1
USA NETWORKS
PARTNERSHIP INTEREST PURCHASE AGREEMENT
by and among
UNIVERSAL STUDIOS, INC.
UNIVERSAL CITY STUDIOS, INC.
VIACOM INC.
VIACOM INTERNATIONAL INC.
and
EIGHTH CENTURY CORPORATION
----------------
Dated as of
September 22, 1997
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TABLE OF CONTENTS
Page
Number
ARTICLE 1
Certain Definitions
Section 1.1 Specific Definitions......................................... 1
Section 1.2 Other Terms.................................................. 4
ARTICLE 2
Actions To Be Taken Following Execution
Section 2.1 Announcement................................................. 4
Section 2.2 Suspension of Litigation..................................... 5
Section 2.3 Program Licensing Agreement; Satellite Subleases............. 5
Section 2.4 Disposition of Confidential Materials........................ 6
ARTICLE 3
Purchase of Partnership Interest; Closing
Section 3.1 Purchase..................................................... 6
Section 3.2 Redemption or Purchase of Viacom Interest in Sci-Fi
Europe......................................... 7
Section 3.3 Undistributed Current Year Partnership Earnings.............. 7
Section 3.4 Delivery of Purchase Price................................... 7
Section 3.5 Litigation Releases.......................................... 8
Section 3.6 Vacatur Application.......................................... 8
Section 3.7 Time and Place of Closing.................................... 8
ARTICLE 4
Representations and Warranties of the Universal Parties
Section 4.1 Incorporation; Authorization; No Conflict; etc............... 8
Section 4.2 Consents and Approvals....................................... 9
Section 4.3 Brokers, Finders, etc........................................ 9
Section 4.4 Investment Intent............................................ 9
Section 4.5 Financing.................................................... 9
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ARTICLE 5
Representations and Warranties of the Viacom Parties
Section 5.1 Incorporation; Authorization; No Conflict; etc............... 9
Section 5.2 No Encumbrances..............................................10
Section 5.3 Consents and Approvals.......................................10
Section 5.4 Brokers, Finders, etc........................................10
ARTICLE 6
Covenants
Section 6.1 Conduct of Business of the Partnership.......................11
Section 6.2 Obligations of Viacom........................................11
Section 6.3 Efforts; Obtaining Consents; Further Assurances..............11
Section 6.4 Public Announcements.........................................12
Section 6.5 Non-Solicitation of Employees................................12
Section 6.6 Tax Allocation...............................................12
Section 6.7 Partnership Tax Election.....................................12
Section 6.8 Tax Matters ...............................................13
Section 6.9 Indemnification..............................................13
Section 6.10 Ongoing Obligation of Confidentiality........................13
Section 6.11 Non-Registration of Trademarks...............................14
ARTICLE 7
Non-Competition
Section 7.1 Non-Competition..............................................14
ARTICLE 8
Post-Closing Payment of Undistributed
Pre-Closing Partnership Earnings
Section 8.1 Post-Closing Payment.........................................18
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ARTICLE 9
Conditions
Section 9.1 Mutual Conditions............................................19
Section 9.2 Conditions of the Universal Parties' Obligation to Close.....19
Section 9.3 Conditions of the Viacom Parties' Obligation to Close........20
ARTICLE 10
Termination
Section 10.1 Termination ...............................................20
Section 10.2 Procedure and Effect of Termination..........................21
ARTICLE 11
Miscellaneous
Section 11.1 Expenses ....................................................21
Section 11.2 Notices, Etc. ...............................................21
Section 11.3 Amendment....................................................22
Section 11.4 Waiver; Effect of Waiver.....................................22
Section 11.5 Successors and Assigns.......................................22
Section 11.6 Survival of Representations, Warranties, Covenants
and Agreements...........................................23
Section 11.7 Specific Performance.........................................23
Section 11.8 Entire Agreement.............................................23
Section 11.9 Viacom Released from Joint Venture Agreement.................23
Section 11.10 Interpretation; Absence of Presumption.......................23
Section 11.11 Headings.....................................................24
Section 11.12 Severability.................................................24
Section 11.13 Remedies Cumulative..........................................24
Section 11.14 Time of the Essence..........................................24
Section 11.15 Governing Law................................................24
Section 11.16 Counterparts.................................................24
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Exhibits
A. Press Releases
B. Letter to Court
C. Litigation Releases
D. Stipulation of Dismissal
E. Letter Requesting Resumption of Proceedings
F. Terms and Conditions for Programming License Agreement
G. Terms and Conditions for Satellite Capacity Subleases
H. Programming Rights Embodied in Non-Executed Agreements
I. Certain Trade Marks, Service Marks and Logos
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THIS PARTNERSHIP INTEREST PURCHASE AGREEMENT (this
"Agreement"), dated as of September 22, 1997, is by and among Universal Studios,
Inc., a Delaware corporation ("Universal"), Universal City Studios, Inc., a
Delaware corporation and a wholly owned subsidiary of Universal ("UCS"), Viacom
Inc., a Delaware corporation ("Viacom"), Viacom International Inc., a Delaware
corporation ("Viacom International"), and Eighth Century Corporation, a Delaware
corporation and an indirect wholly owned subsidiary of Viacom ("ECC").
WHEREAS, one or more of the Universal Parties (as defined
herein), on the one hand, and one or more of the Viacom Parties (as defined
herein), on the other, are the sole partners (together, the "Partners"), each
having in the aggregate 50% of the interest in USA Networks, an unincorporated
joint venture established as a partnership under the laws of the State of New
York (the "Partnership"), and collectively having 100% of such interests; and
WHEREAS, the Partnership has been engaged in the business of
operating television programming services since 1981, and currently operates the
USA Network and the Sci-Fi Channel; and
WHEREAS, Universal and UCS (together, the "Universal
Parties"), on the one hand, and Viacom, Viacom International and ECC (together,
the "Viacom Parties"), on the other, have certain claims against each other as
articulated in the Litigation (as defined herein); and
WHEREAS, the parties hereto desire to terminate the Litigation
and, in connection therewith, desire that ECC sell to Universal, and that
Universal purchase from ECC, all of the Viacom Partnership Interests (as defined
herein), and that the Viacom Parties terminate their participation in the
Partnership, as more fully provided for herein;
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE 1
Certain Definitions
Section 1.1 Specific Definitions. As used in this Agreement
the following terms shall have the following respective meanings:
"Affiliate" shall mean, with respect to any person, any other
person that directly, or through one or more intermediaries, controls or is
controlled by or is under common control
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with such first person, and, if such a person is an individual, any member of
the immediate family (including parents, spouse and children) of such individual
and any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any person who is controlled by any such
member or trust; provided that no Universal Party shall be deemed to be an
Affiliate of any Viacom Party or, prior to the Closing, of the Partnership, and
no Viacom Party shall be deemed to be an Affiliate of any Universal Party or the
Partnership, in each case by virtue of any such person's participation in the
Partnership. As used in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise).
"Agreement" shall have the meaning set forth in the first
paragraph hereof.
"Applicable Law" shall mean all applicable provisions of all
(a) constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances or codes of any Governmental Authority, and (b) orders,
decisions, injunctions, judgments, awards and decrees of or agreements with any
Governmental Authority.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day in which banking institutions in New York are
authorized or obligated by law or executive order to close. Any event the
scheduled occurrence of which would fall on a day which is not a Business Day
shall be deferred until the next succeeding Business Day.
