Common use of Continuing Operations Clause in Contracts

Continuing Operations. (a) Subject to approval of the Representatives as and to the extent hereinafter provided, the Manager shall be responsible for supervision of the winding up of the construction phase of Project 2, including without limitation supervising the completion of punch list items and enforcement of guarantees, but Manager will not be a guarantor of the construction activities nor responsible for defects therein. The Representatives approved a "Claims Budget" of $25,000,000, including contract balances, to deal with the pending and anticipated contract balances and claims from the winding up of the construction Phase of Project 2 ("Claims"). In connection with the resolution of such Claims, Manager shall be obligated to secure the approval of the Representatives before spending in excess of $1,000,000 to settle or resolve any Claim or group of Claims within any 30 day period. Manager shall consult with the Representatives as to the timing of any payments required to settle such Claims and shall secure the approval of its Representatives of any settlement or resolution of Claims that calls for disbursement of more than $1,000,000 within any 30 day period. Any changes to the Claims Budget shall require the consent of the Representatives, and Manager shall not exceed the Claims Budget in settling or resolving Claims. Manager shall provide the Representatives with quarterly reports on the status of the Claims and its efforts to resolve them and such other information with respect thereto as they may request. The Manager shall, with respect to the Combined Project, propose to the Representatives for their approval annual operating plans, annual operating budgets, annual capital expenditure plans, and annual capital expenditure budgets for each of Project I and Project 2. Each budget (of whatever type) shall include a 10% contingency factor. The Manager shall also propose to the Representatives for their approval the procedures to be followed by the Partnership in selecting contractors to be engaged by the Partnership. Subject to compliance with the aforesaid approved budgets and with the remaining provisions of this Section 13 and with Section 14, the day-to-day operation and control of the Combined Project will be performed by the Manager and without derogating from the generality of the foregoing, the Manager shall select the persons and entities to be engaged and employed in the operation of the Combined Project, cause the Partnership to enter into any and all contracts relating to the operation of the Combined Project, supervise the persons and entities rendering services in connection with the Combined Project, terminate personnel and contractors. The various facilities and attractions included in Gate I are, in the aggregate, classified as a single "Business Unit"; the various components of the Studio are, in the aggregate, classified as a single "Business Unit"; the facilities and areas of Project 1 which are not encompassed within Gate I or the Studio are, in the aggregate, classified as a single "Business Unit" but to the extent any such facilities and areas are incorporated into another Business Unit, such facilities and areas shall be treated as part of the Business Unit into which they are incorporated; the various facilities and attractions included in Gate 2 are, in the aggregate, classified as a single "Business Unit"; similarly, the various facilities and attractions included in City Walk are, in the aggregate, classified as another single "Business Unit". As later phases in the development of land in the Beyond Gate 2 Area are reached, the Representatives, applying the same principles which are inherent in the previously defined examples of Business Units, shall determine which other facilities and attractions constitute other separate Business Units. Manager shall have the right to transfer budgetary funds within an approved budget (other than the Claims Budget) from one category to another pertaining to a Business Unit and its related activities, to make reasonable changes in operating and capital plans and to take such other actions as the owner of a business might reasonably do. Notwithstanding the foregoing any contract with an estimated cost in excess of $1,000,000 (subject to CPI Escalation) shall be subject to the approval of the Representatives and contracts having an estimated cost not in excess of said sum shall not require the prior approval of the Representatives provided such contracts have been entered into in a manner consistent with, and are consistent with, the above described approved selection procedures and the above described plans and budgets (with the above described permitted changes). Furthermore, any contracts having an estimated cost of less than $50,000 (subject to CPI Escalation) may be entered into by the Manager without compliance with the requirements specified in the prior sentence, but after reasonable attempts to consult with the Representatives, provided the estimated cost thereof does not cause the budget applicable to the particular Business Unit, including the contingency amount therein, to be exceeded. (b) Notwithstanding Subsection (a) above, the following actions shall be subject to the approval of the Representatives: (i) the addition, substantial modification (including a substantial change in the basic show concept or basic show elements) or deletion of a Major Facility from any plan or from the Combined Project; (ii) authorizing expenditures in excess of the totals provided for in approved budgets except for: (A) increases reasonably necessitated by increases in the volume of business; (B) any emergency situation not contemplated by the