EXHIBIT 48
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LIMITED LIABILITY LIMITED PARTNERSHIP AGREEMENT
of
[VIVENDI UNIVERSAL ENTERTAINMENT], L.L.L.P.
dated as of /o/, 2002,
by and among
[UNIVERSAL SUB],
USA NETWORKS, INC.,
USANi SUB LLC
and
▇▇▇▇▇ ▇▇▇▇▇▇
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Terms and Usage Generally...................................10
ARTICLE II
The Partnership
SECTION 2.01. Effectiveness of this Agreement.............................11
SECTION 2.02. Formation...................................................11
SECTION 2.03. Name........................................................11
SECTION 2.04. Term........................................................11
SECTION 2.05. Registered Agent and Registered Office......................11
SECTION 2.06. Purposes....................................................12
SECTION 2.07. Treatment as Partnership....................................12
ARTICLE III
Capital Contributions; Partners
SECTION 3.01. Initial Capital Contributions...............................12
SECTION 3.02. Admission of Partners.......................................12
SECTION 3.03. Substitute Partners and Additional
Partners.................................................13
ARTICLE IV
Reports
SECTION 4.01. Reports to Partners.........................................14
SECTION 4.02. Tax Information.............................................14
ARTICLE V
Preferred Interests
SECTION 5.01. General.....................................................15
SECTION 5.02. Ranking.....................................................15
SECTION 5.03. PIK Accretion...............................................16
SECTION 5.04. Consent Right...............................................16
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SECTION 5.05. Negative Covenants..........................................16
SECTION 5.07. No Other Consent Rights.....................................19
ARTICLE VI
Common Interests
SECTION 6.01. General.....................................................19
SECTION 6.02. Issuances of Common Interests After the
Closing Date.............................................19
SECTION 6.03. Preemptive Rights...........................................20
SECTION 6.04. Other Issuances of Common Interests.........................21
SECTION 6.05. Contribution of Assets or Capital Stock
by Universal Sub.........................................21
SECTION 6.06. Consent Right...............................................22
SECTION 6.07. Asignee of ▇▇▇▇▇▇ Common Interests..........................23
ARTICLE VII
Capital Accounts, Allocations of
Profit and Loss and Tax Matters
SECTION 7.01. Capital Accounts............................................23
SECTION 7.02. Allocations of Net Income and Net Loss......................24
SECTION 7.03. Allocations of Net Income and Net Loss
for Federal Income Tax Purposes..........................26
SECTION 7.04. Allocation of the Partnership Debt..........................27
SECTION 7.05. Elections...................................................27
SECTION 7.06. Fiscal Year.................................................27
SECTION 7.07. Withholding Requirements....................................27
SECTION 7.08. Tax Matters Partner.........................................27
ARTICLE VIII
Distributions
SECTION 8.01. Distributions...............................................28
SECTION 8.02. Tax Distributions...........................................28
SECTION 8.03. General Limitations.........................................29
SECTION 8.04. Distributions in Kind.......................................29
SECTION 8.05. Closing Date Distribution...................................29
SECTION 8.06. Distribution Upon Maturity of Class A
Preferred Interests......................................29
SECTION 8.07. Put/Call Rights with Respect to Class B
Preferred Interests.........................................29
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ARTICLE IX
Management of the Partnership
SECTION 9.01. General Partner.............................................31
SECTION 9.02. Board; Representatives; Chairman............................31
SECTION 9.03. Expenses....................................................32
SECTION 9.04. Agreement Not To Compete....................................32
ARTICLE X
Transfers of Interests
SECTION 10.01. Restrictions on Transfers...................................34
SECTION 10.02. Transfers Permitted at any Time.............................35
SECTION 10.03. Put/Call....................................................35
SECTION 10.04. Tag-Along for Limited Partners for
Transfers by Universal...................................40
ARTICLE XI
Limitation on Liability,
Exculpation
SECTION 11.01. Limitation on Liability.....................................41
SECTION 11.02. Exculpation.................................................41
SECTION 11.03. Partnership Opportunities...................................42
SECTION 11.04. Indemnification.............................................43
ARTICLE XII
Events of Withdrawal; Bankruptcy of a General Partner
SECTION 12.01. Events of Withdrawal........................................44
SECTION 12.02. Bankruptcy of a General Partner.............................44
ARTICLE XIII
Dissolution and Termination
SECTION 13.01. Dissolution.................................................45
SECTION 13.02. Winding Up of the Partnership...............................46
SECTION 13.03. Distribution of Property....................................47
SECTION 13.04. Claims of Partners..........................................47
SECTION 13.05. Termination.................................................48
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ARTICLE XIV
Miscellaneous
SECTION 14.01. Notices.....................................................48
SECTION 14.02. No Third Party Beneficiaries................................48
SECTION 14.03. Waiver......................................................48
SECTION 14.04. Integration.................................................49
SECTION 14.05. Headings....................................................49
SECTION 14.06. Counterparts................................................49
SECTION 14.07. Severability................................................49
SECTION 14.08. Applicable Law..............................................49
SECTION 14.09. Jurisdiction................................................49
Schedules
Schedule A - Partners
Schedule B - Initial Capital Contributions
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LIMITED LIABILITY LIMITED PARTNERSHIP
AGREEMENT of [VIVENDI UNIVERSAL ENTERTAINMENT],
L.L.L.P. (the "Partnership") dated as of /o/,
2002, by and among [UNIVERSAL SUB], a Delaware
corporation and a wholly owned subsidiary of
Universal ("Universal Sub"), as general partner,
and USA NETWORKS, INC., a Delaware corporation
("USAi"), USANi SUB LLC, a Delaware limited
liability company ("USANi Sub"), and ▇▇▇▇▇
▇▇▇▇▇▇ ("▇▇▇▇▇▇"), as limited partners.