"Closing" shall mean the consummation of the Purchase, which
shall occur as soon as practicable following, and in any event within three
Business Days of, the first date on which all of the conditions to Closing
hereunder (other than those to be performed or determined as of the Closing)
shall have been satisfied or waived.
"Closing Date" shall mean the date on which the Closing
occurs.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.
"Communications Act" shall mean the Communications Act of
1934, as amended.
"Confidential Materials" and "Designating Party" shall have
the same meanings as in the Stipulation and Order Governing the Protection and
Exchange of Confidential Information signed by the parties to the Litigation and
dated May 31, 1996. "Confidential Materials" shall include all documents and
other materials produced or created in connection with the Litigation bearing
the legend "Confidential" and/or "Confidential/Counsel Only", except to the
extent they have become public or are otherwise no longer confidential without
the fault of any party seeking to use such Confidential Material.
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"ECC" shall have the meaning set forth in the first paragraph
of this Agreement.
"Encumbrances" shall mean mortgages, liens, encumbrances,
security interests, covenants, conditions, restrictions, claims, charges,
options, rights of first refusal, rights of use or occupancy or other legal or
equitable encumbrances and any other matters affecting title or any other
interest in property (including, in the case of real property, rights-of-way,
easements, and encroachments).
"Estimated Allocable Current Year Earnings" shall mean that
portion of the Partnership's Undistributed Current Year Earnings allocable to
ECC's account as determined in good faith by the management of the Partnership
based on the most recent monthly year-to-date financial statements prepared by
the management of the Partnership and on such management's good faith estimate
of financial results for any additional period prior to the Closing.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Government Authority" shall mean any nation or government,
any state or other political subdivision thereof, any person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including any government authority, agency,
department, board, commission or instrumentality of the United States, any State
of the United States or any political subdivision thereof, and any tribunal or
arbitrator(s) of competent jurisdiction, and any self-regulatory organization.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
"Joint Venture Agreement" shall mean that certain Amended and
Restated Joint Venture Agreement among Time Video Holdings Inc., Eighth Century
Corporation and MCA Cable Services, Inc., as amended from time to time.
"Litigation" shall mean (i) that certain action in the Court
of Chancery of the State of Delaware in and for New Castle County styled
Universal Studios Inc. v. Viacom Inc., et al. C.A. No. 14971, and (ii) that
certain action in the Court of Chancery of the State of Delaware in and for New
Castle County styled Viacom International Inc., et al., v. The Seagram Company
Ltd., et al., C.A. No. 14973, together.
"Litigation Releases" shall mean the releases by and between
the Universal Parties and the Viacom Parties, true and complete copies of which
are attached as Exhibit C.
"person" shall mean any individual, corporation, partnership,
joint venture, trust, unincorporated organization, other form of business or
legal entity or Government Authority.
"Sci-Fi Europe" shall mean Sci-Fi Channel Europe, L.L.C., a
limited liability company organized under the laws of the State of Delaware.
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"Sci-Fi Europe Stock" shall mean the membership interests of
Sci-Fi Europe.
"Undistributed Current Year Earnings" shall mean earnings of
the Partnership (increased by any net earnings and decreased by any net loss of
Sci-Fi Europe) in respect of all financial periods commencing after December 31,
1996 through the Closing Date (such earnings to be determined as if the fiscal
year of the Partnership and of Sci-Fi Europe had begun on January 1, 1997 and
had ended on the Closing Date) and which have not theretofore been distributed
by or contributed to the Partnership or Sci-Fi Europe.
"Universal" shall have the meaning set forth in the first
paragraph of this Agreement.
"Universal Broker" shall have the meaning set forth in Section
4.3.
"Universal Parties" shall have the meaning set forth in the
recitations.
"Universal Sci-Fi Europe Stock" shall mean all of the Sci-Fi
Europe Stock owned by Universal or any of its Affiliates.
"Viacom" shall have the meaning set forth in the first
paragraph of this Agreement.
"Viacom Broker" shall have the meaning set forth in Section
5.4.
"Viacom International" shall have the meaning set forth in the
first paragraph of this Agreement.
"Viacom Parties" shall have the meaning set forth in the
recitations.
"Viacom Partnership Interests" shall mean ECC's 50% interest
in the Partnership.
"Viacom Sci-Fi Europe Stock" shall mean all of the Sci-Fi
Europe Stock owned by Viacom or any of its Affiliates.
Section 1.2. Other Terms. Other terms may be defined elsewhere
in this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
ARTICLE 2
Actions To Be Taken Following Execution
Section 2.1 Announcement. Promptly following execution of this
Agreement, the parties shall issue press releases in the forms attached as
Exhibit A.
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Section 2.2 Suspension of Litigation (a) Upon the execution of
this Agreement, the parties will execute and promptly deliver to the Court in
the Litigation a letter, in the form attached as Exhibit B (the "Letter to
Court"), requesting that such Court not issue any new ruling, order or judgment
in respect of the Litigation until the earlier of the Closing Date or its
receipt of the Letter Requesting Resumption of Proceedings. The parties further
agree that while this Agreement remains in effect, and provided that no new
ruling, order or judgment in respect of the Litigation is issued or ordered
except to the extent specifically provided in this Agreement, no further or
other litigation (including any appeal) relating to the subject matter of the
Litigation (but excluding any action to enforce or arising out of this
Agreement) will be instituted in any forum by any party or by any Affiliate of
any party.
(b) Upon execution of this Agreement, the parties will execute
(i) the Litigation Releases in the forms attached as Exhibit C, which shall
become effective only in accordance with Section 3.5, (ii) the Stipulation of
Dismissal in the form attached as Exhibit D, which shall be filed with the Court
in the Litigation only in accordance with Section 3.5, and (iii) the Letter
Requesting Resumption of Proceedings in the form attached as Exhibit E, which
shall be delivered to the Court in the Litigation only in accordance with
Section 10.2(b).
(c) The parties further agree notwithstanding any claim of any
oral or written understanding or representation by any party to this Agreement,
neither the Litigation Releases nor the Stipulation of Dismissal nor anything
related to this Agreement, including the fact of this Agreement, any of the
terms herein, or any discussions or documents relating to the negotiations
between the parties, including the negotiation of this Agreement, shall (i) be
used as evidence or referred to in the Litigation or in any other case or
litigation in which any of the parties hereto are adverse to each other (except
any action to enforce or arising out of this Agreement), or (ii) in any way
constitute an admission with respect to any fact, claim or defense as to any of
the parties, or (iii) in the event the Closing does not occur (including as a
result of any termination of this Agreement), in any way be taken into account
by any investment banking firm that is chosen or retained pursuant to the
provisions of Article VIII of the Joint Venture Agreement, notwithstanding any
provisions of the Joint Venture Agreement; provided, however, that nothing in
this paragraph shall preclude any party hereto or its Affiliates from using the
Litigation Releases or Stipulation of Dismissal as a defense to any subsequent
claim, suit, action or litigation against it.
Section 2.3 Program Licensing Agreement; Satellite Subleases.
(a) Simultaneously with the execution of this Agreement, Viacom agrees to
execute, and the parties hereto agree to cause the Partnership to execute, (i) a
term sheet, in the form attached hereto as Exhibit F (the "Program License Term
Sheet"), which shall become binding upon the parties as of the Closing,
providing for the licensing by the Partnership of product of Viacom or certain
of its Affiliates, and (ii) a term sheet, in the form attached hereto as Exhibit
G (the "Satellite Sublease Term Sheet"), which shall become binding upon the
parties as of the Closing, providing for the sublease of transmission capacity
on certain satellites (or transponders on such satellites) specified in such
Exhibit G.
