ASTERISKS INDICATE MATERIAL THAT HAS BEEN REDACTED, FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED.
Exhibit
10.1
ASTERISKS
INDICATE MATERIAL THAT HAS BEEN REDACTED, FOR WHICH
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED.
Execution
Version
This AMENDMENT TO THE AGREEMENT
(this "Amendment"), dated as
of October 18, 2009 (the "Amendment Date"), is
entered into by and among Xxxxxx Xxxxxxxxx, in his personal capacity, Diamond
Lane Productions, Inc., a California corporation ("DLP" and together
with Xxxxxx Xxxxxxxxx, "Xxxxxx"), and
Universal City Development Partners, Ltd., a Florida limited partnership (as
successor in interest to Universal City Florida Partners, the "Partnership"), such
parties to be referenced individually as a "Party" and
collectively as the "Parties".
RECITALS
WHEREAS,
Xxxxxx Xxxxxxxxx and the Partnership are parties to that certain Agreement,
dated as of January 20, 1987, and amended and/or modified as of January 5, 2001,
July 15, 2003 and March 30, 2006 (collectively, the "Agreement"), with
respect to Xxxxxx Xxxxxxxxx rendering certain services to the Partnership as
creative consultant in connection with certain projects;
WHEREAS
Xxxxxx Xxxxxxxxx by letter dated February 27, 1989, has directed that all
payments to him by the Partnership under the Agreement be made to
DLP;
WHEREAS,
DLP is currently receiving payments for the Florida Project and one Comparable
Project in Osaka, Japan;
WHEREAS,
additional projects that could constitute Comparable Projects are currently
contemplated in Singapore, Dubai, *** and ***;
WHEREAS,
subject to the terms and conditions set forth herein, the Parties agree to amend
the Agreement by way of this Amendment; and
WHEREAS,
capitalized terms used but not defined in this Amendment shall have the meanings
ascribed to them in the Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
ARTICLE
I
AMENDMENTS TO THE
AGREEMENT
1.1 Amendments to the
Agreement. Xxxxxx and the Partnership each hereby consents and
agrees that the Agreement is hereby amended as follows:
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(a)
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The
first sentence of Paragraph 11(b)
of the Agreement is hereby amended and restated in its entirety to read as
follows:
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"Subsequent
to the above three-year period as to the Florida Project and for all years
during the term of this agreement as to the Comparable Project in Osaka, Japan
known as Universal Studios Japan ("USJ"), DLP shall be
paid ***% of 100% of the gross revenues, gross rentals, sales price, etc.
instead of the above provided ***%."
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(b)
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Paragraph 11(d)
of the Agreement is hereby amended and restated in its entirety to read as
follows:
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"DLP will
be entitled to quarterly accountings and payments based thereon within 45 days
from the end of each quarter. On every June 30th during the term of
this Agreement (or, if not a Business Day (as used herein, "Business Day" means
any day that is not a Saturday, Sunday or other day on which commercial banks in
Orlando, Florida are authorized or required by law to remain closed), on the
next Business Day thereafter), (i) the Partnership will provide DLP with a
three-year projection of the payments projected to be owed to DLP under this
Agreement in respect of the Florida Project and (ii) Universal City Studios LLLP
d/b/a Universal Parks and Resorts ("UPR") will provide
DLP with a three-year projection of the payments projected to be owed to DLP
under this Agreement in respect of each Comparable Project.
Such
projections will be based on management’s reasonable best estimates as to the
future performance of the Florida Project and such Comparable Projects at the
time prepared. Xxxxxx acknowledges and agrees that such projections
are for informational purposes only and actual performance may differ
substantially from such projections. Neither the Partnership nor UPR,
nor any guarantor of the Partnership’s obligations under this Agreement, shall
incur any liability with respect to such projections. Xxxxxx shall
keep all such projections confidential pursuant to (i) Paragraph 25 of this
Agreement, (ii) that certain Confidentiality Agreement between DLP and UPR,
dated as of May 1, 2009 and (iii) that certain Confidentiality Agreement between
DLP and the Partnership, dated as of October 15, 2009."
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(c)
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Paragraph 11(e)
of the Agreement is hereby amended and restated in its entirety to read as
follows:
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"Except
as provided in the remainder of this Paragraph 11e, the payment to DLP of ***%
of the Project’s revenues specified above in this Paragraph 11 shall, subject to
Paragraphs 13e and 14e, apply also to Comparable Projects in which Xxxxxx
becomes vested hereunder pursuant to Paragraph 12 while Xxxxxx has an obligation
to render consulting services hereunder (as the term of his obligation to render
consulting services may be extended pursuant to Paragraph 13). "Gross
revenues" of a Comparable Project shall be defined as set forth in Exhibit "A",
as if the Partnership was the sole owner and operator of such Comparable
Project. Notwithstanding the foregoing to the contrary, with respect
to any Comparable Project (other than USJ) in which DLP’s interest is vested
hereunder pursuant to Paragraph 12 while Xxxxxx has an obligation to render
consulting services hereunder (as the term of his obligation to render
consulting services may be extended pursuant to Paragraph 13) (and are not
exempted by Paragraphs 13e or 14e) and in which the Partnership and/or any
Affiliate(s) do(es) not own or control at least 50% of the equity thereof, in
lieu of all other sums provided above in this Xxxxxxxxx 00, XXX shall receive a
participation in 100% of the gross revenues, gross rentals and sales price, etc.
of such Comparable Project equal to the greater of (i) ***% and (ii) the
percentage figure determined by multiplying *** times the ratio that the
Partnership’s (and/or any Affiliate’s) equity in such Comparable Project bears
to 50%. For example, if the Partnership and/or any Affiliates own 45%
of the equity of a Comparable Project, then DLP shall receive ***% of 100% of
the gross revenues, gross rental, sales price, etc., of such Comparable
Project."