Preliminary Statement
WHEREAS the parties hereto (or Affiliates thereof) are parties to
the Transaction Agreement (the "Transaction Agreement") dated as of December
16, 2001 by and among Vivendi, Universal, USAi, USANi LLC, a Delaware limited
liability company, Liberty and ▇▇▇▇▇▇; and
WHEREAS, the parties hereto desire to form a limited liability
limited partnership.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Definitions and Usage
SECTION 1.01. Definitions. The terms shall have the following
meanings for purposes of this Agreement:
"Additional Partner" means any Person admitted as a Partner of the
Partnership pursuant to Section 3.03 in connection with the new issuance of a
Common Interest to such Person.
"Affiliate" of any specified Person means any other Person directly
or indirectly Controlling, Controlled by or under direct or indirect common
Control with such specified Person. For purposes of the foregoing, (i) USANi
and its Affiliates shall be deemed to be Affiliates of USAi, (ii) none of
USAi, Universal or ▇▇▇▇▇▇, or any of their respective Affiliates, shall be
deemed to be Affiliates of one another, and (iii) none of USAi, Universal or
▇▇▇▇▇▇, or any of their respective Affiliates, shall be deemed to be an
Affiliate of the Partnership.
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"Agreement" means this Limited Liability Limited Partnership
Agreement, as the same may be amended or restated from time to time.
"Appraised Value" of a Common Interest means (x) the Participation
Percentage of such Common Interest multiplied by (y) the private market value
of the Partnership taken as a whole; provided, however, that such valuation
shall not assume the value of the Partnership in an "auction" proceeding, and
any valuation methodology shall exclude any acquisition of similar assets or
businesses at a uniquely high valuation due to a purchaser's strategic need to
acquire such assets or businesses.
"Bankrupt Partner" is defined in Section 12.02(a).
"Bankruptcy" of a Person means (i) the filing by such Person of a
voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States
Code (or corresponding provisions of future laws) or any other bankruptcy or
insolvency law, whether foreign or domestic, or such Person's filing an answer
consenting to or acquiescing in any such petition, (ii) the making by such
Person of any assignment for the benefit of its creditors or the admission by
such Partner in writing of its inability to pay its debts as they mature or
(iii) the expiration of 60 days after the filing of an involuntary petition
under Title 11 of the United States Code (or corresponding provisions of
future laws), an application for the appointment of a receiver for the assets
of such Person, or an involuntary petition seeking liquidation,
reorganization, arrangements, composition, dissolution or readjustment of its
debts or similar relief under any bankruptcy or insolvency law, provided that
the same shall not have been vacated, set aside or stayed within such 60-day
period. This definition of "Bankruptcy" is intended to replace the bankruptcy
related events set forth in Sections 17-402(a)(4) and (a)(5) of the Delaware
Act.
"Bankruptcy Code" means the United States Bankruptcy Code of 1978,
as amended.
"Beneficial Owner" and "Beneficial Ownership" have the meanings set
forth in Rule 13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934,
as amended, except that a Person shall be deemed to have Beneficial Ownership
of all securities that such Person has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent event.
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"Board" is defined in Section 9.02(b).
"Business" means any of the programming, television distribution,
cable network, film and theme park businesses.
"Business Day" means any day other than a Saturday, a Sunday or a
U.S. Federal holiday.
"Call" means the USAi Call or the ▇▇▇▇▇▇ Call.
"Capital Account" is defined in Section 7.01(a).
"Capital Contribution" means, with respect to any Partner, any
capital contribution made by such Partner to the Partnership pursuant to
Section 3.01 or 6.02.
"Cause" means (i) the conviction of, or pleading guilty to, any
felony, or (ii) the willful, continued and complete failure to attend to
managing the business affairs of the Partnership, after written notice of such
failure from the General Partner and reasonable opportunity to cure.
"Chairman" is defined in Section 9.02(b).
"Class A Preferred Interests" is defined in Section 5.01(a).
"Class B Preferred Consideration" is defined in Section 8.07.
"Class B Preferred Interests" is defined in Section 5.01(b).
"Closing" means the closing of the transactions contemplated by the
Transaction Agreement.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Interest" means a partnership interest in the Partnership
that is not a Preferred Interest.
"Consolidated Tangible Net Worth" means total assets of the
Partnership and its consolidated subsidiaries, determined in accordance with
U.S. generally accepted accounting principles, giving effect to purchase
accounting, and deducting therefrom consolidated current liabilities and, to
the extent otherwise included, goodwill, patents,
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trademarks, service marks, trade names, copyrights, licenses and other
intangible items.
"Control", with reference to any Person, means the Beneficial
Ownership of a majority of the outstanding voting power (or equivalent) of
such Person and the terms "Controlling" and "Controlled" have meanings
correlative to the foregoing.
"Covered Person" means (i) each Partner, (ii) each Affiliate of a
Partner, (iii) each Representative and each officer, director, shareholder,
partner, employee, member, manager, representative, agent or trustee of a
Partner or of an Affiliate of a Partner and (iv) each officer of USAi serving
as an employee of the Partnership.
"Delaware Act" means the Delaware Revised Uniform Limited
Partnership Act, 6 Del. C.ss.ss.17-101 et seq., as amended from time to time
or any successor statute.
"▇▇▇▇▇▇" is defined in the Preamble.
"▇▇▇▇▇▇ Call" is defined in Section 10.03(b).
"▇▇▇▇▇▇ Put" is defined in Section 10.03(b).