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(b) From and after the date of this Agreement, Viacom and
Universal agree to, and agree to cause the Partnership to, negotiate in good
faith and to use all commercially reasonable efforts (i) to cause the
Partnership and Viacom to execute as promptly as possible, definitive long-form
documentation (whether in one or more agreements, the "Program License
Agreements") of the agreements and provisions contained in the Program License
Term Sheet, to be effective as of the later of the Closing Date and the date of
their execution, and (ii) to cause the Partnership and Viacom to execute as
promptly as possible, definitive leases, subleases or agreements, as applicable
(whether in one or more leases, subleases or agreements, the "Satellite
Subleases"), documenting the agreements and provisions of the Satellite Sublease
Term Sheet, to be effective as of the later of the Closing Date and the date of
their execution. Except as otherwise provided in the Program License Term Sheet,
the Program License Agreements are to be consistent with prior similar
agreements between the Partnership and Viacom, if any.
(c) In the event (i) the Program License Agreements have not
been executed as of the Closing Date, the Program License Term Sheet shall be
effective and binding upon the parties thereto from and after the Closing Date,
and (ii) the Satellite Subleases have not been executed as of the Closing Date,
the Satellite Sublease Term Sheet shall be effective and binding upon the
parties thereto from and after the Closing Date.
Section 2.4 Disposition of Confidential Materials. Promptly,
but in no event more than 10 days after the Stipulation of Dismissal is entered,
the parties shall either return all Confidential Materials to counsel for the
producing party or certify in writing to counsel for the producing party that
such Confidential Materials have been destroyed, except that outside counsel may
retain one copy of litigation materials which have been filed with the Court,
regardless of whether they include Confidential Materials. Counsel shall make
reasonable efforts to ensure that all experts and consultants it has retained
abide by this provision and shall be responsible for any failure of such experts
and consultants to so abide. No party or its Affiliates or its counsel may use
Confidential Materials (including, but not limited to, Confidential Materials in
court papers, in deposition testimony given in connection with the Litigation
and in confidential documents bearing ▇▇▇▇▇-numbers or trial exhibit numbers
produced during the Litigation (including, but not limited to, any extracts,
exhibits, full or partial copies and representations of such Confidential
Materials)) for any purpose whatsoever. Neither the parties nor their Affiliates
will seek to lift the confidentiality designation from Confidential Materials,
or assist another in doing so. Nothing herein shall limit a party's ability to
use any document or other material which it created or produced in discovery or
at trial (except insofar as any such document or material refers to or
incorporates Confidential Materials of another Designating Party).
ARTICLE 3
Purchase of Partnership Interest; Closing
Section 3.1 Purchase. On the basis of the representations,
warranties, covenants and agreements set forth in this Agreement, at the
Closing, ECC shall sell to Universal (or its
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designee pursuant to Section 12.5, and Universal (or its designee pursuant to
Section 12.5) shall purchase from ECC, all of the Viacom Partnership Interests
(the "Purchase") for a purchase price of $1,600,000,000 (the "USA Purchase
Price"), and thereafter neither ECC nor Viacom or any of its Affiliates shall
have any further rights or obligations with respect to the Partnership, and the
Partnership shall have no further rights or obligations with respect to ECC or
Viacom or any of its Affiliates, in each case except as otherwise provided for
herein.
Section 3.2 Redemption or Purchase of Viacom Interest in
Sci-Fi Europe. (a) At the Closing, concurrently with the Purchase, in
Universal's sole discretion, either (i) the Viacom Parties and the Universal
parties shall cause Sci-Fi Europe to redeem, in accordance with the constituent
documents of Sci-Fi Europe and the laws of its jurisdiction of incorporation,
all of the Viacom Sci-Fi Europe Stock, or (ii) Universal or one of its
Affiliates shall purchase from the person holding the Viacom Sci-Fi Europe Stock
all of the shares of Viacom Sci-Fi Europe Stock, in each case in consideration
of $100,000,000 (the "Sci-Fi Europe Purchase Price", and together with the USA
Purchase Price, the "Purchase Price"). In the event the Viacom Sci-Fi Europe
Stock is redeemed, then from and after the Closing Date, each share of Viacom
Sci-Fi Europe Stock shall be canceled and no holder or former holder thereof
shall have any rights or obligations with respect thereto. In the event the
Viacom Sci-Fi Europe Stock is purchased, then from and after the Closing Date no
former holder thereof shall have any rights or obligations with respect thereto.
(b) On the Closing Date prior to the Closing, the person
holding the Universal Sci-Fi Europe Stock may, in its sole discretion, transfer
shares of Sci-Fi Europe Stock to and among the Universal Parties and their
Affiliates, and the Viacom Parties and their Affiliates will (at such time, or
in advance if necessary) cooperate with the foregoing in all respects, including
by granting any necessary consents or waivers or by voting of the Viacom Sci-Fi
Europe Stock.
(c) At the Closing, Viacom shall deliver certificates
representing shares of Viacom Sci-Fi Europe Stock, which shall be canceled, if
being redeemed, or accompanied by stock powers, if being purchased.
Section 3.3 Undistributed Current Year Partnership Earnings.
In addition to the Purchase Price, ECC shall also be entitled to receive from
the Partnership all Undistributed Current Year Earnings of the Partnership
allocable or allocated to the account of ECC as of the Closing Date. The parties
hereto agree and acknowledge that payments pursuant to this Section 3.3 and
Article 8 are in respect of Partnership income and are not part of the purchase
price for or any part of the consideration in respect of the Viacom Partnership
Interests or the Viacom Sci-Fi Europe Stock or the agreement set forth in
Article 7.
Section 3.4 Delivery of Purchase Price. At the Closing, upon
satisfaction of all of the conditions set forth in this Agreement to Universal's
obligation to consummate the Purchase, (i) Universal will wire transfer an
amount equal to the Purchase Price, and (ii) the parties hereto will cause the
Partnership will wire transfer an amount equal to the Estimated Allocable
Current Year Earnings, in each case in immediately available funds to the
account specified by Viacom prior to the Closing Date.
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Section 3.5 Litigation Releases. The Litigation Releases
shall, without any further act on the part of any party hereto or any other
person, become fully and completely effective and binding upon the Releasors
referred to therein immediately following the Closing, but shall not have any
force or effect prior thereto. Promptly after the Closing Date, the parties will
file with the Court in the Litigation the Stipulation of Dismissal.
Section 3.6 Vacatur Application. In the event the Viacom
Parties seek to vacate the judgment or opinion entered in the Litigation on May
15, 1997, the Universal Parties and their Affiliates will neither support nor
oppose such application.
Section 3.7 Time and Place of Closing. The Closing shall take
place on the Closing Date at 10:00 A.M., New York City time, at the offices of
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
ARTICLE 4
Representations and Warranties of the Universal Parties
Each of the Universal Parties hereby represents and warrants
to each of the Viacom Parties as follows:
Section 4.1 Incorporation; Authorization; No Conflict; etc.