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(d)
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Paragraph 12 of
the Agreement is hereby amended and restated in its entirety to read as
follows:
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"12. Vesting. Xxxxxx
has earned the right to receive ***% of 100% of the gross revenues, gross
rentals, sales price, etc., from the Florida Project and from USJ, each as in
existence on the effectiveness of that certain Amendment to the Agreement (the
"2009
Amendment"), dated October 18, 2009 (such date of effectiveness, the
"2009 Amendment
Date") (which means that such compensation is "vested"). The
term "vest" and "vested" as hereinafter used in this Agreement means Xxxxxx
cannot be deprived of payments which are "vested" by reason of Steven’s death or
disability or by reason of Steven’s default. Xxxxxx is also deemed
vested as of the 2009 Amendment Date in his right to receive the amounts set
forth in Paragraph 11e in connection with the Comparable Projects contemplated
as of the 2009 Amendment Date in Singapore, Dubai, *** and *** (the "Contemplated
Projects"). Steven’s right to compensation from any other
Comparable Project (other than USJ and the Contemplated Projects) under
Paragraph 11 shall vest with respect to each such Comparable Project if, on the
date when construction of such Comparable Project commences, as evidenced by
on-site physical work such as demolition, clearing or construction, Xxxxxx
continues to have an obligation to render consulting services hereunder, this
Agreement has not been terminated as a result of Steven’s material breach and
Xxxxxx is not then deceased or permanently and substantially mentally
disabled. For the avoidance of doubt, nothing in this Agreement shall
obligate the Partnership or any of its Affiliates, or UPR, to proceed with the
development or opening of any Comparable Project (including but not limited to
the Contemplated Projects). Also for the avoidance of doubt, the fact
that a Comparable Project has "vested", and therefore Xxxxxx cannot be deprived
of payments which are "vested" by reason of the events noted above, shall not in
and of itself mean that Xxxxxx has any right to receive compensation in respect
of such Comparable Project pursuant to Paragraph 14b. Nothing set
forth herein deprives the Partnership of its right to damages (and its offset
and other rights at law or in equity, if any) in the event of Steven's material
breach hereof."
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(e)
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Paragraph 13b
is hereby amended by inserting the following sentence at the end
thereof:
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"The
Partnership is deemed to have given Xxxxxx a timely written notice, pursuant to
and in accordance with Paragraph 13a, pursuant to which the Partnership has
declined to exercise its Extension Option for the Extension Year containing the
2009 Amendment Date, and Xxxxxx is deemed to have exercised Steven’s Option for
each year that he has the right to do so, whether or not written notice is given
as herein provided."
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(f)
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The
first sentence of Paragraph 14 of
the Agreement is hereby amended and restated in its entirety to read as
follows:
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"The
"Termination Date" is defined to be June 7, 2017."
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(g)
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Paragraph 14(b)
of the Agreement is hereby amended and restated in its entirety to read as
follows:
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"(i)
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Subject
to this Paragraph 14b and Paragraph 14e, the Partnership will pay DLP, in
accordance with the terms hereof, the fair market value of Steven's
interest in the Florida Project and in all Comparable Projects which were
vested pursuant to Paragraph 12 hereunder and open to the general public
as of the date which is one year prior to the Stop Date (the "Put Payment"),
which Put Payment will be determined in accordance with Exhibit D
(Put Payment)
attached hereto (the "Put Payment
Formula").
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(ii)
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At
any time prior to the Stop Date (but in no event later than June 7, 2017)
and solely with respect to the Florida Project and Comparable Projects
opened to the general public for greater than one year at the time of
election (the Florida Project and such Comparable Projects, collectively,
the "Qualifying
Projects"), DLP may make a one-time election by written notice (the
"Interim
Adjustment Election"), which shall be dated the date of delivery to
the Partnership, to provide for the calculation of an amount which DLP may
choose to receive in lieu of the Put Payment (the "Alternative
Payment") if the Stop Date occurs on or before March 31, 2018;
provided, however, that the
calculation as to any such Qualifying Project which shall not have been
opened to the general public at least three years when the Interim
Adjustment Election is made (such Qualifying Project, a "Late Qualifying
Project") shall occur as set forth below on the third anniversary
of its opening to the general public (the "Late Qualifying
Adjustment Date"). The Alternative Payment shall be
calculated by adjusting the Applicable Discount Rate and the Applicable
Base Payment (as such terms are defined in Exhibit D) set
forth in the Put Payment Formula (the "Interim
Adjustments") as of a date (the "Interim Adjustment
Date") that is (i) for the Qualifying Projects (other than the Late
Qualifying Projects), 90 days after date of the Interim Adjustment
Election and (ii) for any Late Qualifying Project, the Late Qualifying
Adjustment Date. DLP’s election to receive the Alternative
Payment in lieu of the Put Payment (the "Payment
Election") shall be made within 10 Business Days after the amounts
of the Put Payment and Alternative Payment are determined with respect to
the Qualifying Projects that are not Late Qualifying Projects, and such
Payment Election shall be required to apply to all but not less than all
of the Qualifying Projects (including the Late Qualifying Projects) in
connection with the calculation of the Put Payment or Alternative Payment,
as the case may be.
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(iii)
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In
connection with the Interim Adjustment Election, the Interim Adjustments
shall be applied to the Put Payment Formula in order to calculate the
Alternative Payment as follows:
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(A)
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The
Applicable Discount Rate for the Florida Project (as defined in Exhibit D) and
the Applicable Discount Rate for a Comparable Project (as defined in Exhibit D) that
is a Qualifying Project, as the case may be, shall be calculated as
follows:
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two-thirds
(2/3) multiplied by (x)
the Applicable Discount Rate for the Florida Project on the Interim Adjustment
Date or (y) the Applicable Discount Rate for such Comparable Project on the
Interim Adjustment Date, as the case may be,
plus
one third
(1/3) multiplied by (x)
the Applicable Discount Rate for the Florida Project on the Stop Date or (y) the
Applicable Discount Rate for such Comparable Project on the Stop Date, as the
case may be; and
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(B)
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the
Applicable Base Payment for the Florida Project (as defined in Exhibit D) and
the Applicable Base Payment for such Comparable Project (as defined in
Exhibit
D), as the case may be, shall be calculated as of the Interim
Adjustment Date, rather than as of the Stop
Date.
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(iv)
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DLP's
right to choose to receive, on the Stop Date, the Alternative Payment in
lieu of the Put Payment shall be inapplicable if the Stop Date does not
occur on or prior to March 31, 2018. For the avoidance of
doubt, in the event DLP receives the Alternative Payment, it is
acknowledged that the Alternative Payment shall be calculated only with
respect to the Qualifying Projects (including Late Qualifying Projects, if
any), and DLP will have no interest of any kind in, or right to receive
any compensation whatsoever with respect to, any Comparable Projects that
are not Qualifying Projects or Late Qualifying Projects, nor will Xxxxxx
have any further obligation to render consulting services on any such
Comparable Project that is not a Qualifying Project or Late Qualifying
Project (regardless of whether such Comparable Project that is not a
Qualifying Project or Late Qualifying Project opened to the general public
more or less than one year before the Stop Date, or opened to the general
public anytime after the Stop
Date).