"Disabled" means the disability of ▇▇▇▇▇▇ after the expiration of
more than 180 consecutive days after its commencement which is determined to
be total and permanent by a physician selected by the Partnership and
reasonably acceptable to ▇▇▇▇▇▇; provided that ▇▇▇▇▇▇ shall be deemed to be
disabled only following the expiration of 90 days following receipt of a
written notice from the Partnership and such physician specifying that a
disability has occurred if within such 90-day period he fails to return to
managing the business affairs of the Partnership. A total disability shall
mean mental or physical incapacity that prevents ▇▇▇▇▇▇ from managing the
business affairs of the Partnership.
"Effective Time" means the Closing.
"Face Value" of a Preferred Interest, as of any time, means the
amount equal to the initial Capital Contribution attributable to such
Preferred Interest as adjusted from time to time pursuant to Section 5.03.
"Fiscal Year" is defined in Section 7.06.
"General Partner" means Universal Sub, any Substitute Partner that
is admitted as the general partner
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of the Partnership or any Person appointed as such pursuant to Section
12.02(a), in each case, for so long as such Person continues to be the general
partner of the Partnership.
"Good Reason" means the assignment to ▇▇▇▇▇▇ of any duties
inconsistent in any respect with his position as Chairman and chief executive
officer of the Partnership, authority, duties or responsibilities (including
status, offices, title and direct reporting relationship to the chief
executive officer of Vivendi), or any diminution in such positions (or removal
from such positions), authority, duties or responsibilities or requiring him
to be based at any location other than his current locations; it being
understood that the chief executive officer of the Partnership shall have the
same authority and duties as a corresponding officer of a Delaware corporation
would have to act for a Delaware corporation.
"Indebtedness" of any Person means, without duplication, (i) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all obligations of such Person
upon which interest charges are customarily paid, (iv) all obligations of such
Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), and (v) all capital lease obligations of such Person; provided that
the Indebtedness of any Persons shall include (A) the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person is not
liable therefor, (B) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such Person, whether
or not the Indebtedness secured thereby has been assumed and (C) all
guarantees by such Person of Indebtedness of others; and provided, further,
that Indebtedness shall not include any Permitted Liens.
"Interests" means the entire partnership interest of a Partner in
the Partnership, including its Common Interests and its Preferred Interests.
"Investment Bank" means an independent, nationally recognized
investment bank.
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"Liberty" means Liberty Media Corporation, a Delaware corporation.
"Lien" means any pledge, encumbrance, security interest, purchase
option, call or similar right.
"Limited Partner" means USAi, USANi Sub, ▇▇▇▇▇▇ and any Additional
Partner or Substitute Partner that is admitted as a limited partner of the
Partnership, in each case for so long as such Person continues to be a limited
partner of the Partnership.
"Market Value" of a stock means the amount equal to the average of
the daily volume weighted averages of such stock on the primary exchange on
which it trades, as reported by Bloomberg, for the 15 consecutive trading days
ending on the day immediately preceding the date of determination. For the
avoidance of doubt, the Market Value of USAi Common Shares shall be determined
based on the price of USAi Common Stock.
"Maturity Date" is defined in Section 8.06.
"Net Income" or "Net Losses", as appropriate, means, for any period,
the taxable income or tax loss of the Partnership for such period for Federal
income tax purposes, taking into account any separately stated tax items and
increased by the amount of any tax-exempt income of the Partnership during
such period and decreased by the amount of any Section 705(a)(2)(B)
expenditures (within the meaning of Treasury Regulation Section
1.704-1(b)(2)(iv)(i)) of the Partnership; provided, however, that Net Income
or Net Losses of the Partnership shall be computed without regard to the
amount of any items of gross income, gain, loss or deduction that are
specially allocated pursuant to Section 7.02(c), (d) or (e). With respect to
any property contributed to the Partnership at a time when its adjusted tax
basis differs from its fair market value, and with respect to all Partnership
property after any adjustment to the Capital Accounts pursuant to Section
7.01(c), the Net Income or Net Losses of the Partnership (and the constituent
items of income, gain, loss and deduction) shall be computed in accordance
with the principles of Treasury Regulation Section 1.704-1(b)(2)(iv)(g).
"Participation Percentage" is defined in Section 6.01(a).
"Partner" means the General Partner or a Limited Partner.
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"Partnership" is defined in the Preamble.
"Partnership Debt" means the debt incurred by the Partnership to
fund the distribution under Section 8.05, pursuant to Section 2.04(iii) of the
Transaction Agreement.
"Permitted Liens" means, collectively, (i) all statutory or other
liens for taxes or assessments which are not yet due or the validity of which
is being contested in good faith by appropriate proceedings, (ii) all
mechanics', materialmen's, carriers', workers' and repairers' liens, and other
similar liens imposed by law, incurred in the ordinary course of business,
which allege unpaid amounts that are less than 30 days delinquent or which are
being contested in good faith by appropriate proceedings, and (iii) all other
Liens which do not materially detract from or materially interfere with the
marketability, value or present use of the asset subject thereto or affected
thereby.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, governmental authority or
other entity.
"Preferred Interests" means the Class A Preferred Interests and the
Class B Preferred Interests, collectively.
"Purchasing Partner" means the Partner purchasing Common Interests
pursuant to the exercise of a Put or a Call.
"Put" means the USAi Put or the ▇▇▇▇▇▇ Put.
"Representative" is defined in Section 9.02(b).
"Restricted Business" has the same meaning as the term "Business" in
the Transaction Agreement.
"Sale Transaction" means any merger, consolidation, tender or
exchange offer, reclassification, compulsory share exchange, liquidation or
similar transaction, in which all or substantially all of the assets or the
outstanding equity securities of the ultimate parent of a Partner are
transferred, converted into or exchanged for stock, other securities, cash or
assets of another entity.
"Section 704(c) Property" means "Section 704(c) property" as defined
in Treasury Regulation Section 1.704-3(a)(3) and property that is revalued
pursuant to Section 7.01(c) hereof.
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"Securities Act" means the Securities Act of 1933, as amended.