Each of Universal and UCS is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware. Each of Universal and UCS has
full corporate power and authority to execute and deliver this Agreement and the
other agreements contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement, the performance of Universal's and
UCS' obligations hereunder and the consummation of the transactions contemplated
hereby by Universal and UCS have been duly and validly authorized by the boards
of directors of Universal and UCS, respectively, and no other corporate or
stockholder proceedings or actions on the part of Universal, UCS or their
respective boards of directors or stockholders are necessary therefor. The
execution, delivery and performance of this Agreement will not (i) violate any
provision of the charter or by-laws or similar organizational instrument of
Universal or UCS, or (ii) violate or conflict with any statute, rule or
regulation applicable to Universal, UCS or any of their properties or assets or
any other material restriction of any kind or character to which Universal or
UCS is subject, that would prohibit or make unlawful the transactions
contemplated by this Agreement. This Agreement has been duly executed and
delivered by Universal and UCS, and, assuming the due execution hereof by the
Viacom Parties, this Agreement constitutes the legal, valid and binding
obligation of each of Universal and UCS, enforceable against Universal and UCS,
respectively, in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether in equity or at law).
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Section 4.2 Consents and Approvals. Other than as may be
required under the HSR Act, the Communications Act and the Exchange Act, there
are no registrations, filings, applications, notices, consents, approvals,
orders, qualifications and waivers required to be made, filed, given or obtained
by any of the Universal Parties with, to or from any Governmental Authority or
other person in connection with the consummation of the Purchase and the other
transactions contemplated hereby,
Section 4.3 Brokers, Finders, etc. No Universal Party has
employed any broker, finder, consultant or other intermediary in connection with
the transactions contemplated hereby (a "Universal Broker") who would have a
valid claim for a fee or commission from any Viacom Party or the Partnership in
connection herewith or any such transaction. In the event any Universal Broker
at any time has a valid claim for a fee or commission from any Viacom Party or
the Partnership, Universal agrees to fully indemnify and hold Viacom and/or the
Partnership harmless against such claim.
Section 4.4. Investment Intent. Universal has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of its purchase of the Viacom Partnership
Interests and, if purchased, the Viacom Sci-Fi Europe Stock. Universal is
acquiring the Viacom Partnership Interests and, if purchased, the Viacom Sci-Fi
Europe Stock, for investment and not with a view toward or for sale in
connection with any public distribution thereof.
Section 4.5 Financing. Universal has the financial wherewithal
to fund the Purchase and to enable Universal and the other Universal Parties to
comply with each and all of their other obligations hereunder.
ARTICLE 5
Representations and Warranties of the Viacom Parties
Each of the Viacom Parties hereby represents and warrants to
each of the Universal Parties as follows:
Section 5.1 Incorporation; Authorization; No Conflict; etc.
Each of the Viacom Parties is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware. Each of the Viacom Parties has
full corporate power and authority to execute and deliver this Agreement and the
other agreements contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement, the performance of each of the
Viacom Parties' obligations hereunder, and the consummation of the transactions
contemplated hereby by each Viacom Party have been duly and validly authorized
by the boards of directors of each Viacom Party, respectively, and no other
corporate or stockholder proceedings or actions on the part of any Viacom Party
or their respective boards of directors or stockholders are necessary therefor.
The execution, delivery and performance of this Agreement will not (i) violate
any provision of the
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charter or by-laws or similar organizational instrument of any Viacom Party, or
(ii) ) subject to obtaining the consents and approvals referred to in Section
5.3, violate or conflict with any statute, rule or regulation applicable to any
Viacom Party or any of their properties or assets or any other material
restriction of any kind or character to which any of the Viacom Parties is
subject, that would prohibit or make unlawful the transactions contemplated by
this Agreement. This Agreement has been duly executed and delivered by each
Viacom Party, and, assuming the due execution hereof by the Universal Parties,
this Agreement constitutes the legal, valid and binding obligation of each
Viacom Party, enforceable against each such Viacom Party, respectively, in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the rights and
remedies of creditors generally and to general principles of equity (regardless
of whether in equity or at law).
Section 5.2 No Encumbrances. (a) ECC is the owner of and has
and will deliver at the Closing good title to the Viacom Partnership Interests
and holds such interests and will deliver such interests free and clear of all
Encumbrances (other than those created by Universal and its Affiliates); the
sale thereof to Universal shall not give rise to or create any right in any
person (other than Universal and its Affiliates) with respect to the Viacom
Partnership Interests, and upon the sale thereof, neither ECC nor any of its
Affiliates nor any other person (other than Universal) will have any right or
interest in the Partnership (other than those created by Universal and its
Affiliates).
(b) Viacom or an Affiliate is the owner of and has and has and
,if the Viacom Sci-Fi Europe Stock is purchased rather than redeemed pursuant to
Section 3.2, will deliver at the Closing good title to all of the Viacom Sci-Fi
Europe Stock and holds such stock and, if the Viacom Sci-Fi Europe Stock is
purchased rather than redeemed pursuant to Section 3.2, will deliver such stock
free and clear of all Encumbrances (other than those created by Universal and
its Affiliates), the transfer thereof hereunder shall not give rise to or create
any right in any person with respect to the Viacom Sci-Fi Europe Stock (other
than those created by Universal and its Affiliates), and upon the transfer
thereof hereunder, neither Viacom nor any of its Affiliates, nor any other
person (other than Universal) will have any right or interest an the Viacom
Sci-Fi Europe Stock (other than those created by Universal and its Affiliates).
Section 5.3 Consents and Approvals. Other than as may be
required under the HSR Act, the Communications Act and the Exchange Act, and
except for third party consents required with respect to the Satellite
Subleases, there are no registrations, filings, applications, notices, consents,
approvals, orders, qualifications and waivers required to be made, filed, given
or obtained by any of the Viacom Parties with, to or from any Governmental
Authority or other person in connection with the consummation of the Purchase
and the other transactions contemplated hereby,
Section 5.4 Brokers, Finders, etc. No Viacom Party has
employed any broker, finder, consultant or other intermediary in connection with
the transactions contemplated hereby (a "Viacom Broker") who would have a valid
claim for a fee or commission from any Universal Party or the Partnership in
connection herewith or any such transaction. In the event any Viacom Broker at
any time has a valid claim for a fee or commission from any Universal Party or
the Partnership, Viacom agrees to fully indemnify and hold Universal and/or the
Partnership harmless against such claim.
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ARTICLE 6
Covenants
Section 6.1 Conduct of Business of the Partnership. From the
date hereof through the Closing Date, except as specifically provided for in
this Agreement, (a) neither any Universal Party nor any Viacom Party shall take
any action or omit to take any action that would cause the Partnership or Sci-Fi
Europe to conduct its businesses other than in the ordinary course, consistent
with past practices (including with respect to all matters as to programming,
advertising, affiliate relations, inventory management, billing and collection)
or other than consistent in all respects with the existing terms, conditions and
limitations of the Partnership's and Sci-Fi Europe's constituent documents all
of which will remain in effect until the Closing Date, and (b) the Universal
Parties and the Viacom Parties shall use commercially reasonable efforts to
cause each of the Partnership and Sci-Fi Europe to conduct its businesses in the
ordinary course, consistent with past practices (including with respect to all
of the foregoing matters) and consistent in all respects with the existing
terms, conditions and limitations of the Partnership's and Sci-Fi Europe's
constituent documents.
Section 6.2 Obligations of Viacom. (a) From the date hereof
through the Closing Date, ECC agrees that it shall not, and Viacom agrees that
it shall not, directly or indirectly cause ECC to, convey, sell, transfer or
hypothecate to any person or entity, or otherwise dispose of any of the Viacom
Partnership Interests or the Viacom Sci-Fi Europe Stock.