approved plans or approved budgets (including the contingency factors already included therein) provided the estimated cost of dealing with the particular emergency situation does not exceed $50,000 (and in this regard, the Manager shall make reasonable efforts to consult with the Representatives); and (C) the right of the Manager as above specified to transfer budgetary funds from one category to another within a Business Unit, such as within Gate 1 (but not between the budgets for separate Business Units); and (iii) entering into corporate sponsorship deals or making changes in existing corporate sponsorship deals which changes are either material to the particular deal or have a financial impact value at the time in excess of $50,000. Each reference above in this Subsection (b) to $50,000 shall be subject to CPI Escalation; and (iv) changing the name of the Combined Project, Project I or Project 2 to eliminate the use of the words "Universal" or "Universal Studios"; provided, however, that this provision shall not be applicable after the earliest to occur of(i) July 27, 2015, (ii) a change of control (whether by merger, acquisition, consolidation or other business combination) of UniCo Parent or Universal Parent or any direct or indirect parent entity of UniCo Parent or Universal Parent, on the one hand, or the Blackstone Partners (except with respect to the Blackstone Partners, a change of control permitted by Section 21(b) of the Second Amended and Restated Agreement of General Partnership of Holding I (the "Holding I Agreement") or Section 21(b) of the Second Amended and Restated Agreement General Partnership of Holding II (the "Holding II Agreement")), (iii) an Authorized UniCo Transaction (as defined in the Holding I Agreement) or (iv) any withdrawal by the Blackstone Partners as a partner in Holding I or Holding II, or any sale, transfer or assignment by the Blackstone Partners of their respective interest in Holding I or Holding II, whether pursuant to Section 2 of the Partners' Agreement or otherwise, except for any such sale, transfer or assignment permitted by Section 21(b) of the Holding I Agreement or Section 21(b) of the Holding II Agreement and any such withdrawal by the Blackstone Partners in connection therewith. (c) Notwithstanding the authorization for the Manager, without Representative approval, to add, modify, or delete shows and rides, to modify Major Facilities, to make changes, deletions and the like in plans and budgets, and to transfer budgetary funds from one category to another, the Manager shall notify and shall make reasonable attempts to consult with the Representatives or the Partners in advance of any of the following: (i) any transfer which results in the transfer of an aggregate of $250,000 or more of budgetary funds relating to a specific show or ride; (ii) any transfer which results in the transfer of an aggregate of $500,000 or more of budgetary funds relating to any specific matter other than a show or ride; and (iii) any modification (or contemporaneously contemplated series of modifications) of a specific Major Facility which will cost $500,000 or more. Each of the dollar amounts specified in (i), (ii), and (iii) above is subject to CPI Escalation. (d) If, after making all reasonable efforts to do so, the Representatives cannot agree upon any matter which pursuant to the other provisions of this Agreement require the approval of the Representatives, the Manager will have the right to continue the activities of the Partnership related to the Combined Project, including without limitation, operation of Project 1 and Project 2 in accordance with then existing levels, plans, and modes, and, without derogating from the generality of the foregoing, the Manager would under these circumstances be authorized to cause the Partnership to spend for new facilities and/or attractions in accordance with prior historical practice at Project 2 and at each Business Unit within Project 1, as the case may be; but the foregoing shall not excuse compliance by the Manager with the specific requirements for Representative approval relating to the inclusion, addition, substantial modification or deletion of Major Facilities as specified above. (e) The Manager will keep the Representatives promptly and fully advised of all information relating to its management activities. The designees of those Representatives which are not affiliates of the entity which designated the Manager will be in frequent contact and consultation with the Manager concerning the Manager's activities. (f) The Manager will utilize the expertise and buying strength of the Blackstone Partners, UniCo Parent, Universal Parent, the Holding II Partners and their respective affiliates (and such entity will act as buyer on behalf of the Partnership) whenever doing so could reasonably be expected to result in economies to the Partnership and such entity will advise the Manager on an advance basis of those products and services with respect to which such entity believes it has such expertise and buying strength. (g) The personnel employed by the Manager (or loaned to it by any affiliated entity) must be experienced in outdoor recreation and/or studio matters, or, if applicable, in other relevant specialties. (h) Whenever equipment and supplies which otherwise meet the requirements of the Manager for use in the Combined Project are offered to the Partnership by, or can be obtained by, the Blackstone Partners, UniCo Parent, Universal Parent, any Holding II Partner, or their respective affiliates, the Partnership shall obtain such items from the offering entity or its affiliates provided the transaction is on terms no less favorable to the Partnership than would be available from a third person.