"Selected Appraisal" is defined in Section 10.03(d).
"Selling Partner" means the Partner selling Common Interests
pursuant to the exercise of a Put or a Call.
"Substitute Partner" means any Person admitted as a Partner of the
Partnership pursuant to Section 3.03 in connection with the Transfer of a
then-existing Interest of a Partner to such Person.
"Tag-Along Interests" is defined in Section 10.04(a).
"Tag-Along Notice" is defined in Section 10.04(a).
"Tag-Along Offeree" is defined in Section 10.04(a).
"Tax Detriment" means, with respect to any taxes incurred as a
result of the recognition of income or gain by an indemnified party in taxable
period(s) earlier than the taxable period(s) in which such income or gain
would otherwise have been recognized by such party solely as a result of an
action or inaction by an indemnifying party, the excess, if any, of (i) the
net present value of such taxes incurred by the indemnified party in such
earlier taxable period(s) over (ii) the net present value of the taxes that
would otherwise have been incurred in such later taxable period, assuming (i)
a discount rate equal to USAi's borrowing rate in effect as of the time such
net present values are calculated and (ii) that for all taxable years, the
indemnified party is fully taxable at the highest applicable marginal Federal
income tax rate and the highest applicable marginal income and franchise tax
rates of the state, local and foreign jurisdictions in which the Partnership
or any of its subsidiaries conducts business (assuming full deductibility of
state and local taxes, and full creditability and deductibility of foreign
taxes, for Federal (and if applicable state and local) income tax purposes).
"Tax Matters Partner" is defined in Section 7.08.
"Transaction Agreement" is defined in the Preamble.
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"Transfer" means any sale, assignment, transfer, exchange, gift,
bequest, pledge, hypothecation or other disposition or encumbrance, direct or
indirect, in whole or in part, by operation of law or otherwise, and shall
include all matters deemed to constitute a Transfer under Section 10.01(a);
provided, however, that a Transfer shall not include a Sale Transaction. The
terms "Transferred", "Transferring", "Transferor" and "Transferee" have
meanings correlative to the foregoing.
"Universal" means Universal Studios, Inc., a Delaware corporation.
"Universal Sub" is defined in the Preamble.
"USAi" is defined in the Preamble.
"USAi Call" is defined in Section 10.03(a).
"USAi Class B Common Stock" means shares of Class B common stock of
USAi, par value $.01 per share.
"USAi Common Shares" means shares of USAi Common Stock and USAi
Class B Common Stock, collectively.
"USAi Common Stock" means shares of common stock of USAi, par value
$.01 per share.
"USAi Preferred Call" is defined in Section 8.07.
"USAi Preferred Put" is defined in Section 8.07.
"USAi Put" is defined in Section 10.03(a).
"USANi Sub" is defined in the Preamble.
"Vivendi" means Vivendi Universal, S.A., a societe anonyme organized
under the laws of France.
"Vivendi Ordinary Shares" means ordinary shares of Vivendi, par
value (U) 5.5 per share, or, in the event that all or substantially all of the
shares of Vivendi are exchanged for or converted into equity securities of
another Person after the Effective Time, such other equity securities as such
shares may be exchanged for or converted into after the Effective Time, so
long as such equity securities are listed or quoted on the New York Stock
Exchange, the Nasdaq Stock Market, the London Stock Exchange, the Paris Bourse
or the Frankfurt Stock Exchange and the average monthly trading volume of such
equity securities on any such exchange immediately after such share
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exchange or conversion (and after giving effect to all of the transactions
contemplated in connection with such exchange or conversion) is substantially
equivalent to or greater than that of the Vivendi Ordinary Shares on its
primary exchange immediately prior to such share exchange or conversion.
SECTION 1.02. Terms and Usage Generally. (a) The definitions in
Section 1.01 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All references herein to
Articles, Sections, Annexes, Exhibits and Schedules shall be deemed to be
references to Articles and Sections of, and Annexes, Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. All Annexes,
Exhibits and Schedules attached hereto shall be deemed incorporated herein as
if set forth in full herein. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. References to a Person are also to its
permitted successors and permitted assigns. Unless otherwise expressly
provided herein, any agreement, instrument or statute defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and instruments
incorporated therein.
(b) As used in this Agreement, unless otherwise expressly specified
herein, any allocation or distribution to be made among Interests or Partners
"on a pro rata basis" or "ratably" shall be made in proportion to the relative
Participation Percentages or Face Values of, or Capital Contributions
attributable to, such Interests, or of such Interests owned by such Partners,
in each case determined immediately prior to the transaction with respect to
which such allocation is being made.
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ARTICLE II
The Partnership
SECTION 2.01. Effectiveness of this Agreement. This Agreement
constitutes the partnership agreement (as defined in the Delaware Act) of the
parties hereto. This Agreement shall become effective at the Effective Time.
SECTION 2.02. Formation. The parties hereto agree to form the
Partnership as a limited partnership and unanimously agree that the
Partnership shall be qualified as a limited liability limited partnership
under and pursuant to Section 17-214 of the Delaware Act and Section 15-1001
of the Delaware Revised Uniform Partnership Act (6 Del. C. ▇▇.▇▇. 15-101 et
seq. ("DRUPA")) by filing with the Secretary of State of the State of Delaware
a certificate of limited partnership of the Partnership and a statement of
qualification as a limited liability limited partnership. The General Partner
shall file and record the certificate of limited partnership of the
Partnership, such statement of qualification and such other documents as may
be required or appropriate under the laws of the State of Delaware and of any
other jurisdiction in which the Partnership may conduct business. The General
Partner shall, on request, provide any Partner with copies of each such
document as filed and recorded.