(b) Viacom acknowledges the existence of the programming
rights set forth on Exhibit H hereto as if such programming rights were embodied
in executed agreements, and Viacom agrees that, from and after the Closing, it
will, and will cause its Affiliates to, honor all of the such programming rights
as if such programming rights were valid, executed agreements.
Section 6.3 Efforts; Obtaining Consents; Further Assurances.
(a) Subject to the terms and conditions hereof, each party hereto agrees to use
all reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated hereby,
and to cooperate in good faith with the other parties in connection with the
foregoing, including using all reasonable efforts (i) to obtain all consents,
approvals and authorizations that are required to be obtained under any federal,
state, local or foreign law or regulation, (ii) to lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties hereto to consummate the transactions contemplated hereby, (iii)
as promptly as possible, but in no event later than the tenth Business Days of
the date of this Agreement, to make initial filings under the HSR Act, (iv) to
effect all necessary registrations and filings including, but not limited to,
filings under the HSR Act and submissions of information requested by any
Government Authority, and (v) to fulfill all conditions to this Agreement.
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(b) Each party hereto shall promptly inform each other party
of any material communication from the Federal Trade Commission, the United
States Department of Justice or any other Government Authority regarding any of
the matters or transactions contemplated hereby.
(c) Each of the Viacom Parties and the Universal Parties
agrees that, from time to time, whether at or after the Closing Date, each of
them will execute and deliver such further instruments and other documents and
take such other action as may be necessary or desirable to carry out the terms
of this Agreement, including as may be necessary or desirable to assure that all
of the property, rights and interests of the Partnership and Sci-Fi Europe
(including trademarks, service marks and other intellectual property) survive
the consummation of the transactions contemplated hereby without impairment and
remain the property, rights and interests of the Partnership or Sci-Fi Europe,
as the case may be.
Section 6.4 Public Announcements. Prior to the Closing, except
as provided for in this Agreement or as required by Applicable Law, each party
hereto shall not, and shall not permit its Affiliates to, make any public
announcement in respect of this Agreement or the transactions contemplated
hereby without the prior written consent of Viacom, in the case of Universal and
its Affiliates, or Universal, in the case of Viacom and its Affiliates.
Section 6.5 Non-Solicitation of Employees. Without the prior
written consent of Universal, the Viacom Parties agree that, for a period of 6
months from the date of this Agreement, none of the Viacom Parties and their
subsidiaries, nor any representative or agent of any of them, shall actively or
directly solicit any key employee of the Partnership identified in writing prior
to or on the date hereof to become employed by the any of the Viacom Parties or
any of their subsidiaries, except that the Viacom Parties shall not be precluded
from hiring any such employee who (i) initiates discussions regarding such
employment without solicitation by any Viacom Party or subsidiary, (ii) responds
to any advertisement placed by any Viacom Party or subsidiary (provided that
such advertisement was a general solicitation not directed toward employees of
the Partnership), or (iii) has been terminated by the Partnership.
Section 6.6 Tax Allocation. Universal shall allocate the USA
Purchase Price between the Viacom Partnership Interests and the covenants
contained in Article 7 and shall provide a copy of such allocation in writing
(the "Tax Allocation") to Viacom. The Tax Allocation shall be binding upon the
parties hereto, and each party hereto shall prepare and file all federal, state
and local tax returns and reports in a manner consistent with the allocation
contained in any such agreement.
Section 6.7 Partnership Tax Election. The Viacom Parties and
the Universal Parties shall cause an election to be made for the Partnership
with respect to the Purchase under Section 754 of the Code and any comparable
provision of state, local or foreign tax law and shall not seek to revoke such
election. In the event that Universal elects to purchase or to cause one of its
Affiliates to purchase all of the shares of Viacom Sci-Fi Europe Stock under
Section 3.2, the Viacom Parties and the Universal Parties shall cause an
election to be made for Sci-Fi Europe under Section 754 of the Code and any
comparable provision of state, local or foreign tax law and shall not seek to
revoke such election.
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Section 6.8. Tax Matters. The Viacom Parties will have the
right to participate in any tax audit or administrative or judicial proceeding
or of any demand or claim relating to the Partnership or to Sci-Fi Europe which
affects any taxable period ending on or before or including the Closing Date to
the same extent the Viacom Parties have such rights prior to the Closing. After
the Closing, Universal shall promptly notify Viacom in writing of the
commencement of any such tax audit, administrative or judicial proceeding or
demand or claim. Such notice shall contain factual information (to the extent
known) describing the asserted tax matter in reasonable detail and shall include
copies of any notice or other document received from any tax authority in
respect of such tax matter.
Section 6.9 Indemnification. Universal covenants and agrees to
indemnify and hold harmless the Viacom Parties from and after the Closing
against any and all liabilities and obligations of the Partnership for which the
Viacom Parties may be liable as general partners of the Partnership, other than
any liabilities arising out of activities prior to the Closing Date which, at
the Closing Date, were known to any of the Viacom Parties and not known by any
of the Universal Parties. In the case of any claim asserted by a third party
against a Viacom Party entitled to indemnification under this Agreement, notice
shall be given by the Viacom Party to Universal promptly after such Viacom Party
has knowledge of any claim as to which indemnity may be sought, and the Viacom
Party shall permit Universal (at its expense) to assume (or to cause the
Partnership to assume) the defense of any claim or any litigation resulting
therefrom, provided that (a) the Viacom Party may participate in such defense at
such Viacom Party's expense, and (b) the delay or omission by any Viacom Party
to give notice as provided herein shall not relieve Universal of its
indemnification obligation under this Agreement except to the extent Universal
shall have been prejudiced as a result of such delay or omission. Except with
the prior written consent of the Viacom Party, neither Universal nor the
Partnership, in the defense of any such claim or litigation, shall consent to
entry of any judgment or enter into any settlement that provides for injunctive
or other nonmonetary relief affecting the Viacom Party. Universal and the
Partnership and the Viacom Party shall cooperate in the defense of any claim or
litigation subject to this Section and the records of each shall be available to
the other with respect to such defense.
Section 6.10 Ongoing Obligation of Confidentiality. The Viacom
Parties hereby agree that none of them nor any of their directors, officers,
employees, shareholders, agents, Affiliates or representatives (collectively,
"Representatives") shall disclose any Information (as defined below) or use any
Information in any way detrimental to or in competition with the Partnership;
provided, however, that above prohibition shall not apply to the extent that
disclosure is required by Applicable Law or any rule of any stock exchange. The
term "Information" shall mean all information (whether in oral, written or any
other form or medium) concerning the Partnership and its operations, but shall
not include any information which (i) is or becomes generally available to the
public other than by reason of any breach by the Viacom Parties or
Representative of its confidentiality obligations hereunder, (ii) is or becomes
available to Viacom Parties or any Representative after the Closing Date on a
non-confidential basis from a source which shall not have been prohibited from
disclosing such information to the Viacom
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Parties by a legal, contractual or fiduciary obligation of which any of the
Viacom Parties are aware, or (iii) is independently developed by a Viacom Party.
Section 6.11 Non-Registration of Trademarks. Each of the
Viacom Parties agrees, during the period from the Closing Date through the first
anniversary of the Closing Date, to take no action to register any of the trade
marks, service marks or logos set forth on Exhibit I hereto for television or
related uses anywhere in the world (whether or not such ▇▇▇▇ or logo is
currently so registered).