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(v)
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If
DLP receives the Put Payment (and not the Alternative Payment) set forth
in clause (i) above, and on the Stop Date any Comparable Project
(including any Contemplated Project) which has vested hereunder, has been
opened to the general public as of the date which is one year prior to the
Stop Date, and has not then been opened to the general public for at least
3 years prior to the Stop Date, the Put Payment with respect to such
Comparable Project shall occur within 10 Business Days following the date,
if any, that such Comparable Project has been opened to the general public
for 3 years (it being understood that the Applicable Base Payment and the
Applicable Discount Rate for any such Comparable Project shall be
calculated as of the date that such Comparable Project has been opened to
the general public for 3 years, and not as of the Stop Date), and DLP
shall continue to receive its quarterly compensation payments pursuant to
Paragraph 11 hereunder on such Comparable Project until such Put Payment
is made."
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(h)
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The
last two sentences of Paragraph 15 of
the Agreement are hereby amended and restated in their entirety to read as
follows:
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"If the
Partnership and/or its Affiliates transfer ownership of their equity interests,
if any, in the Florida Project and any then-existing Comparable Projects as a
unit to a new owner, provided that as of the date of such change of ownership,
the financial condition of the new owner reasonably appears to Xxxxxx to be
sufficiently strong to enable the new owner to comply with its obligations to
Xxxxxx and such new owner assumes for Steven’s benefit all of the Partnership’s
obligations to Xxxxxx in writing, Xxxxxx will look solely to the new owner for
any obligations accruing or arising after said date and the guarantees by MCA
Inc. and Cineplex Odeon Corporation, as well as, in the event the transfer
occurs after June 7, 2017, the guarantee by NBC Universal, Inc. ("NBCU"), referred to
in Paragraph 22 will terminate. Except as set forth above, no
transfer of ownership shall affect the rights and obligations of the
parties."
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(i)
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The
reference to "Paragraph 14b" in the seventh sentence of Paragraph 16 of
the Agreement is hereby deleted and replaced with "Paragraph
20".
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(j)
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Paragraph 20 of
the Agreement is hereby amended by inserting the following sentence at the
end thereof:
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"In the
event either Xxxxxx or the Partnership commences any such arbitration against
the other party with respect to this Agreement, the parties agree that the
prevailing party (as determined by the arbitral panel before whom such
proceeding is commenced) shall be entitled to recover reasonable attorneys' fees
and costs as may be incurred in connection therewith in addition to any such
other relief or award as may be granted."
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(k)
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Paragraph 22 of
the Agreement is hereby amended and restated in its entirety to read as
follows:
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"22. Guarantees and Security;
Powers of Attorney; Costs of Perfection.
a. Guarantees. Credit
support for the Partnership's obligations hereunder will be provided (i) by a
joint and several Guarantee, dated November 4, 1988, of MCA, Inc. and Cineplex
Odeon Corporation and (ii) by the Guarantee (the "NBCU Guarantee"),
dated October 18, 2009, of NBCU attached as Appendix B to the
2009 Amendment.
b. Security. Credit
support for the Partnership's obligations hereunder will also be provided
pursuant to security documentation executed and delivered in conformity with
Paragraphs 3.1(b) and (c) to the 2009 Amendment, by which, among other things,
the Partnership's obligations arising in respect of the Florida Project shall be
secured by a perfected junior security interest and mortgage lien on the
Partnership's tangible personal and real property included in the Florida
Project, which security interest and mortgage lien will apply to the property
described in, and shall have the terms and be subordinated and junior to the
extent set forth in, Paragraphs 3.1(b) and (c) of the 2009
Amendment.
The
security documentation securing the Partnership's obligations arising in respect
of the Florida Project will not restrict the Partnership's ability to operate,
manage, alter or sell any or all of the property representing collateral or
contain any covenants or obligations, other than to grant and perfect for
Steven's benefit a security interest in the enumerated classes of
property.
The
parties agree that the security interest and mortgage lien with respect to the
Florida Project granted to Xxxxxx pursuant to Paragraphs 3.1(b) and (c) of the
2009 Amendment will by their terms terminate and be released in full at such
time that the senior liens contemplated by such Paragraphs 3.1(b) and (c) of the
2009 Amendment is released, provided that at that time no other security
interest and mortgage lien in the Florida Project shall have been granted by the
Partnership to any other lender. The security interest and mortgage
lien would not be released under circumstances where Xxxxxx is seeking to
realize against the collateral and the senior lien contemplated by such
Paragraphs 3.1(b) and (c) of the 2009 Amendment is released as a result of the
application of proceeds of realization against the collateral. Under
such circumstances, the junior security interest and mortgage lien will be
released on the collateral foreclosed upon, but not on collateral that is not
foreclosed upon (and not on any proceeds of foreclosure remaining after payment
in full of any prior obligations).
If after
the release of the liens granted to Xxxxxx, the Partnership subsequently grants
to any lender a security interest with respect to property included in the
Florida Project, the Partnership will at that time grant to Xxxxxx a junior
security interest and mortgage lien with respect to such property to the extent
it includes the tangible personal and real property of the type included in the
previously released junior security interest and mortgage lien as described and
subject to the terms set forth above and in Paragraphs 3.1(b) and (c) of the
2009 Amendment; provided, however, that if the
subsequent security interest and mortgage lien is a purchase money lien limited
to the property being purchased, then no such junior security interest shall be
required. For the avoidance of doubt, such terms include those set
forth in Appendix
C to the 2009 Amendment. Also, it is agreed that any existing
or subsequent senior secured debt may not exceed in the aggregate the greater of
$975 million and an amount equal to the product of 3.75 times the EBITDA of the
Partnership (determined at the time of the incurrence of any term loans or at
the time of increasing any revolving commitments or at the time of incurring any
other senior secured debt, as the case may be, with "EBITDA" being defined in
and calculated pursuant to the relevant provisions of the senior secured credit
facilities referenced in Paragraph 3.1(c) of the 2009 Amendment).
The
parties agree that the security interest and mortgage lien with respect to the
Florida Project granted to Xxxxxx pursuant to Paragraphs 3.1(b) and (c) of the
2009 Amendment will contain self-executing provisions that state that, in the
event of the release of any collateral from the lien of any security interest
and/or mortgage securing the Partnership’s then-existing senior secured credit
facilities, the same collateral, if encumbered by any security interest and/or
mortgage lien with respect to the Florida Project granted to Xxxxxx pursuant to
Paragraphs 3.1(b) and (c) of the 2009 Amendment, will automatically be deemed to
be released therefrom. Such self-executing automatic release
provisions shall be in addition to, not in lieu of, the powers of attorney
described in Paragraph 3.1(c) of the 2009 Amendment, and shall not derogate from
the powers of the attorneys-in-fact under such powers of attorney. In
the event the Partnership determines to issue Incremental Obligations (as
defined in the Appendix C to the
2009 Amendment), then Xxxxxx will enter into an intercreditor agreement and
provide a power of attorney with respect to such Incremental Obligations having
substantive terms comparable to and based on those set forth in Appendix C to the
2009 Amendment and Paragraph 22c below.
x. Xxxxxx of
Attorney. Referring
to the General Power of Attorney described in Appendix C to the
2009 Amendment, Xxxxxx shall, from time to time, as applicable, provide a power
of attorney having similar terms for any agent which shall succeed any agent
acting for the benefit of the first lien secured parties and for any such agent
in any subsequent senior financing described above, within 10 days of being
furnished with a form of power of attorney for execution.