SECTION 2.03. Name. The name of the Partnership shall be [VIVENDI
UNIVERSAL ENTERTAINMENT], L.L.L.P. The General Partner may change the name of
the Partnership or adopt such trade or fictitious names as it may determine,
in each case consistent with the requirements of the Delaware Act, including
Sections 17-102 and 17-214 thereof, and all other applicable law (e.g.,
fictitious name statutes). The General Partner will give all Partners prompt
written notice of any such name change (or adoption of any such trade or
fictitious name).
SECTION 2.04. Term. The term of the Partnership shall begin on the
date the certificate of limited partnership of the Partnership is effective
(which shall in any event be no later than the Effective Time), and the
Partnership shall have perpetual existence unless sooner dissolved as provided
in Article XIII.
SECTION 2.05. Registered Agent and Registered Office. The name of
the registered agent for service of process shall be The Corporation Trust
Company, and the address of the registered agent and the address of the
registered office in the State of Delaware shall be 1209
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Such office and such agent may be
changed from time to time by the General Partner consistent with the
requirements of the Delaware Act, including Sections 17-104 and 17-202
thereof.
SECTION 2.06. Purposes. The Partnership shall be formed for the
object and purpose of, and the nature of the business to be conducted and
promoted by the Partnership shall be, engaging in any lawful act or activity
for which limited partnerships may be formed under the Delaware Act, including
engaging in the Business, and engaging in any and all activities necessary or
incidental to the foregoing.
SECTION 2.07. Treatment as Partnership. Except as otherwise required
pursuant to a determination within the meaning of Section 1313(a)(1) of the
Code, the parties shall treat the Partnership as a partnership for United
States federal income tax purposes and agree not to take any action or fail to
take any action which action or inaction would be inconsistent with such
treatment.
ARTICLE III
Capital Contributions; Partners
SECTION 3.01. Initial Capital Contributions. (a) On the Closing
Date, USAi, USANi Sub and Universal Sub shall make their respective initial
Capital Contributions, in property, in accordance with Section 2.03 of the
Transaction Agreement.
(b) In return for such initial Capital Contributions, Common
Interests and/or Preferred Interests shall be issued to the Partners as
provided in Articles V and VI hereof. Schedule B indicates the amount of
Capital Contributions attributable to Common Interests and Preferred
Interests, respectively, for each Partner.
(c) The parties shall treat the Capital Contributions described in
this Section 3.01 as contributions pursuant to Section 721 of the Code in
which no gain or loss is recognized to any extent, except as otherwise
required pursuant to a determination within the meaning of Section 1313(a)(1)
of the Code.
SECTION 3.02. Admission of Partners. At the Effective Time, without
the need for any further action of any Person, the Persons set forth on
Schedule A attached hereto who have executed this Agreement shall be admitted
as Partners, and each such Person shall be shown as such in the
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books and records of the Partnership. Following the Effective Time, no Person
shall be admitted as a Partner and no additional Common Interests or Preferred
Interests shall be issued except as expressly provided herein.
SECTION 3.03. Substitute Partners and Additional Partners. (a) No
Transferee of an Interest or Person to whom an Interest is issued after the
Effective Time pursuant to this Agreement shall be admitted as a Partner
hereunder or acquire any rights hereunder, including any voting rights or the
right to receive distributions and allocations in respect of the Transferred
or issued Interest, as applicable, unless (i) such Interest is Transferred or
issued in compliance with the provisions of this Agreement and (ii) such
Transferee or recipient shall have executed and delivered to the Partnership
such customary instruments as the General Partner may reasonably require, to
effectuate the admission of such Transferee or recipient as a Partner and to
confirm the agreement of such Transferee or recipient to be bound by all the
terms and provisions of this Agreement (including Section 10.03). Upon
complying with clauses (i) and (ii) above, without the need for any further
action of any Person, a Transferee or recipient shall be deemed admitted to
the Partnership as a Partner. A Substitute Partner shall enjoy the same
rights, and be subject to the same obligations, as the Transferor; provided
that, unless expressly provided otherwise herein, such Transferor shall not be
relieved of any obligation or liability hereunder arising prior to the
consummation of such Transfer. As promptly as practicable after the admission
of any Person as a Partner, the books and records of the Partnership shall be
changed to reflect such admission. In the event of any admission of a
Substitute Partner or Additional Partner pursuant to this Section 3.03(a),
this Agreement shall be deemed amended to reflect such admission, and any
formal amendment of this Agreement (including Schedules A and B hereto) in
connection therewith shall only require execution by the General Partner and
such Substitute Partner or Additional Partner, as applicable, to be effective.
(b) If a Partner shall Transfer all (but not less than all) its
Interests, the Partner shall thereupon cease to be a Partner of the
Partnership; provided, however, that any such Partner shall not cease to be a
Partner until a Transferee of such Partner's Interests is admitted to the
Partnership as a Substitute Partner pursuant to Section 3.03(a).
14
ARTICLE IV
Reports
SECTION 4.01. Reports to Partners. (a) Within 30 days after the end
of each of the first three fiscal quarters of a Fiscal Year, the Partnership
shall deliver to each Partner (i) unaudited consolidated balance sheets of the
Partnership and its consolidated subsidiaries as at the end of such quarter
and the related consolidated statements of income, statements of cash flow and
changes in financial position of the Partnership for the period from the
beginning of such quarter to the end of such quarter, prepared on a basis
consistent with the audited financial statements of the Partnership and its
consolidated subsidiaries, subject to changes resulting from audit and normal
year-end adjustments and (ii) a certificate executed by the chief financial
officer and Tax Matters Partner of the Partnership certifying compliance by
the Partnership with the provisions set forth in Section 5.05.
