therefrom shall in any event be effective unless the same shall be in writing
and signed by the other party hereto, and in the case of UCDP approved by the
Parks Advisory Board (or the comparable successor body) and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 3. Notices. All notices, requests, claims, demands or other
communications by either party hereunder must be in writing and will be deemed
to have been duly given only if delivered personally, by facsimile transmission
or by internationally recognized courier to the recipient at the following
address or facsimile number:
VUE: Vivendi Universal Entertainment LLLP
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to: Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
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UCDP: Universal City Development Partners, Ltd.
0000 Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Vice President, Legal Affairs
Facsimile: (000) 000-0000
All such notices, requests, claims, demands or other communications will (i) if
delivered by facsimile transmission, be deemed given upon electronic
confirmation of receipt and (ii) if delivered personally or by internationally
recognized courier, be deemed given upon actual receipt by the General Counsel
of VUE.
Section 4. No Waiver; Remedies. No failure on the part of either VUE or
UCDP to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
Section 5. Continuing Indemnity; Assignments. This Indemnity is a
continuing indemnity and shall remain in full force and effect from the date
hereof to the date, if ever, on which the Consulting Agreement is terminated or
there are no Comparable Projects for which UCDP might be liable, directly or
indirectly (such period, the "Term"). This Indemnity shall (a) be binding upon
VUE and its successors and permitted assigns and (b) inure to the benefit of and
be enforceable by UCDP and its successors and permitted assigns. Neither VUE nor
UCDP may assign or otherwise transfer any of its rights or obligations under
this Indemnity without the prior written consent of the other party hereto.
Section 6. No Third-Party Beneficiaries. The terms and provisions of
this Indemnity are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other person.
Section 7. Dispute Resolution. Any controversy, claim or dispute
arising out of or related to this Indemnity, or the interpretation, performance
or breach hereof, including but not limited to alleged violations of state or
federal statutory or common law rights or duties, shall be resolved according to
the procedures set forth in Annex A hereto, which shall constitute the sole and
exclusive dispute resolution mechanism hereunder; except that a claim for
equitable relief may only be filed in and heard before the United States
District Court for the Central District of California or, if that court lacks
subject matter jurisdiction, only in and before the Superior Court of the State
of California for the County of Los Angeles. A party need not comply with the
informal dispute resolution and mediation requirements of Annex A before filing
a claim for equitable relief.
Section 8. Governing Law. This Indemnity shall be governed by the laws
of the State of California applicable to contracts made within, and to be
performed in, the State of California.
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IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Indemnity as of the date first above written.
VIVENDI UNIVERSAL ENTERTAINMENT LLLP
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
Agreed and acknowledged on
this March 6, 2003 by
Universal City Development
Partners, Ltd.
By: Universal City Florida Holding Co. II,
as General Partner
By: Universal City Property Management
II LLC, as General Partner.
By: /s/ Xxxxxxxxx Xxxx
Name: Xxxxxxxxx Xxxx
Title: Vice President
By: Blackstone UTP capital partners
L.P., Blackstone UTP Capital
Partners A L.P., Blackstone UTP
Offshore Capital Partners L.P. and
Blackstone Family Media
Partnership III L.P.,
as General Partners
By: Blackstone Media
Management Associates III
L.L.C., as General Partner of
each of the foregoing entities
By: /s/ Xxxxxx Xxxxxx
-----------------------
Name:
Title:
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ANNEX A
DISPUTE RESOLUTION
VUE and UCDP are referred to herein as the "Parties" and individually
as a "Party".
1. Exclusive Procedures. Any controversy, claim or dispute arising out
of or related to this Indemnity, or the interpretation, performance or breach
hereof, including but not limited to alleged violations of state or federal
statutory or common law rights or duties (a "Dispute"), shall be resolved
according to the procedures set forth in this Annex A. These procedures
constitute the sole and exclusive dispute resolution mechanism to resolve all
Disputes and no other procedure, including, without limitation, litigation in
court, may be used except as expressly provided in this Indemnity or the
following paragraphs. Each Party's promise to resolve all Disputes as set forth
herein is given in consideration for the other Parties' like promise.