Furthermore,
in addition to the General Power of Attorney described in Appendix C to the
2009 Amendment, Xxxxxx shall provide, on or before the 2009 Amendment Date, and
from time to time thereafter (within 10 days of being furnished with a form of
power of attorney for execution), as applicable in the case off successors, an
irrevocable, unconditional and recordable General Power of Attorney in favor of
NBCU (and its successors as guarantors under the NBCU Guarantee), pursuant to
which Xxxxxx shall authorize NBCU (and its successors as guarantors under the
NBCU Guarantee) to execute and record, in the name and on behalf of Xxxxxx, (i)
a release (x) each time that the first lien secured parties execute and record a
similar such release or (y) in connection with any sale or transfer, in whole or
in part, of any or all of the real or personal property in which a collateral
interest is granted pursuant to this Paragraph 22, and (ii) a subordination (x)
each time that the first lien secured parties execute and record a similar such
subordination or (y) in connection with any refinancing, in whole or part, of
the senior security interests and mortgage liens encumbering the Florida Project
or any portion thereof or interest therein.
d. Costs of
Perfection. The
Partnership shall bear the cost to perfect the security interest and mortgage
lien granted pursuant to this Paragraph 22b, including, without limitation,
mortgage recording taxes and other filing fees, but the parties shall otherwise
be obligated, subject to Paragraph 20, for their own costs and expenses,
including without limitation, legal fees and expenses."
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(l)
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The
Agreement is hereby amended by inserting the following Paragraph 26
after Paragraph
25 of the Agreement as
follows:
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"26. Notices. All
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail, or sent by telecopy, as follows:
(i) if to
the Partnership, to it at Universal City Development Partners, Ltd., 0000
Xxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Chief Financial
Officer, Telecopier No.: (000) 000-0000, with a copy to
Universal City Development Partners, Ltd., 0000 Xxxxxxxxx Xxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000, Attention: Vice President, Legal Affairs, Telecopier
No.: (000) 000-0000, with a copy to NBC
Universal, Inc., 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxxxx
Xxxxxx Shibata, Executive Vice President, Financial Planning and Analysis,
Telecopier No.: (000) 000-0000), with a copy to NBC
Universal, Inc., 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention
of Xxxxx Xxxxxx, Senior Vice President, Corporate & Transactions Law,
Telecopier No.: (000) 000-0000); and
(ii) if
to Xxxxxx, at Gang Tyre Xxxxx and Xxxxx, Inc., 000 X Xxxxx Xx., Xxxxxxx Xxxxx,
XX 00000, Attention of Xxxxx Xxxxx and Xxxxxx Xxxxx, Telecopier Nos. (telecopy
to be sent to both numbers): (000) 000-0000 and (000) 000-0000, with a copy to
Xxxxxxxxx, Xxxxxx and Xxxxxxxx, 00000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxxxx,
XX 00000-0000, Attention of Xxxxxx Xxxxxxxxx and Xxxxxx Xxxxxx, Telecopier Nos.
(telecopy to be sent to both numbers): (000) 000-0000 and (000)
000-0000.
Each
party hereto may change its address or telecopier number for notices and other
communications hereunder by notice to the other party. All notices
and other communications given in accordance with the provisions of this
Agreement will be deemed to have been given on the date of
receipt."
ARTICLE
II
REPRESENTATIONS AND
WARRANTIES
2.1 Representations and
Warranties of DLP. DLP represents and warrants to the
Partnership as follows:
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(a)
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DLP
is duly organized and existing in good standing under the laws of the
state of its organization with full power and authority to enter into this
Amendment;
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(b)
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this
Amendment constitutes the legal, valid and binding obligation of Xxxxxx,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and subject to the general
powers of a court of equity; and
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(c)
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the
execution and performance of this Amendment by DLP does not and will not
violate any provision of, or constitute a default under or breach of, any
agreement or instrument, order, arbitration award, judgment or decree to
which DLP, as applicable, is a party or by which any of DLP’s
assets is bound.
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2.2 Representations and
Warranties of the Partnership. The Partnership represents and
warrants to Xxxxxx as follows:
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(a)
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the
Partnership is duly organized and existing in good standing under the laws
of the state of its organization with full power and authority to enter
into this Amendment;
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(b)
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this
Amendment constitutes the legal, valid and binding obligation of the
Partnership, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and subject to the
general powers of a court of equity;
and
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(c)
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the
execution and performance of this Amendment by the Partnership does not
and will not violate any provision of, or constitute a default under or
breach of, any agreement or instrument, order, arbitration award, judgment
or decree to which the Partnership is a party or by which any of its
assets is bound.
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ARTICLE
III
CONDITIONS
TO EFFECTIVENESS
3.1 Conditions. This
Amendment and the Guarantee dated as of the date hereof attached hereto in the
form of Appendix
B hereto (the "NBCU Guarantee") made
by NBC Universal, Inc. ("NBCU") for the
benefit of Xxxxxx, shall not become effective until the following conditions are
satisfied:
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(a)
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Each
of the parties to this Amendment and the NBCU Guarantee (or their counsel)
shall have received counterparts of this Amendment and the NBCU Guarantee
executed by the other parties thereto. Delivery of an executed counterpart
of a signature page of this Amendment or the NBCU Guarantee by facsimile
or electronic transmission will be effective as delivery of a manually
executed counterpart thereof.
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(b)
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In
order to secure the Partnership's obligations in respect of the Florida
Project, the Partnership and Xxxxxx shall have executed and delivered (i)
documentation granting Xxxxxx a security interest in, and a mortgage lien
on, the tangible personal and real property assets of the Partnership
included in the Florida Project, which documentation and security
interests and mortgage liens shall have the terms contemplated by the
Intercreditor Agreement referred to below and (ii) Xxxxxx shall have
provided the powers of attorney referred to in Paragraph 22c of the
Agreement (as amended) and Appendix C
attached hereto.
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(c)
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Xxxxxx
and the agent for the Partnership’s senior secured credit facilities shall
have executed and delivered an intercreditor agreement on terms as
provided in Appendix C to
this Amendment (the "Intercreditor
Agreement").