(b) Within 80 days after the end of each Fiscal Year, the
Partnership shall deliver to each Partner audited consolidated balance sheets
of the Partnership and its consolidated subsidiaries as at the end of such
Fiscal Year and the related consolidated statements of income, statements of
cash flow and changes in financial position of the Partnership for such Fiscal
Year, all in reasonable detail and accompanied by a report thereon of the
Partnership's independent auditors as to such consolidated financial
statements presenting fairly the financial position of the Partnership and its
consolidated subsidiaries as at the dates indicated, and as to such audit
having been made in accordance with generally accepted auditing standards.
Concurrently with the delivery of such annual financial statements, the
General Partner shall deliver (i) a statement to each Partner of the balance
of each Partner's Capital Account and (ii) a certificate executed by the chief
financial officer and Tax Matters Partner of the Partnership certifying
compliance by the Partnership with the provisions set forth in Section 5.05.
SECTION 4.02. Tax Information. The General Partner shall timely
cause to be prepared, at the expense of the Partnership, all Federal, state,
local and foreign tax returns (including information returns) of the
Partnership and its subsidiaries, which may be required by a jurisdiction in
which the Partnership or its subsidiaries operate or conduct business for each
year or period for which such returns are required to be filed, and the
General Partner shall cause such returns to be timely filed. As
15
soon as practicable after the end of each Fiscal Year, the General Partner
shall furnish to each Partner (and each Person to whom ▇▇▇▇▇▇ has assigned a
beneficial interest pursuant to Section 2.07 of the Transaction Agreement) an
Internal Revenue Service Schedule K-1 and such other information in the
possession of the General Partner as is reasonably requested by such Partner
to file any required Federal, state, local and foreign tax returns.
SECTION 4.03. Other Information. The Partnership shall make
available, on a reasonable basis, the chief financial officer of the
Partnership and other officers of the Partnership, as appropriate, to respond
to questions of the Limited Partners relating to the financial condition of
the Partnership.
ARTICLE V
Preferred Interests
SECTION 5.01. General. As of the Effective Time, USAi shall receive
the following Preferred Interests:
(a) a preferred partnership interest in the Partnership with an
initial Face Value of $750,000,000, having special rights as set forth in
this Article V and a preference with respect to distributions (as set
forth in Section 8.06) and liquidation (as set forth in Section 13.02)
(the "Class A Preferred Interests"), and
(b) a perpetual (subject to Section 8.07) preferred partnership
interest in the Partnership with an initial Face Value of $1,750,000,000,
having special rights as set forth in this Article V and a preference
with respect to distributions (as set forth in Section 8.01(a)) and
liquidation (as set forth in Section 13.02) (the "Class B Preferred
Interests").
SECTION 5.02. Ranking. (a) Except as otherwise provided herein, with
respect to periodic distribution rights and rights upon liquidation,
dissolution or winding up, the Preferred Interests shall rank (i) junior to
the Partnership Debt and any other of the Partnership's future indebtedness
and other obligations not incurred in violation of this Agreement, (ii) on
parity with one another and (iii) senior to the Common Interests.
(b) Other than the Class A Preferred Interests and the Class B
Preferred Interests issued pursuant to this
16
Agreement on the Effective Date, no Class A Preferred Interests or Class B
Preferred Interests shall be issued.
(c) Subject to Section 5.05(a)(i), the Preferred Interests shall be
the most senior preferred equity interests in the Partnership. The Preferred
Interests shall have no Participation Percentage, and shall not be entitled to
participate in distributions made pursuant to Section 8.01(b).
SECTION 5.03. PIK Accretion. (a) The Face Value of the Class A
Preferred Interests shall accrete at a rate of 5.0% per annum and (b) the Face
Value of the Class B Preferred Interests shall accrete at a rate of 1.4% per
annum, in each case beginning on the Closing Date, and the Face Value of each
such Preferred Interest shall increase accordingly on the last day of each
calendar quarter.
SECTION 5.04. Consent Right. The consent of the Partners who hold
the majority of the aggregate amount of a class of Preferred Interests,
determined based on the Face Value thereof, voting as a separate class, shall
be required for any amendment, alteration or repeal of the provisions of this
Agreement (including by merger, consolidation or otherwise) that would have an
adverse effect on the rights of such class or that would be materially adverse
to the rights of such Partners under this Agreement.
SECTION 5.05. Negative Covenants. (a) For so long as the Class A
Preferred Interests are outstanding, the Partnership shall not, and shall not
permit any subsidiary of the Partnership, without the prior consent of the
Partners holding the Class A Preferred Interests to:
(i) issue any equity interests in the Partnership that rank senior
to, or pari passu with, the Preferred Interests, or issue any security
that is exchangeable for or convertible into any such equity interest;
(ii) issue any other preferred equity interests in the Partnership
redeemable or exchangeable for or convertible into any equity security of
the Partnership or any subsidiary thereof (other than Common Interests),
or issue any security that is exchangeable for or convertible into cash,
cash equivalents or any such preferred equity interest described in this
clause (ii);
(iii) Transfer any assets other than in the ordinary course of
business of the Partnership unless, (x) at least 50% of the net proceeds
of such sale, transfer or
17
disposition are retained or otherwise redeployed by the Partnership or
its subsidiaries and (y) at the time of such Transfer the Partnership has
a Consolidated Tangible Net Worth of at least $4,000,000,000;
(iv) create, incur, assume, guarantee or permit to exist any
Indebtedness other than (A) the Partnership Debt or (B) Indebtedness in
an aggregate outstanding principal amount not to exceed $800,000,000 at
any time;
(v) merge with or into or consolidate with (in each case within the
meaning of Treasury Regulation Section 1.708-1(c)), or convert into or
otherwise become, by any statutory mechanism, any other Person (other
than a wholly owned subsidiary of the Partnership), if immediately after
giving effect to such merger, consolidation or conversion, the
Partnership would be in violation of clause (i) or, unless such covenants
shall be inapplicable as provided below, clause (ii), (iii) or (iv)
above, or any other provision of this Agreement relating to the Class A
Preferred Interests;
(vi) liquidate, dissolve or wind up the Partnership; or
(vii) become an "investment company" as defined in the Investment
Company Act of 1940, as amended.