ARTICLE 7
Non-Competition
Section 7.1 Non-Competition. (a) Each Viacom Party agrees
that, during the period commencing on the Closing Date and terminating on the
fourth anniversary of the Closing Date (the "Effective Period"), neither it nor
any of its Affiliates will, directly or indirectly, beneficially own any
interest (including through any option, warrant or convertible security) in, or
be the operator of, or otherwise control, any Science Fiction Channel which is
authorized to be or is otherwise distributed anywhere in the ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ by
means of cable (whether wire, co-axial or fiber of any material), MDS, MMDS,
scrambled UHF or VHF (but excluding digital or advanced TV), MATV or SMATV or
direct-to-home satellite of any type (but excluding any Pay Television Service);
provided that nothing in the foregoing shall prevent the Viacom Parties and
their Affiliates collectively from owning or holding, with respect to any
person, up to 5% in the aggregate of the outstanding equity securities of such
person that are listed for trading on any national securities exchange or
automated quotation service; and provided that the Viacom Parties shall not in
any event be in breach of this Article 7 with respect to any unauthorized
distribution of any such Science Fiction Channel which the Viacom Parties are
taking reasonable efforts to prevent or any de minimis unauthorized
distribution; and provided that the re-transmission of standard terrestrial UHF
or VHF television signals (but excluding any "super-station") or the
transmission of United Paramount Network programming shall not in any event be
prohibited.
(b) For purposes of this Agreement, the term "Science Fiction
Channel" shall mean either:
(1) any channel (such as MTV, Nick at Nite, the Sci-Fi
Channel, etc.):
(i) that is identified by a trademark, service ▇▇▇▇, logo
or name including the words "science fiction",
"fantasy" or "horror" or a derivative thereof (such
as, without limitation, "Sci-Fi"), or
(ii) that is advertised, promoted, branded, marketed or
otherwise publicized in a manner that principally
associates such channel with the Sci Fi Genre, or
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(iii) a preponderance of the programming time of which (and
including at least one programming hour (i.e., shows,
movies or specials that would typically, together
with related advertising, interstitials, etc., be
considered to be one hour) in the science fiction
genre) is of the Sci Fi Genre during either:
(x) the period between 8 a.m. to
midnight;
(y) the period between 6 p.m. to
midnight; or
(z) any 24-hour period
provided that no such programming shall render a
channel a Science Fiction Channel unless such
programming is exhibited on such channel:
(A) more than three times per week (or,
if such programming service shall
include any Part Time Service
described in Section 7.1(b)(2)(A),
such lesser number of times per
week as equals three less the
number of days in which such Part
Time Service occurs) at least 40
weeks in any 52-week period (or,
regardless of whether such number
of weeks shall yet have occurred,
if there shall be an authorized
disclosure that such activity will
or is expected to continue for such
period); it being understood and
agreed that the parties hereto
intend that the Effective Period
not be shortened by such 40-week
period; or
(B) if such programming service
includes any Part Time Service
described in Section 7.1(b)(2)(A),
on any day adjacent to two days of
programming in the Sci Fi Genre of
such Part Time Service if any of
such three days is a weekend day
(i.e. Friday, Saturday or Sunday);
but excluding not more than four Stunts per year (and
not more than two in any quarter); or
(2) any Part Time Service that (A) (i) is identified by a
trademark, service ▇▇▇▇, logo or name including the
words "science fiction", "fantasy" or "horror" or a
derivative thereof (such as, without limitation,
"Sci-Fi"), or (ii) is advertised, promoted, branded,
marketed or otherwise publicized in a manner that
principally associates such Part Time Service with
the Sci Fi Genre, and (B) includes (x) more than two
days per week or (y) on two consecutive nights per
week if either is a weekend (i.e. Friday, Saturday
and Sunday) or (z) on two weekend nights (i.e.
Friday, Saturday and Sunday) per week, more than one
contiguous element of programming (such as a show,
movie or special, but excluding promotional or
interstitial elements) in the Sci Fi Genre (and
excluding not more than four Stunts per year, not
more than two in any quarter).
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(c) The Viacom Parties agree that this covenant is reasonable
with respect to its duration, geographical area and scope. If, at the time of
enforcement of this Article 7, a court holds that the restrictions stated herein
are unreasonable under circumstances then existing, the parties hereto agree
that the period, scope, or geographical area legally permissible under such
circumstances will be substituted for the period, scope or area stated herein.
(d) Nothing contained in this Article 7 shall prohibit a
merger, acquisition, or other business combination ("Combination") pursuant to
which any of the Viacom Parties, or any of their Affiliates, acquires, is
acquired by, or is consolidated with or into any other person, or pursuant to
which any person acquires an equity interest in a Viacom Party or an Affiliate
(in all cases, any such person (other than Viacom or such Affiliate) being a
"Combination Entity") which, together with its Affiliates, has beneficial
ownership of any interest in, or operates or controls, a Science Fiction Channel
the fair market value of which (or interest therein) (net of any attributable
indebtedness) is not more than 10% of the fair market value of the Combination
Entity (net of any attributable indebtedness) immediately prior to the
Combination; provided, however, that following any such Combination, each Viacom
Party agrees that neither it nor any of its Affiliates (determined immediately
prior to such Combination) will, directly or indirectly, provide infrastructure,
operational support, distribution (including any bundled, cooperative, joint or
other advertising or affiliate sales effort), promotion or product (except, in
each case, pursuant to any arrangement entered into prior to the Combination and
not in connection with or in anticipation thereof) to any such Science Fiction
Channel during the Effective Period (or transfer any of its assets, properties
or personnel used in such areas to, or combine the same with those of, the
Combination Entity).
(e) Nothing in this Article 7 shall in any event, whether
during or after the Effective Period, reduce, diminish, derogate or act as a
waiver with respect to any intellectual property rights of the Partnership or
Sci-Fi Europe (including trade marks, service marks, and copyrights).
(f) Notwithstanding anything to the contrary herein, no action
or activity shall be a violation of this Article 7 unless Universal shall first
have provided Viacom with a notice that it believes Viacom is violating the
provisions of this Article 7 and such action, activity or violation shall not
have ceased within 30 days thereafter.
(g) The following terms shall have the following definitions
for the purposes of this Article:
(i) "Part Time Service" shall mean any regularly scheduled
programming within any programming service (or that
shares a particular location on a receiving device
(e.g., a channel number, etc.) with any programming
service) that is advertised, promoted, branded,
marketed or otherwise publicized (including by the use
of interstitial or other distinctive marketing,
promotional or sales devices) in such a way as to be
intended to or likely to establish such programming as
a recognizable channel.
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(ii) A "Pay Television Service" shall mean any
subscription programming service that consists of an
encrypted (other than in a free-preview period)
transmission of programming to a television by means
of cable (whether wire, co-axial or fiber of any
material), MDS, MMDS, scrambled UHF or VHF (but
excluding digital or advanced TV), MATV, SMATV or
direct-to-home satellite of any type) that (a) is
free from third-party commercial advertising (and as
to which no authorized disclosure has been made of a
plan to accept such advertising in the future) (it
being understood, by way of example, that TV Land
would not satisfy the test set forth in this clause
(a)), (b) is available for purchase alone or in a
package of other programming services for which
consumers are required to pay on a periodic basis a
fee that is separate and distinct from the fee
payable by consumers for the most widely distributed
package of programming services generally offered and
marketed to consumers by programming distributors
(other than the package or tier of services commonly
referred to as "lifeline" service) , (c) is not
available for reception on any kind of a Pay-per-view
Basis or VOD Basis, and (d) (A) exhibits a
significant quantity of motion pictures (i.e., 24 or
more per year) in the premium television window or
(B) so long as the requirements of clauses (a) and
(b) above are satisfied, is "Showtime", "The Movie
Channel", "FLIX" or "Sundance Channel", in each case
for so long as they continue to be fundamentally in
nature as they currently are. "Pay-per-view Basis"
shall mean the mode of television exhibition whereby
individuals in substance and effect are (a) provided
with the limited right to view single or multiple
exhibitions of a single program on a scheduled basis
only and (b) charged a distinct, incremental fee for
such right. "VOD Basis" shall mean a mode of
television exhibition whereby individuals in
substance and effect are (a) provided with the right,
at their sole discretion, to select the commencement
time for an otherwise unscheduled viewing of a single
program and (b) charged a distinct, incremental fee
for such right.