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(d)
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Either
(i) the requisite lenders under the Partnership’s senior secured credit
facilities shall have consented to permit the transactions contemplated
above and any related transactions or (ii) the Partnership’s senior
secured credit facilities shall be amended on terms that permit the
transactions contemplated above and any related
transactions.
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3.2 Agreement to
Facilitate. Each of the parties hereto hereby agrees to exercise all
commercially reasonable efforts to cause the conditions set forth in Paragraph
3.1 above to be satisfied as promptly as possible, it being understood that the
Partnership has no obligation to satisfy the condition set forth in Paragraph
3.1(b) or Paragraph 3.1(d) above on terms that are not acceptable to
it.
ARTICLE
IV
MISCELLANEOUS
4.1 Governing
Law. THIS
AMENDMENT SHALL BE
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
4.2 Paragraph
Headings. The paragraph titles contained in this Amendment are
included for convenience only and are without substantive meaning or content and
are not a part of the agreement between the Parties hereto.
4.3 Counterparts. This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
[Remainder of page intentionally left
blank. Signature pages to follow.]
IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be executed by their duly
authorized officers as of the Amendment Date first above written.
/s/
Xxxxxx Xxxxxxxxx
XXXXXX
XXXXXXXXX
DIAMOND LANE PRODUCTIONS,
INC.
|
|
By: /s/
Xxxxxx Xxxxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxxxx
|
|
|
Title:
President
|
UNIVERSAL
CITY DEVELOPMENT PARTNERS, LTD.
|
|
By:
|
Universal
City Florida Holding Co. II, General
Partner
|
|
|
By:
|
Universal
City Property Management II LLC, General
Partner
|
|
|
By: /s/
Xxxxxx Xxxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxxx
|
|
|
Title:
Chairman and CEO
|
|
|
By:
|
Blackstone
UTP Capital LLC, General Partner
|
|
|
By: /s/
Xxxxx Xxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxx
|
|
|
Title:
President and Treasurer
|
|
|
By:
|
Blackstone
UTP Capital A LLC, General Partner
|
|
|
By: /s/
Xxxxx Xxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxx
|
|
|
Title:
President and Treasurer
|
|
|
By:
|
Blackstone
UTP Offshore Capital LLC, General
Partner
|
|
|
By: /s/
Xxxxx Xxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxx
|
|
|
Title:
President and Treasurer
|
|
|
By:
|
Blackstone
Family Media III LLC, General
Partner
|
|
|
By: /s/
Xxxxx Xxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxx
|
|
|
Title:
President and Treasurer
|
We agree
to provide the reports to be provided by us pursuant to Paragraph 11d of the
Agreement.
UNIVERSAL
CITY STUDIOS LLLP
d/b/a
Universal Parks and Resorts ("UPR")
By: /s/
Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
Chairman and CEO
Universal
Studios, Inc., as successor-in-interest to MCA Inc., reaffirms, as of October
__, 2009, its obligations under the Guarantee, dated November 4, 1988, executed
by MCA Inc. and Cineplex Odeon Corporation.
UNIVERSAL
STUDIOS, INC.
By: /s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Executive Vice President and Chief Financial OfficerAppendix
A
to
the Amendment
|
|
Exhibit
D to the Agreement
|
Put
Payment
The Put
Payment will be calculated based on the following formula. There will
be a separate Put Payment calculation for the Florida Project and for each
eligible Comparable Project. The total Put Payment will equal the sum
of the Put Payments for the Florida Project and for each eligible Comparable
Project:
Formula:
|
Put
Payment =
|
Applicable
Base
Payment
|
X
|
Cap
Rate
|
where
|
Cap
Rate =
|
(1+
Applicable Growth Rate)
|
|
(Applicable
Discount Rate – Applicable Growth
Rate)
|
Definitions:
Applicable Base
Payment for the Florida Project: The Applicable Base
Payment for the Florida Project will equal the higher of (a) the sum of the
amounts paid to DLP under the Agreement in respect of the Florida Project over
the last *** quarters prior to the Stop Date, divided by ***, and (b) the sum of
the amounts paid to DLP under the Agreement in respect of the Florida Project
over the last *** quarters prior to the Stop Date, divided by ***.
Applicable
Discount Rate for the Florida Project: The Applicable Discount
Rate for the Florida Project will equal the most recent yield, prior to the Stop
Date, on the Stripped Principal of U.S. Treasury Bonds with a maturity closest
to 10 years, as quoted by Bloomberg, or if unavailable, a similar source, plus a
risk premium of 6.5 percent.
Applicable Growth
Rate for the Florida Project: The Applicable Growth Rate for
the Florida Project will equal ***%.
Applicable Base
Payment for a Comparable Project: The Applicable Base Payment
for a Comparable Project will equal the higher of (a) the sum of the amounts
paid to DLP under the Agreement in U.S. Dollars in respect of such Comparable
Project over the last *** quarters prior to the Stop Date, divided by ***, or
(b) the sum of the amounts paid to DLP under the Agreement in U.S. Dollars in
respect of such Comparable Project over the last *** quarters prior to the Stop
Date, divided by ***. Comparable Projects which were vested pursuant
to Paragraph 12 of the Agreement, but not opened to the general public, as of
the date which is three years prior to the Stop Date, will be valued at the date
that is three years after the opening date thereof, and the calculation of the
Applicable Base Payment with respect to such a Comparable Project will be made
as of such date, in an amount equal to the sum of the amounts paid to DLP under
the Agreement in U.S. Dollars in respect of such Comparable Project over the
last *** quarters prior to such date, divided by ***. DLP shall
continue to receive its quarterly compensation payments pursuant to Paragraph 11
of the Agreement on such Comparable Project until the Put Payment is made with
respect to such Comparable Project. DLP will not be entitled to any
further payments under the Agreement after the Put Payment.
Applicable
Discount Rate for a Comparable Project: The Applicable
Discount Rate for a Comparable Project will equal the most recent yield, prior
to the Stop Date, on the senior-most notes with a maturity closest to 10 years,
issued directly by the national government of the country where the Comparable
Project is located, as quoted by Bloomberg, or if unavailable, a similar source,
plus a risk premium of (i) *** percent if such Comparable Project is located
outside the United States or (ii) *** percent if such Comparable Project is
located in the United States.
Applicable Growth
Rate for a Comparable Project: The Applicable Growth Rate for
a Comparable Project will equal ***%.