Continuing Operations. (a) Subject to approval of the Representatives as and to the extent hereinafter provided, the Manager shall be responsible for supervision of the winding up of the construction phase of Project 2, including without limitation supervising the completion of punch list items and enforcement of guarantees, but Manager will not be a guarantor of the construction activities nor responsible for defects therein. The Representatives approved a "“Claims Budget" ” of $25,000,000, including contract balances, to deal with the pending and anticipated contract balances and claims from the winding up of the construction Phase of Project 2 ("“Claims"”). In connection with the resolution of such Claims, Manager shall be obligated to secure the approval of the Representatives before spending in excess of $1,000,000 to settle or resolve any Claim or group of Claims within any 30 day period. Manager shall consult with the Representatives as to the timing of any payments required to settle such Claims and shall secure the approval of its Representatives of any settlement or resolution of Claims that calls for disbursement of more than $1,000,000 within any 30 day period. Any changes to the Claims Budget shall require the consent of the Representatives, and Manager shall not exceed the Claims Budget in settling or resolving Claims. Manager shall provide the Representatives with quarterly reports on the status of the Claims and its efforts to resolve them and such other information with respect thereto as they may request. The Manager shall, with respect to the Combined Project, propose to the Representatives for their approval annual operating plans, annual operating budgets, annual capital expenditure plans, and annual capital expenditure budgets for each of Project I and Project 2. Each budget (of whatever type) shall include a 10% contingency factor. The Manager shall also propose to the Representatives for their approval the procedures to be followed by the Partnership in selecting contractors to be engaged by the Partnership. Subject to compliance with the aforesaid approved budgets and with the remaining provisions of this Section 13 and with Section 14, the day-to-day operation and control of the Combined Project will be performed by the Manager and without derogating from the generality of the foregoing, the Manager shall select the persons and entities to be engaged and employed in the operation of the Combined Project, cause the Partnership to enter into any and all contracts relating to the operation of the Combined Project, supervise the persons and entities rendering services in connection with the Combined Project, terminate personnel and contractors. The various facilities and attractions included in Gate I are, in the aggregate, classified as a single "“Business Unit"”; the various components of the Studio are, in the aggregate, classified as a single "“Business Unit"”; the facilities and areas of Project 1 which are not encompassed within Gate I or the Studio are, in the aggregate, classified as a single "“Business Unit" ” but to the extent any such facilities and areas are incorporated into another Business Unit, such facilities and areas shall be treated as part of the Business Unit into which they are incorporated; the various facilities and attractions included in Gate 2 are, in the aggregate, classified as a single "“Business Unit"”; similarly, the various facilities and attractions included in City Walk are, in the aggregate, classified as another single "“Business Unit"”. As later phases in the development of land in the Beyond Gate 2 Area are reached, the Representatives, applying the same principles which are inherent in the previously defined examples of Business Units, shall determine which other facilities and attractions constitute other separate Business Units. Manager shall have the right to transfer budgetary funds within an approved budget (other than the Claims Budget) from one category to another pertaining to a Business Unit and its related activities, to make reasonable changes in operating and capital plans and to take such other actions as the owner of a business might reasonably do. Notwithstanding the foregoing any contract with an estimated cost in excess of $1,000,000 (subject to CPI Escalation) shall be subject to the approval of the Representatives and contracts having an estimated cost not in excess of said sum shall not require the prior approval of the Representatives provided such contracts have been entered into in a manner consistent with, and are consistent with, the above described approved selection procedures and the above described plans and budgets (with the above described permitted changes). Furthermore, any contracts having an estimated cost of less than $50,000 (subject to CPI Escalation) may be entered into by the Manager without compliance with the requirements specified in the prior sentence, but after reasonable attempts to consult with the Representatives, provided the estimated cost thereof does not cause the budget applicable to the particular Business Unit, including the contingency amount therein, to be exceeded. (b) Notwithstanding Subsection (a) above, the following actions shall be subject to the approval of the Representatives: (i) the addition, substantial modification (including a substantial change in the basic show concept or basic show elements) or deletion of a Major Facility from any plan or from the Combined Project; (ii) authorizing expenditures in excess of the totals provided for in approved budgets except for: (A) increases reasonably necessitated by increases in the volume of business; (B) any emergency situation not contemplated by the approved plans or approved