(iii) "Sci Fi Genre" shall mean science fiction,
para-normal, fantasy, horror or similar genre (in
each case of the type currently offered by the Sci-Fi
Channel, it being understood that (x) any Star Trek
programming shall be deemed to be of such type, and
(y) comedy shows, movies or specials that may involve
some science fiction, para-normal, fantasy, horror or
similar genre element such as "My Favorite Martian"
or "▇▇▇▇ and ▇▇▇▇▇" shall not be deemed to be of such
type); provided that programming which, taken
together, does not include any show, movie or special
in the science fiction genre shall not be deemed to
be of the Sci Fi Genre.
(iv) "Stunt" shall mean any special programming, including
in the Sci Fi Genre, during a period of not more than
one week, without regard to the number of hours of
such programming, or any other characteristics,
including the manner of branding or promotion, or the
use of service marks or trademarks.
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ARTICLE 8
Post-Closing Payment of Undistributed Pre-Closing Partnership Earnings
Section 8.1 Post-Closing Payment. (a) Within 90 days after the
Closing Date, Universal shall, or shall cause the Partnership to, prepare and
deliver to Viacom (i) an audited balance sheet as of the Closing Date (the
"Closing Balance Sheet") prepared from the books and records of the Partnership,
certified by the Partnership's independent auditors, (ii) an audited statement
of profit and loss for the then current fiscal year of the Partnership (the
"Closing P&L") prepared from the books and records of the Partnership as if the
fiscal year of the Partnership had begun on January 1, 1997 and had ended on the
Closing Date, certified by the Partnership's independent auditors, and (iii) a
statement (the "Closing Statement") setting forth the Undistributed Current Year
Earnings allocable to ECC's account, together with a certificate of the
Partnership's independent auditors confirming the earnings and allocations shown
thereon. The Closing Balance Sheet and the Closing P&L shall be prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the preparation of the Partnership's audited financial
statements for the year ended December 31, 1996.
(b) During the 30-day period following Viacom's receipt of the
Closing Balance Sheet, the Closing P&L and the Closing Statement, Viacom and its
independent auditors shall be permitted to review the working papers of the
Partnership's independent auditors relating to the Closing Balance Sheet, the
Closing P&L and the Closing Statement. The Closing Statement shall become final
and binding upon the parties on the 30th day following Viacom's receipt thereof,
unless Viacom gives written notice of its disagreement with the Closing
Statement (a "Notice of Disagreement") to Universal prior to such date. Any
Notice of Disagreement shall specify in reasonable detail the nature of any
disagreement so asserted. If a Notice of Disagreement is received by Universal
in a timely manner, then the Closing Statement (as revised in accordance with
clauses (A) or (B) below) shall become final and binding on the earlier of (A)
the date Universal and Viacom resolve in writing any differences they have with
respect to the matters specified in the Notice of Disagreement or (B) the date
any disputed matters are finally resolved in writing by the Accounting Firm (as
defined below).
(c) During the 30-day period following delivery of a Notice of
Disagreement Universal and Viacom shall seek in good faith to resolve in writing
any differences which they may have with respect to the matters specified in the
Notice of Disagreement. At the end of such 30-day period (or such longer period
as the parties may agree), Universal and Viacom shall submit to an independent
accounting firm (the "Accounting Firm") for review and resolution any and all
matters which remain in dispute and which were included in the Notice of
Disagreement. The Accounting Firm shall be a nationally recognized independent
public accounting firm agreed upon by Universal and Viacom in writing. Universal
and Viacom shall jointly use all reasonable efforts to cause the Accounting Firm
to render a decision within 30 days following submission. Universal and Viacom
agree that judgment may be entered upon the determination of the Accounting Firm
in any court having jurisdiction over the party against which such
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determination is to be enforced. Each of the parties shall bear their own costs
of dispute resolution hereunder, and costs, fees and expenses of the Accounting
Firm pursuant to this Section shall be borne by equally by Universal and Viacom.
The fees and expenses of Universal's independent auditors in connection with
their review of any Notice of Disagreement shall be borne by Universal, and the
fees and expenses of Viacom's independent auditors incurred in connection with
their review of the Closing Statement shall be borne by Viacom.
(d) If the portion of the Undistributed Current Year Earnings
allocable to ECC's account as shown on the final Closing Statement (the "Actual
Earnings Amount") is greater than the Estimated Allocable Current Year Earnings,
Universal shall cause the Partnership to, and if the Actual Earnings Amount is
less than Estimated Allocable Current Year Earnings, Viacom shall, within 10
days after the Closing Statement becomes final and binding on the parties, make
payment by wire transfer of immediately available funds to an account designated
by Viacom or the Partnership, as applicable, of the amount of such difference,
together with interest thereon at the prime rate, as reported from time to time
in the Wall Street Journal, from the Closing Date to the date of actual payment,
calculated on the basis of the actual number of days elapsed divided by 365.
(e) The parties hereto agree and acknowledge that payments
pursuant to this Article 8 are in respect of Partnership income and are not part
of the purchase price for or any part of the consideration in respect of the
Viacom Partnership Interests or the Viacom Sci-Fi Europe Stock or the agreement
set forth in Article 7.
ARTICLE 9
Conditions
Section 9.1 Mutual Conditions. The obligation of each of the
parties hereto to consummate the transactions contemplated hereby shall be
subject to the satisfaction on or prior to the Closing Date, or waiver by such
parties of all of the following conditions:
(a) No Injunction. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or Government
Authority of competent jurisdiction that is in effect that restrains, prohibits
or makes unlawful the consummation of the transactions contemplated hereby;
(b) Waiting Periods. All waiting periods applicable pursuant
to the HSR Act shall have expired or been terminated and any approval required
by any Government Authority to consummate the transactions contemplated hereby
shall have been obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired;
Section 9.2 Conditions of the Universal Parties' Obligation to
Close. The obligation of each of Universal and UCS to consummate the
transactions contemplated hereby
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shall be subject to the satisfaction on or prior to the Closing Date or waiver
by such parties of all of the following condition:
(a) Representations, Warranties and Covenants. The
representations and warranties of the each of the Viacom Parties contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and shall be repeated and shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though made on
and as of the Closing Date. Each Viacom Party shall have duly performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or on the Closing
Date. Each Viacom Party shall have delivered to Universal a certificate, dated
the Closing Date and signed by a duly authorized officer, to the foregoing
effect.