Example Calculation –
Florida Project:
|
Hypothetical
Calculation Date
|
10/9/2009
|
|||
|
Applicable
Base Payment:
|
||||
|
Last
*** Quarters Payments to Diamond Lane
|
[$***]
|
|||
|
Divided
by ***
|
***
|
|||
|
Applicable
Base Payment for the Florida Project
|
[$***]
|
|||
|
Applicable
Discount Rate:
|
||||
|
Yield
on 10-Year U.S. Treasury Bond
|
[***%]
|
|||
|
Risk
Premium
|
6.5%
|
|||
|
Applicable
Discount Rate
|
***%
|
|||
|
Applicable
Growth Rate:
|
***%
|
|||
|
|
||||
|
Put
Payment Value:
|
||||
|
[$
***] *
|
(1+
***)
|
=
[$
***]
|
||
|
(***
– ***)
|
||||
Example Calculation –
Japan:
|
Hypothetical
Calculation Date
|
10/9/2009
|
|||
|
Applicable
Base Payment:
|
||||
|
Last
*** Quarters Payments to Diamond Lane in U.S. Dollars
|
[$***]
|
|||
|
Divided
by ***
|
***
|
|||
|
Applicable
Base Payment for Japan
|
[$***]
|
|||
|
Applicable
Discount Rate:
|
||||
|
Yield
on 10-year Japanese Government Bond
|
***%
|
|||
|
Risk
Premium
|
***%
|
|||
|
Applicable
Discount Rate
|
***%
|
|||
|
Applicable
Growth Rate:
|
***%
|
|||
|
Put
Payment Value:
|
||||
|
[$
***] *
|
(1+
***)
|
=
[$
***]
|
||
|
(***
– ***)
|
||||
-Appendix
A- -
Appendix
B
to
the Amendment
GUARANTEE
GUARANTEE
(this “Guarantee”), dated as of October 18, 2009, by NBC UNIVERSAL, INC., a
Delaware corporation (with its successors, the “Guarantor”) for the benefit of
Xxxxxx Xxxxxxxxx, in his personal capacity, and Diamond Lane Productions, Inc.,
a California corporation ("DLP" and, together with Xxxxxx Xxxxxxxxx, "Xxxxxx" or
the "Beneficiary").
WHEREAS,
under an Agreement, dated as of January 20, 1987, between Universal City
Development Partners, Ltd., a Florida limited partnership (as successor in
interest to Universal City Florida Partners, "UCDP") and Xxxxxx Xxxxxxxxx, as
amended and/or modified as of February 5, 2001, July 15, 2003 and March 30,
2006, and as being amended on the date hereof (collectively, the "Agreement"),
UCDP has certain payment obligations to DLP; and
WHEREAS,
Xxxxxx Xxxxxxxxx is obligated to provide his personal services to the
Partnership pursuant to the Agreement and, by letter dated January 27, 1989, has
directed that all payments to him by the Partnership under the Agreement be made
to DLP.
NOW,
THEREFORE, for consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantor is willing to enter into this Guarantee, and
therefore agrees as follows:
1. The
Guarantee. The Guarantor hereby guarantees, in accordance with the terms hereof,
to Xxxxxx the full and punctual payment when due under the Agreement of each
Guaranteed Obligation, as hereinafter defined. “Guaranteed Obligations” means
all amounts payable by UCDP to Xxxxxx pursuant to the terms of the
Agreement.
2.
Guarantee Terms. The Guarantor waives acceptance, demand, notice of acceptance,
and all other notices to which it may be entitled. No modification of the
Agreement and no indulgence or change in terms of performance under the
Agreement shall release the Guarantor from this guarantee. Xxxxxx xxx fail to
obtain or continue or perfect or continue the perfection of any security
interest or lien in any collateral or release any collateral from any lien or
any security interest without reducing or affecting the liability of the
Guarantor. Xxxxxx xxx proceed against it for payment of the Guaranteed
Obligations under the Agreement without taking any action against UCDP or any
other party, or proceeding against or applying any security Xxxxxx xxx hold. The
Guarantor consents to be joined as party to any arbitration conducted pursuant
to the Agreement and that judgment on any award in any such arbitration may be
enforced against the Guarantor in any court of competent
jurisdiction.
3. Demand
for Payment under Guarantee. Notwithstanding anything to the contrary herein, a
demand for payment against the Guarantor hereunder shall be made pursuant to the
following sequence of events and subject to the following procedures and
requirements:
(i)
First, 5 Business Days shall have expired after demand for payment upon UCDP is
made by Xxxxxx with notice to the Guarantor; the payment by UCDP shall then be
due under the Agreement and such payment shall not have been made by UCDP within
such 5- Business Day period;
(ii)
Second, after the expiration of the foregoing 5- Business Day period, an
additional 20 Business Days shall have expired after demand for payment upon
each of (i) Universal Studios, Inc. (as successor to MCA Inc. (in such capacity,
“Universal Studios”) under the Guarantee dated as of November 4, 1988 (the
“Original Guarantee”) executed by MCA Inc. and Cineplex Odeon Corporation
("Cineplex")), and (ii) Cineplex, is made by Xxxxxx, in each case, with notice
to the Guarantor; the payment by each of Universal Studios and Cineplex shall
then be due under the Original Guarantee, and such payment shall not have been
made by Universal Studios and/or Cineplex within such 20- Business Day period;
and
(iii)
Third, upon failure by UCDP, Universal Studios and/or Cineplex to pay amounts
equal to the Guaranteed Obligation in accordance with the foregoing clauses (i)
and (ii) and the expiration of the foregoing periods, the Guarantor shall,
within 20 Business Days after a subsequent written demand by Xxxxxx identifying
(x) the amount not so paid, (y) the applicable provisions of the Agreement which
provide for the payment and (z) the expiration of the time periods and
satisfaction of the requirements set forth in clauses (i) and (ii) above, pay
any such unpaid amounts to Xxxxxx at the place and in the manner specified in
the written demand.
As used
in this Section 3, "Business Day" means any day that is not a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to remain closed.
4. Xxxxxx
Agreement. Xxxxxx will give the Guarantor not less than 10 days’ prior written
notice of any written amendment to the Agreement which increases or advances
UCDP's payment obligations thereunder, provided that (a) the failure to give
such notice shall not void Guarantor’s obligation and (b) if Xxxxxx does not
give such notice, Guarantor’s Guaranteed Obligations hereunder shall not be
greater than its Guaranteed Obligations were without such
amendment.
5.
Subrogation. Upon Xxxxxx receiving payment in full of the Guaranteed Obligations
hereunder, the Guarantor shall be subrogated to, and Xxxxxx hereby assigns to
the Guarantor (without recourse or warranty, express or implied), Steven's
rights against UCDP and against any other party which shall have provided to
Xxxxxx a guaranty with respect to such Guaranteed Obligations, and Xxxxxx will,
at the sole expense of the Guarantor, execute and deliver to the Guarantor such
documents as the Guarantor shall reasonably request to evidence such subrogation
and assignment.
6.