budgets (including the contingency factors already included therein) provided the estimated cost of dealing with the particular emergency situation does not exceed $50,000 (and in this regard, the Manager shall make reasonable efforts to consult with the Representatives); and (C) the right of the Manager as above specified to transfer budgetary funds from one category to another within a Business Unit, such as within Gate 1 (but not between the budgets for separate Business Units); and (iii) entering into corporate sponsorship deals or making changes in existing corporate sponsorship deals which changes are either material to the particular deal or have a financial impact value at the time in excess of $50,000. Each reference above in this Subsection (b) to $50,000 shall be subject to CPI Escalation; and (iv) changing the name of the Combined Project, Project I or Project 2 to eliminate the use of the words "“Universal" ” or "“Universal Studios"”; provided, however, that this provision shall not be applicable after the earliest to occur of(i) July 27, 2015, (ii) a change of control (whether by merger, acquisition, consolidation or other business combination) of UniCo Parent or Universal Parent or any direct or indirect parent entity of UniCo Parent or Universal Parent, on the one hand, or the Blackstone Partners (except with respect to the Blackstone Partners, a change of control permitted by Section 21(b) of the Second Amended and Restated Agreement of General Partnership of Holding I (the "“Holding I Agreement"”) or Section 21(b) of the Second Amended and Restated Agreement General Partnership of Holding II (the "“Holding II Agreement"”)), (iii) an Authorized UniCo Transaction (as defined in the Holding I Agreement) or (iv) any withdrawal by the Blackstone Partners as a partner in Holding I or Holding II, or any sale, transfer or assignment by the Blackstone Partners of their respective interest in Holding I or Holding II, whether pursuant to Section 2 of the Partners' ’ Agreement or otherwise, except for any such sale, transfer or assignment permitted by Section 21(b) of the Holding I Agreement or Section 21(b) of the Holding II Agreement and any such withdrawal by the Blackstone Partners in connection therewith. (c) Notwithstanding the authorization for the Manager, without Representative approval, to add, modify, or delete shows and rides, to modify Major Facilities, to make changes, deletions and the like in plans and budgets, and to transfer budgetary funds from one category to another, the Manager shall notify and shall make reasonable attempts to consult with the Representatives or the Partners in advance of any of the following: (i) any transfer which results in the transfer of an aggregate of $250,000 or more of budgetary funds relating to a specific show or ride; (ii) any transfer which results in the transfer of an aggregate of $500,000 or more of budgetary funds relating to any specific matter other than a show or ride; and (iii) any modification (or contemporaneously contemplated series of modifications) of a specific Major Facility which will cost $500,000 or more. Each of the dollar amounts specified in (i), (ii), and (iii) above is subject to CPI Escalation. (d) If, after making all reasonable efforts to do so, the Representatives cannot agree upon any matter which pursuant to the other provisions of this Agreement require the approval of the Representatives, the Manager will have the right to continue the activities of the Partnership related to the Combined Project, including without limitation, operation of Project 1 and Project 2 in accordance with then existing levels, plans, and modes, and, without derogating from the generality of the foregoing, the Manager would under these circumstances be authorized to cause the Partnership to spend for new facilities and/or attractions in accordance with prior historical practice at Project 2 and at each Business Unit within Project 1, as the case may be; but the foregoing shall not excuse compliance by the Manager with the specific requirements for Representative approval relating to the inclusion, addition, substantial modification or deletion of Major Facilities as specified above. (e) The Manager will keep the Representatives promptly and fully advised of all information relating to its management activities. The designees of those Representatives which are not affiliates of the entity which designated the Manager will be in frequent contact and consultation with the Manager concerning the Manager's ’s activities. (f) The Manager will utilize the expertise and buying strength of the Blackstone Partners, UniCo Parent, Universal Parent, the Holding II Partners and their respective affiliates (and such entity will act as buyer on behalf of the Partnership) whenever doing so could reasonably be expected to result in economies to the Partnership and such entity will advise the Manager on an advance basis of those products and services with respect to which such entity believes it has such expertise and buying strength. (g) The personnel employed by the Manager (or loaned to it by any affiliated entity) must be experienced in outdoor recreation and/or studio matters, or, if applicable, in other relevant specialties. (h) Whenever equipment and supplies which otherwise meet the requirements of the Manager for use in the Combined Project are offered to the Partnership by, or can be obtained by, the Blackstone Partners, UniCo Parent, Universal Parent, any Holding II Partner, or their respective affiliates, the Partnership shall obtain such items from the offering entity or its affiliates provided the transaction is on terms no less favorable to the Partnership than would be available from a third person.