Section 9.3 Conditions of the Viacom Parties' Obligation to
Close. The obligation of each Viacom Party to consummate the transactions
contemplated hereby shall be subject to the satisfaction on or prior to the
Closing Date, or waiver by such parties of all of the following condition:
(a) Representations, Warranties and Covenants. The
representations and warranties of the each of the Universal Parties contained in
this agreement shall be true and correct in all material respects as of the date
hereof and shall be repeated and shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though made on
and as of the Closing Date. Each Universal Party shall have duly performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or on the Closing
Date. Each Universal Party shall have delivered to Viacom a certificate, dated
the Closing Date and signed by a duly authorized officer, to the foregoing
effect.
ARTICLE 10
Termination
Section 10.1 Termination. This Agreement may be terminated at
any time prior to the Closing by:
(a) written agreement of Universal and Viacom; or
(b) either Universal or Viacom if the Closing has not occurred
by the close of business on 120 days from the date hereof and if the failure to
consummate the transactions contemplated hereby on or before such date did not
result from the failure by the party seeking termination of this Agreement to
fulfill any covenant, undertaking or commitment provided for herein that is
required to be fulfilled prior to Closing; or
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(c) either Universal or Viacom if any Government Authority of
competent jurisdiction shall have issued a final nonappealable order permanently
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement.
Section 10.2 Procedure and Effect of Termination. (a) In the
event of termination of this Agreement by either or both of Universal or Viacom
pursuant to Section 10.1, written notice thereof shall forthwith be given by the
terminating party to the other parties hereto, and this Agreement shall
thereupon terminate and become void and have no effect, and the transactions and
matters contemplated hereby shall be abandoned without further action by the
parties hereto; provided, however, that such termination shall not relieve any
party hereto of any liability for any willful breach or violation of this
Agreement; and provided, further, that Section 2.2(c) of this Agreement shall
survive any such termination and shall remain in full force and effect.
(b) In the event of termination of this Agreement by either or
both of Universal or Viacom pursuant to Section 10.1, the Letter Requesting
Resumption of Proceedings will shall be delivered promptly to the Court in the
Litigation.
ARTICLE 11
Miscellaneous
Section 11.1 Expenses. Except as otherwise specifically
provided in this Agreement, each party shall bear and pay its own expenses,
including the fees and expenses of any attorneys, accountants or other persons
engaged by it, incurred in connection with this Agreement and the transactions
contemplated hereby, and no such expenses shall be borne or paid by the
Partnership.
Section 11.2 Notices, etc. All notices, requests, demands or
other communications required by or otherwise with respect to this Agreement
shall be in writing and shall be deemed to have been duly given to any party
when delivered personally (by courier service or otherwise), or when delivered
by telecopy and confirmed by return telecopy, in each case to the applicable
addresses set forth below:
(a) if to any Universal Party:
Universal Studios, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (which shall not constitute notice) to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to any Viacom Party:
Viacom, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as any such party shall have designated by notice given in
accordance with the above to the other parties.
Section 11.3 Amendment. This Agreement may not be amended,
modified, superseded, canceled, renewed or extended except by a written
instrument signed by the party to be charged therewith.
Section 11.4 Waiver; Effect of Waiver. No provision of this
Agreement may be waived except by a written instrument signed by the party
waiving compliance. No waiver by any party hereto of any of the requirements
hereof or of any of such party's rights hereunder shall release the other
parties from full performance of their remaining obligations stated herein. No
failure to exercise or delay in exercising on the part of any party hereto any
right, power or privilege of such party shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege by such party.
Section 11.5 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns;
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provided, however, that no party hereto shall be entitled to assign its rights
or delegate its obligations under this Agreement without the express prior
written consent of the other parties hereto. The foregoing notwithstanding,
Universal may, in its sole discretion, assign its right to be the purchaser in
the Purchase to any one or more Affiliates of Universal. In the event of any
assignment pursuant to the foregoing sentence, all references to Universal
herein in its capacity as the purchaser of the Viacom Partnership Interests
shall be deemed to be references to such Affiliate-assignee, but no such
assignment shall relieve Universal of its obligations hereunder. Any purported
assignment or delegation made in violation of this Section shall be null and
void and of no effect.
Section 11.6 Survival of Representations, Warranties,
Covenants and Agreements. All of the representations, warranties, covenants and
agreements made herein by the parties hereto shall survive the Closing.
Section 11.7 Specific Performance. The parties hereto each
acknowledge that, in view of the uniqueness of the subject matter hereof, the
parties hereto would not have an adequate remedy at law for money damages in the
event that this Agreement were not performed in accordance with its terms, and
therefore agree that the parties hereto shall be entitled to specific
enforcement of the terms hereof in addition to any other remedy to which the
parties hereto may be entitled at law or in equity.
Section 11.8 Entire Agreement. Except as otherwise provided
herein, this Agreement (together with any Exhibits, agreements contemplated
hereby and any other contemporaneous written agreements) embodies the entire
agreement and understanding between the parties relating to the subject matter
hereof and supersedes (I) all prior agreements and understandings relating to
such subject matter, whether written or oral, and (ii) all purportedly
contemporaneous oral agreements and understandings relating to such subject
matter.
Section 11.9 Viacom Released from Joint Venture Agreement. The
parties hereto acknowledge that from and after the Closing, neither Viacom, ECC
nor any of their Affiliates will be a party to or bound or obligated by, or
enjoy any rights under, the Joint Venture Agreement.
Section 11.10 Interpretation; Absence of Presumption. (a) For
the purposes hereof, (I) words in the singular shall be held to include the
plural and vice versa and words of one gender shall be held to include the other
gender as the context requires, (ii) the terms "hereof", "herein", and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all of the Exhibits
hereto) and not to any particular provision of this Agreement, and Article,
Section, paragraph, and Exhibit references are to the Articles, Sections,
paragraphs and Exhibits to this Agreement unless otherwise specified, (iii) the
word "including" and words of similar import when used in this Agreement shall
mean "including, without limitation," unless the context otherwise requires or
unless otherwise specified, (iv) the word "or" shall not be exclusive, (v)
provisions shall apply, when appropriate, to successive events and transactions,
and (vi) all references to any period of days shall be deemed to be to the
relevant number of calendar days.
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(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
Section 11.11 Headings. The name assigned this Agreement and
the Section, Article and other headings contained in this Agreement are inserted
for convenience of reference only and will not affect the meaning or
interpretation of this Agreement.
Section 11.12 Severability. If any term of this Agreement or
the application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such term to the other parties or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by Applicable Law.
Section 11.13 Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the exercise or
beginning of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by such
party.
Section 11.14 Time of the Essence. The parties hereto agree
and acknowledge that time is of the essence in the performance of this
Agreement.
Section 11.15 Governing Law. This Agreement and all disputes
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without regard to principles of conflicts of law
thereof.
Section 11.16 Counterparts. This Agreement may be executed in
any number of counterparts, all of which shall be considered one and the same
agreement, and shall become effective when counterparts have been signed by each
party hereto and delivered to each other party. Copies of executed counterparts
transmitted by telecopy or other electronic transmission service shall be
considered original executed counterparts for purposes of this Section, provided
receipt of copies of such counterparts is confirmed.
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IN WITNESS WHEREOF, each of the undersigned, intending to be
legally bound, has caused this Agreement to be duly executed and delivered on
the date first set forth above.
UNIVERSAL STUDIOS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title Senior Vice President
UNIVERSAL CITY STUDIOS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title Senior Vice President
VIACOM INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title Deputy Chairman, Executive Vice President,
General Counsel and
Chief Administrative Officer
VIACOM INTERNATIONAL INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title Executive Vice President and Secretary
EIGHTH CENTURY CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title Executive Vice President and Secretary
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