Representations and Warranties. The Guarantor represents and warrants to the
Beneficiary that:
(a) the
Guarantor is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization;
(b) the
execution, delivery and performance by the Guarantor of this Guarantee are
within the Guarantor’s corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action;
(c) this
Guarantee has been duly executed and delivered by the Guarantor and constitutes
a legal, valid and binding obligation of the Guarantor, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law;
(d) the
execution, delivery and performance of this Guarantee (i) do not require any
consent or approval of, registration or filing with, or other action by, any
governmental authority, except such as have been obtained and are in full force
and effect, and (ii) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the Guarantor or any order
of any court or governmental authority.
7.
Notices. All notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail, or sent by telecopy, as follows: (i) if to the
Guarantor, to it at NBC Universal, Inc., 30 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX
00000, Attention of Xxxxxxx Xxxxxx Shibata, Executive Vice President, Financial
Planning and Analysis (Telecopier No. (000) 000-0000), with a copy to NBC
Universal, Inc., 30 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxx
Xxxxxx, Senior Vice President, Corporate & Transactions Law (Telecopier No.
(000) 000-0000) and (ii) if to Xxxxxx, at Gang Tyre Xxxxx and Xxxxx, Inc., 130 X
Xxxxx Xx., Xxxxxxx Xxxxx, XX 00000, Attention of Xxxxx Xxxxx and Xxxxxx Xxxxx,
Telecopier Nos. (telecopy to be sent to both numbers): (000) 000-0000 and (000)
000-0000, with a copy to Xxxxxxxxx, Xxxxxx and Xxxxxxxx, 11000 Xxxx Xxxxxxx
Xxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000-0000, Attention of Xxxxxx Xxxxxxxxx and
Xxxxxx Xxxxxx, Telecopier Nos. (telecopy to be sent to both numbers): (000)
000-0000 and (000) 000-0000. Each party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other party. All notices and other communications given in accordance with
the provisions of this Guarantee will be deemed to have been given on the date
of receipt.
8. No
Waiver. No failure or delay by either party in exercising any right, power or
privilege under this Guarantee shall operate as a waiver thereof by such party
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
9.
Amendments and Waivers. Any provision of this Guarantee may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
Beneficiary and the Guarantor.
10.
Successors and Assigns. This Guarantee shall be binding upon the Guarantor and
its successors and assigns, for the benefit of Xxxxxx and its successors and
permitted assigns, except that the Guarantor may not transfer or assign any or
all of its rights or obligations hereunder without the prior written consent of
Xxxxxx.
11.
Governing Law. This Guarantee shall be construed in accordance with and governed
by the law of the State of New York.
12.
Attorneys Fees. In the event either Xxxxxx or the Guarantor commences any
proceeding against the other party with respect to this Guarantee, the parties
agree that the prevailing party (as determined by the authority before whom such
proceeding is commenced) shall be entitled to recover reasonable attorneys' fees
and costs as may be incurred in connection therewith in addition to any such
other relief as may be granted.
13.
Counterparts. This Guarantee may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties hereto have caused this Guarantee to be duly
executed by their respective authorized officers as of the day and year first
above written.
NBC
UNIVERSAL, INC.
By: /s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Executive Vice President and Chief Financial Officer
Agreed to
and accepted as of the date
first
written above by:
/s/
Xxxxxx Xxxxxxxxx
XXXXXX
XXXXXXXXX
DIAMOND
LANE PRODUCTIONS, INC.
By:_/s/
Xxxxxx Xxxxxxxxx
Name:
Xxxxxx Xxxxxxxxx
Title:
President
Appendix
C to the Amendment
Universal
City Development Partners, Ltd.
Intercreditor
Agreement
Summary
of Principal Terms and Conditions
|
Certain
Definitions:
|
“Company”
means Universal City Development Partners, Ltd.
|
|
“First
Lien Obligations” means all obligations of the Company and any subsidiary
guarantor (a “Guarantor”) in respect of the Amended and Restated Credit
Agreement dated as of [_], 2009(the "Credit Agreement") together with any
interest swap agreement, letter of credit reimbursement agreement, cash
management agreement or other agreement related to customary bank products
(if and to the extent permitted under such Credit Agreement to be pari
passu therewith), and (subject to the limitations specified below) any
amendment, restatement or other modification thereof and any refinancing
thereof or replacement therefor (collectively, the “Senior Credit
Facility”)
|
|
|
“First
Lien Secured Parties” means the holders of the First Lien
Obligations.
|
|
|
“Second
Lien Obligations” means all obligations of the Company in respect of the
Florida Project, as defined in, and arising under the consulting agreement
dated as of January 20, 1987 between the Company and Xxxxxx Xxxxxxxxx (as
amended and in effect from time to time, subject to the limitations
specified below).
|
|
|
“Second
Lien Secured Parties” means the payee or payees of the Second Lien
Obligations from time to time.
|
|
|
“Secured
Parties” means the First Lien Secured Parties and Second Lien Secured
Parties, collectively, and “Secured Party” means any one of
them.
|
|
|
Priority
of Liens/Prohibition on Contesting Liens:
|
So
long as any of the First Lien Obligations are outstanding, the liens
securing the Second Lien Obligations shall be junior and subordinated in
all respects to the liens securing the First Lien Obligations. No Secured
Party shall contest the priority, validity or enforceability of any lien
held by or on behalf of any other Secured Party. The Intercreditor
Agreement shall recite that the liens securing the Second Lien Obligations
shall be subordinated only to (i) the liens securing the First Lien
Obligations, (ii) liens permitted by and prior to the First Lien
Obligations, (iii) liens permitted under the Senior Credit Facility as
incremental secured debt with respect to all outstanding term loans, first
lien notes and indebtedness pursuant to any second lien facility
(collectively, the "Incremental Obligations") and (iv) liens that have
priority by law, and to no other liens. The Intercreditor Agreement will
provide that the First Lien Obligations and the Incremental Obligations
will not be incurred in an aggregate amount in excess of the Secured Debt
Limit (as defined below).
|
|
No
New Liens/Similar Liens:
|
The
Collateral securing the First Lien Obligations and the Collateral securing
the Second Lien Obligations shall be identical insofar as such Collateral
is comprised of tangible personal and real property owned by the Company,
but the Collateral for the Second Lien Obligations excludes other types or
forms of Collateral granted to secure the First Lien Obligations,
including the Company's intellectual property. The liens with respect to
the Collateral securing the First Lien Obligations and the Second Lien
Obligations shall be granted pursuant to separate security documentation.