The covenants set forth in this Section 5.05(a), other than those set forth in
clause (i), (v), (vi) and (vii) shall not be applicable at a particular time,
if at such time the Partnership shall have posted an irrevocable letter of
credit in a form that is reasonably acceptable to the Partner holding the
Class A Preferred Interests in favor of such Partner (1) in an amount equal to
the expected Face Value of the Class A Preferred Interests at maturity and (2)
with an expiration date falling no earlier than the maturity date of the Class
A Preferred Interests.
(b) Unless Vivendi shall have made the election described in Section
7.02(b)(ii) of the Transaction Agreement, for a period of 15 years following
the Effective Time, or if a shorter period is set forth in this Section
5.05(b), then for such shorter period, without the consent of USAi, the
Partnership shall not:
(i) sell or otherwise dispose of all or any part of the assets set
forth on Schedule 5.05(b) other than in the ordinary course of business
and other than sales
18
or other dispositions of assets the fair market values of which, as of
the Effective Time, do not, individually or in the aggregate, exceed
$5,000,000;
(ii) notwithstanding anything in Sections 8.04 and 13.03 to the
contrary, for a period of seven years following the Effective Time,
distribute any assets in kind to USAi or USANi Sub, or distribute any of
the assets set forth on Schedule 5.05(b);
(iii) pay (whether voluntarily or involuntarily) all or any part of
the principal amount of the Partnership Debt prior to the maturity of
such debt (without giving effect to any acceleration thereof) (provided,
however, that beginning 2 years after the Effective Time, the Partnership
may, from time to time, pay a part of the principal amount of the
Partnership Debt; provided that no such payment shall be permitted to the
extent such payment would exceed USAi Sub's tax basis in its interest in
the Partnership);
(iv) for a period of two years following the Effective Time, make
any distributions to USAi or USANi Sub other than distributions permitted
under Section 8.01(a) or Section 8.02 or which constitute operating cash
flow distributions within the meaning of Treasury Regulation Section
1.707-4(b) (unless the facts and circumstances would clearly establish
that any such distribution is part of a sale);
(v) change the organizational structure with respect to any Person
set forth on Schedule 5.05(b), including, for the avoidance of doubt,
taking any action or failing to take any action which action or inaction
would cause USAi Cable or Studios USAi (each as defined in the
Transaction Agreement) to be treated as other than a partnership for U.S.
federal income tax purposes;
(vi) cause or permit any Partner or any Person related to a Partner
(within the meaning of Treasury Regulation Section 1.752-4(b)) to bear
the "economic risk of loss" (within the meaning of Treasury Regulation
Section 1.752-2(b)) with respect to the Partnership Debt; or
(vii) take any action, or fail to take any action, which action or
inaction would cause the Partnership to cease to be qualified as a
limited liability limited partnership under and pursuant to the Delaware
Act and DRUPA (including any failure to make the annual filings
19
provided under Section 17-214(a)(1) of the Delaware Act and Section
15-1003 of DRUPA).
SECTION 5.07. No Other Consent Rights. Except as provided in
Sections 5.04 and 5.05, holders of Preferred Interests shall have no voting,
approval or consent rights, including with respect to any merger, conversion
or consolidation of the Partnership.
ARTICLE VI
Common Interests
SECTION 6.01. General. (a) As of the Effective Time, the
participation percentage (the "Participation Percentage") of each Partner's
Common Interest shall be as set forth below:
Partner Participation Percentage
Universal Sub 93.06%
USAi 0.54%
USANi Sub 4.90%
▇▇▇▇▇▇ 1.50%
(b) Such initial Participation Percentages shall be subject to
adjustment as provided in this Article VI. The aggregate outstanding
Participation Percentages at all times shall equal 100%, and Participation
Percentages shall be adjusted from time to time, pro rata, as necessary to
maintain the foregoing.
SECTION 6.02. Issuances of Common Interests After the Closing Date.
(a) After the Closing Date the Partnership, at the discretion of the Board
(or, if no Board shall then be constituted, the General Partner), may issue
additional Common Interests in return for additional Capital Contributions.
(b) In connection with the issuance of a Common Interest after the
Closing Date, the Board shall designate the Participation Percentage
associated with such issuance and any other material terms thereof. Upon such
issuance, the Participation Percentages of all Common Interests outstanding
immediately before such issuance shall be reduced in the aggregate by an
amount equal to the Participation Percentage so designated, in proportion to
their relative Participation Percentages immediately before such issuance.
20
SECTION 6.03. Preemptive Rights. (a) For so long as USAi and its
Affiliates shall have an aggregate Participation Percentage of greater than 1%
(or at least 1% in the event that USAi and its Affiliates shall have an
aggregate Participation Percentage of no less than 1% due to any reason other
than a failure by USAi to exercise its right under this Section 6.03), in
connection with any issuance of additional Common Interests by the Partnership
to Universal Sub or an Affiliate thereof under Section 6.02(a) prior to the
exercise of an USAi Put or an USAi Call, USAi (or USANi Sub) shall have the
right to purchase, at the same time, on the same terms and at the same
purchase price per Participation Percentage point (or in the event Common
Interests are being issued in exchange for property, an amount of cash equal
to the fair market value of the property being contributed), an amount of
Common Interests (x) equal to a portion of the Common Interests being issued
by the Partnership that is in proportion to the relative Participation
Percentages of USAi and its Affiliates and Universal Sub and its Affiliates,
in each case immediately prior to the issuance giving rise to USAi's rights
under this Section 6.03, or (y) such that, after giving effect to such
issuance, USAi and its Affiliates would have an aggregate Participation
Percentage equal to 1%.