Any Dispute or portion thereof, or any claim for a particular form
of relief (not otherwise precluded by any provision of this Indemnity), that may
not be arbitrated pursuant to applicable law may be heard in a court of
competent jurisdiction in Los Angeles County, California. If a Party believes in
good faith that all or part of a Dispute, or any claim for relief or remedy
sought, is not subject to arbitration under then-prevailing law, then it may
bring such a claim in arbitration, and the arbitrator shall have the
jurisdiction to determine whether the matter is arbitrable (which decision shall
be appealable to the panel of arbitrators pursuant to Section 4.C(v) below),
unless then-prevailing law requires a court to determine arbitrability. If
then-prevailing law requires a court to determine arbitrability, then a Party
may seek a determination to that effect from an appropriate court, except that
no such action may be brought unless the Party has first complied with the
informal dispute resolution requirements of Section 3 below. If the arbitrator
or court determines that the matter is not arbitrable or that the remedy sought
is not available in arbitration, then the specific matter or request for remedy
in question may be resolved by the court without a jury, and the Parties hereby
irrevocably waive their respective rights to trial by jury of any cause of
action, claim, counterclaim or cross-complaint in any action or other proceeding
brought by any Party against any other Party or Parties with respect to any
matter arising out of, or in any way connected with or related to, this
Indemnity or any portion hereof, whether based upon contractual, statutory,
tortious or other theories of liability. All other matters and claims for relief
shall be subject to arbitration as set forth herein.
2. Confidentiality. The details and/or existence of any Disputes, any
informal meetings and arbitration proceedings conducted hereunder, and any
discovery taken in connection with any arbitration, shall be kept strictly
confidential and shall not be disclosed or discussed with any third party
(excluding a Party's attorneys, accountants, and other agents and
representatives, as reasonably required in connection with any Dispute
resolution procedure hereunder), except as otherwise required by law. In the
event that any Party receives a subpoena or other request for information from a
third party for such confidential information, the recipient shall promptly
notify the other Party and shall provide such Party with the opportunity to
object to the production of its confidential information.
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3. Informal Dispute Resolution. The Parties shall attempt, whenever
possible, to discuss and resolve any Disputes on an informal basis, in order to
avoid the expense and delay associated with arbitration. A Party invoking these
dispute resolution procedures shall deliver a notice to the other Party (a
"Dispute Notice") of the claims it intends to bring and the relief sought,
including sufficient details regarding the factual, contractual or other legal
bases for the Party's claim as reasonably required to enable the Party receiving
the Dispute Notice to evaluate the claim and respond thereto.
Upon delivery of a Dispute Notice, the Parties shall promptly
schedule one or more meetings (the first meeting to be held within five days of
delivery of the Dispute Notice), to discuss and attempt in good faith to resolve
all Disputes described in the Dispute Notice(s). Such meetings shall be attended
by the Parties or their representatives with full authority to settle the
Disputes at issue.
All offers, promises, conduct and statements, whether oral or
written, made in the course of the Parties' attempt to informally resolve a
Dispute, whether made by the Parties, their agents, employees, experts or
attorneys, shall be confidential, privileged and inadmissible for any purpose,
including impeachment, in any litigation, arbitration (including, without
limitation, arbitration pursuant to the following section hereof) or other
proceeding.
4. Arbitration.
A. Initiation. If the Parties are unable to resolve one or more
Disputes on an informal basis as contemplated by Section 3, a Party may
initiate a binding arbitration proceeding for the final resolution of
such remaining Dispute(s) by delivering a notice to the other
Party(ies) (an "Arbitration Notice") describing the Dispute(s) to be
arbitrated. An Arbitration Notice can be delivered at any time after
ten days from delivery of a Dispute Notice or, in the case of a request
for provisional remedies (including injunctive relief), at any time
after the delivery of a Dispute Notice. Within fifteen days of
receiving an Arbitration Notice, the receiving Party may deliver its
own Arbitration Notice, specifying additional Disputes to be submitted
to arbitration. If more than one Dispute is to be arbitrated, the
subject matters of the various Disputes need not be related to each
other. There shall also be no requirement that Disputes or claims that
would be considered either compulsory or permissive counterclaims under
any law or rule of procedure must be made or resolved in a single
arbitration proceeding. Nothing in this Section 4.A shall relieve,
amend or constitute a waiver of the Parties' obligations under Section
3.
B. Arbitrator/Place of Arbitration. The arbitration, which shall
take place in Los Angeles County, shall be administered by the Los
Angeles office of JAMS/Endispute ("JAMS"), or any successor thereof, in
accordance with the JAMS Comprehensive Arbitration Rules and Procedures
(the "JAMS Rules"), except as otherwise provided herein. The
arbitration shall be held before and decided by a single neutral
arbitrator (the "Arbitrator"). The Arbitrator shall be a person
familiar with complex business transactions and litigation, selected in
accordance with the JAMS Rules. The arbitration hearing shall commence
no later than sixty days after the delivery of an Arbitration Notice,
unless the Arbitrator for good cause sets a later date.