So long as any of the First Lien Obligations are outstanding, neither the
Company nor any of its subsidiaries shall (i) grant or permit any
additional liens on any asset or property to secure the Second Lien
Obligations unless it has granted a senior lien on such assets or property
to secure the First Lien Obligations, or (ii) grant or permit any
additional liens on any asset or property in the applicable asset classes
to secure the First Lien Obligations unless it has granted a junior lien
on such assets or property to secure the Second Lien Obligations, other
than with respect to assets or property as to which the Company may be
prohibited from granting a junior lien to secure the Second Lien
Obligations.
|
|
Enforcement:
|
After
the expiration of the Standstill Period (180 days from the date of a
default under the First Lien Obligations and the Second Lien Obligations
which has continued beyond the expiration of all applicable grace or cure
periods, if any), the Second Lien Secured Parties may exercise any of
their rights or remedies with respect to the Collateral unless the First
Lien Secured Parties shall have commenced and be diligently pursuing the
exercise of any of their rights or remedies with respect to the
Collateral.
|
|
Application
of Proceeds/Turn-over:
|
So
long as any of the First Lien Obligations are outstanding, any Collateral
or the proceeds thereof received in connection with the sale or other
disposition of such Collateral in connection with the exercise of remedies
shall be applied to the First Lien Obligations, and any Collateral and the
proceeds thereof received by any Second Lien Secured Party in
contravention of the Intercreditor Agreement shall be segregated and held
in trust and shall be applied to the First Lien Obligations. To the extent
permitted by law, once proceeds received in connection with the sale or
other disposition of such Collateral in connection with the exercise of
remedies have been applied to fully satisfy any prior obligations, any
excess proceeds (if any) received in connection therewith shall be applied
to the Second Lien Obligations, up to the amount of such Second Lien
Obligations.
|
|
Releases
and Subordination:
|
In
the event that the First Lien Secured Parties release their lien on all or
any portion of Collateral (each, a “Release”) in connection with (i) the
enforcement or exercise of any rights or remedies on behalf of the First
Lien Secured Parties in respect of the Collateral or (ii) any sale or
other disposition of any Collateral permitted under the Senior Credit
Facility, the comparable lien in respect of the Second Lien Obligations
shall be automatically released.
In
addition, in the event that the First Lien Secured Parties release or
subordinate their lien on all or any portion of Collateral in connection
with any other transaction (including any third party capital lease
financing) permitted under the Senior Credit Facility, the comparable lien
in respect of the Second Lien Obligations shall be automatically released
or subordinated, as applicable.
The
security documentation executed in connection with the Second Lien
Obligations shall state that, in the event of the refinancing of any of
the First Lien Obligations, the lien of such security documentation
executed in connection with such Second Lien Obligations shall
automatically be subordinated to the lien of any new security
documentation executed in connection with such refinanced First Lien
Obligations. The Second Lien Secured Parties shall execute a subordination
agreement confirming such subordination (but no failure to execute such a
subordination agreement shall affect the validity or enforceability of
such subordination) as well as an Intercreditor Agreement with the new
First Lien Secured Parties similar to the Intercreditor Agreement
contemplated hereby.
The
Second Lien Secured Parties shall execute an irrevocable, unconditional
and recordable General Power of Attorney in favor of the First Lien
Secured Parties (or in favor of their Agent), pursuant to which the Second
Lien Secured Parties shall authorize the First Lien Secured Parties (or
their Agent) to execute and record, in the name and on behalf of the
Second Lien Secured Parties, such a release and/or subordination each time
that the First Lien Secured Parties execute and record a similar such
release and/or subordination.
|
|
Amendments
to Loan Documents:
|
The
Intercreditor Agreement will restrict amendments to (i) the Senior Credit
Facility, but only if the same would result in the maximum principal
amount of term loans and revolving commitments thereunder and any
Incremental Obligations permitted thereunder exceeding an amount equal to
the greater of $975 million and an amount equal to the product of 3.75
times the EBITDA of the Company (determined at the time of incurrence of
any such term loans or at the time of increasing any such revolving
commitments, or at the time of incurring any such Incremental Obligations,
as the case may be, with "EBITDA" being defined in and calculated pursuant
to the relevant provisions of Senior Credit Facility) (such requirement,
the "Secured Debt Limit"), and (ii) the Second Lien Obligations which
would increase amounts payable thereunder, accelerate the time for payment
of amounts due thereunder or otherwise materially increase the obligations
of the Loan Parties thereunder or disadvantage the holders of the First
Lien Obligations, except as specifically permitted. Amendments to the
Second Lien Obligations that affect payments due or potentially due more
than six months after the maturity of the loans under the Senior Credit
Facility would be permitted and any amendments to or waivers of the
security documentation for the First Lien Obligations would automatically
apply to any parallel provisions of the security documentation for the
Second Lien Obligations, subject to customary
exceptions.
|
|
Rights
As Unsecured Creditors:
|
Except
as otherwise set forth in “Enforcement” above, the Second Lien Secured
Parties may exercise rights and remedies as unsecured creditors against
the Company.
|
|
Bankruptcy:
|
DIP
Financing: In the event of an insolvency or liquidation proceeding of the
Company or any Guarantor, whether voluntary or involuntary, if the First
Lien Secured Parties desire to permit the use of cash collateral or to
permit the Company to obtain any post-petition financing (a “DIP
Financing”), then the Second Lien Secured Parties will not object to such
use of such cash collateral or any liens securing a DIP Financing and, to
the extent the liens securing the First Lien Obligations are subordinated
or pari passu with such DIP Financing, the liens securing the Second Lien
Obligations shall be subordinated to the liens securing such DIP Financing
(and all obligations relating thereto). The Second Lien Secured Parties do
not otherwise waive any of their rights under applicable insolvency or
liquidation law.
Automatic
Stay: So long as any of the First Lien Obligations are outstanding, the
Second Lien Secured Parties shall not seek relief from the automatic stay
or any other stay in any bankruptcy proceeding in respect of the
Collateral, without the prior written consent of the First Lien Secured
Parties.
Adequate
Protection: The Second Lien Secured Parties shall not contest (or support
any other person contesting) (a) any request by the First Lien Secured
Parties for adequate protection or (b) any objection by the First Lien
Secured Parties to any motion, relief, action or proceeding based on the
First Lien Secured Parties or the Agent on their behalf claiming a lack of
adequate protection; provided, that if the First Lien Secured Parties are
granted adequate protection in the form of additional collateral in
connection with any DIP Financing or use of cash collateral, then the
Second Lien Secured Parties or the Agent on their behalf may seek or
request adequate protection in the form of a lien on such additional
collateral, which lien will be subordinated to the liens securing the
First Lien Obligations and such DIP Financing.
Voting
for Plan of Reorganization: The First Lien Secured Parties and the Second
Lien Secured Parties shall be entitled to vote as a separate class on any
plan of reorganization in connection with any bankruptcy
proceeding.
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