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C. Arbitration Procedures. The following procedures shall apply to
the arbitration. To the extent that any issue is not addressed herein,
the appropriate provisions of the JAMS Rules shall apply.
(i) Discovery. The Parties shall be entitled to undertake
discovery in the arbitration as determined by the Arbitrator;
provided, that, such discovery shall be limited to (a) five
witness depositions plus the depositions of any expert designated
by the other Party, (b) thirty interrogatories, (c) thirty
document requests and (d) ten requests for admissions. The
Arbitrator shall have the authority to hear and rule upon all
discovery motions and, in connection therewith, to award sanctions
as appropriate in accordance with then-prevailing California law.
(ii) Motions. The Arbitrator shall have the authority to
schedule, hear and determine any and all motions (including
prehearing and posthearing motions), including, without
limitation, motions to dismiss, for judgment on the pleadings, and
for summary judgment or adjudication on any or all of the claims,
issues or facts in dispute, and shall do so on the motion of any
Party.
(iii) Remedies. Upon motion of a Party, the Arbitrator shall
have the authority, to the extent permitted by law, to enter an
interlocutory award granting temporary, preliminary or provisional
remedies (including injunctive relief) in order to maintain the
status quo pending conclusion of the arbitration proceedings. The
Arbitrator shall have the authority in the Award (as defined
below) to grant any compensatory and equitable relief he or she
deems appropriate, including the award of costs and fees, specific
performance, injunctive relief or any other form of equitable
relief; provided, that, the Arbitrator may not award special,
incidental, consequential or punitive damages. To the extent that
applicable law does not permit an arbitrator to enter injunctive
or any other equitable relief, any aggrieved Party may apply to
any court of competent jurisdiction in the County of Los Angeles
for such relief, but a court may not award any monetary relief
whatsoever.
(iv) Award. The Arbitrator shall render a written award (the
"Award") no later than thirty days after the end of the hearing or
after completion of any post-hearing briefing that the Arbitrator
shall order or permit, whichever is later. The Award shall
completely dispose of all Disputes submitted to the Arbitrator and
shall include findings of fact and conclusions of law. In all his
or their substantive (as opposed to procedural or
discovery-related) rulings, the Arbitrator and Appeal Panel shall
apply the law specified in the choice of law provision of this
Indemnity.
(v) Appellate Review. The Parties agree that any Award,
including an Award rendered following remand after appellate
review hereunder, shall be subject to review according to the
Optional Appeal Procedure of the JAMS Rules, as modified herein.
The Appeal Panel shall be composed of three retired judges or
justices of any California State or federal court, selected in
accordance
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with the JAMS Rules. The Arbitrator who rendered the Award being
reviewed shall not be eligible to serve on the Appeal Panel.
The Appeal Panel may review all issues of fact and law
specified in the notice of appeal and any cross-appeal, as if the
appeal were being heard and decided by a panel of the California
Court of Appeal reviewing a judgment of a California Superior
Court in a civil action. The review shall be conducted in
accordance with the procedures set forth in the California Code of
Civil Procedure and California Rules of Court applicable to
appeals from judgments in general commercial cases from California
Superior Courts to the California Courts of Appeal. After briefing
and any oral argument by the Parties that the Appeal Panel deems
necessary, the Appeal Panel shall render a written decision, which
may affirm or reverse the Award in whole or in part and may note
any specific evidence that the Arbitrator should consider or other
actions to be taken upon remand, if necessary. At the conclusion
of any post-appeal proceedings before the Arbitrator that are
required by the Appeal Panel's decision, the Arbitrator shall
issue a new Award, which shall be subject to appeal hereunder.
D. Binding; Notice of Final Award; Confirmation. The Arbitrator's
Award, as modified, if applicable, following one or more appeals
pursuant to Section 4.C(v) above, shall become final and fully binding
upon the Parties (the "Final Award") after the expiration of any
applicable time limit in which to appeal expires without a Party
invoking the appellate review process (the "Final Award Date"). The
Parties shall have thirty days from the Final Award Date in which to
perform all obligations applicable to them under the Final Award. If a
Party fails to perform any obligation under the Final Award within such
thirty day period, then the other Party may apply to any court of
competent jurisdiction in the County of Los Angeles for confirmation of
the Final Award.
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