(b) In connection with any issuance of additional Common Interests
by the Partnership to Universal Sub or an Affiliate thereof under Section
6.02(a) after the exercise of an USAi Put or an USAi Call, if USAi and its
Affiliates shall have an aggregate Participation Percentage of at least 1%,
USAi (or USANi Sub) shall have the right to purchase, at the same time, on the
same terms of such issuance and at the same price per Participation Percentage
point (or in the event Common Interests are being issued in exchange for
property, an amount of cash equal to the fair market value of the property
being contributed), an amount of Common Interests such that, after giving
effect to such issuance, USAi and its Affiliates would have an aggregate
Participation Percentage equal to 1%.
(c) The Partnership shall deliver written notice to USAi of any
proposed issuance of Common Interests by the Partnership to Universal Sub and
its Affiliates, including the applicable purchase price, the amount offered,
the proposed closing date, the place and time for the issuance thereof (which
shall be no less than 20 days from the date of such notice) and any other
material terms and conditions of the issuance. Within 15 days from the date of
receipt of such notice, USAi shall deliver written notice to the Partnership
if it intends to exercise its right under
21
Section 6.03(a) or (b). Upon exercising such right, USAi shall be entitled and
obligated to purchase the amount of Common Interests determined in accordance
with Section 6.03(a) on the terms and conditions of such issuance, and
Universal Sub shall be entitled and obligated to purchase the remaining amount
of Common Interests in such issuance. Thereafter, the Participation
Percentages of all the Partners shall be adjusted in accordance with Section
6.02(a).
SECTION 6.04. Other Issuances of Common Interests. (a) For so long
as USAi and its Affiliates shall have an aggregate Participation Percentage of
at least 1%, in the event that any issuance under Section 6.02(a) to a Person
other than Universal Sub or an Affiliate thereof would result in USAi and its
Affiliates having an aggregate Participation Percentage of less than 1%, USAi
(or USANi Sub) shall have the right to purchase, on the same terms of such
issuance and at the same price per Participation Percentage point (or in the
event Common Interests are being issued in exchange for property, an amount of
cash equal to the fair market value of the property being contributed), an
amount of Common Interests such that, after giving effect to such issuance to
such Person and to USAi, USAi and its Affiliates would have an aggregate
Participation Percentage equal to 1%.
(b) The Partnership shall deliver written notice to USAi of such
proposed issuance, including the applicable purchase price, the amount
offered, the proposed closing date, the place and time for the issuance
thereof (which shall be no less than 20 days from the date of such notice) and
any other material terms and conditions of the issuance. Within 15 days from
the date of receipt of such notice, USAi shall deliver written notice to the
Partnership if it intends to exercise its right under Section 6.04(a). Upon
exercising such right, USAi shall be entitled and obligated to purchase the
amount of Common Interests determined in accordance with Section 6.04(a) on
the terms and conditions of such issuance and the third party shall be
entitled and obligated to purchase the remaining amount of Common Interests in
such issuance. Thereafter, the Participation Percentages of all the Partners
shall be adjusted in accordance with Section 6.02(a).
SECTION 6.05. Contribution of Assets or Capital Stock by Universal
Sub. In connection with an acquisition by Universal Sub or an Affiliate
thereof of equity securities or assets of one or more third parties engaged in
the Business or any related business in which Universal Sub or its Affiliate
issued shares of capital stock or paid cash
22
or other consideration to such third party, Universal Sub or its Affiliate
may, in its sole discretion and upon the approval of the Board (or, if no
Board shall then be constituted, the General Partner), either (i) contribute
such acquired equity securities or assets to the Partnership in return for
cash or, to the extent permitted under Section 5.05, a promissory note with a
principal amount equal to the aggregate value (determined as set forth below)
of the consideration paid by Universal Sub or its Affiliate for such equity
securities or assets or (ii) contribute such acquired equity securities or
assets to the Partnership in return for Common Interests in the Partnership in
accordance with Section 6.02(a), subject to the provisions of Section 6.03.
The "purchase price" for any such Common Interests shall be deemed to be (i)
in the case of a contribution of equity securities or assets to the
Partnership on or prior to the first anniversary of the acquisition by
Universal Sub or an Affiliate of such equity securities or assets, the value
of the consideration paid by Universal Sub or its Affiliate for such equity
securities or assets, which consideration shall be valued at the same time it
was valued under the terms of the agreement with the applicable third party,
and (ii) in the case of a contribution of equity securities or assets to the
Partnership following the first anniversary of the acquisition by Universal
Sub or an Affiliate of such equity securities or assets, the fair market value
of such contributed equity securities or assets.
SECTION 6.06. Consent Right. Except for the General Partner, no
holder of Common Interests shall have any voting, approval or consent rights,
including with respect to any merger, conversion or consolidation of the
Partnership; provided, however, that (i) at all times a Partner holding Common
Interests shall have the right to consent to any amendment, alteration or
repeal of this Agreement that would have an adverse effect on the rights of
such Partner hereunder and (ii) for so long as an USAi Put or an USAi Call has
not been exercised and USAi has not exercised its rights under Section
6.03(a)(y), the consent of USAi shall be required prior to: (x) the entering
into, terminating, modifying or extending of any agreement, transaction or
relationship between the Partnership and any Affiliate of Vivendi that is not
on an arm's-length basis, and (y) the making of distributions in respect of,
redeeming, repurchasing or otherwise acquiring any Common Interests of
Universal Sub or any of its Affiliates, other than pro rata distributions,
redemptions, repurchases and acquisitions.
23
SECTION 6.07. Assignees of ▇▇▇▇▇▇ Common Interests. Any holder of a
beneficial interest in Common Interests that shall have received such interest
as an assignee of ▇▇▇▇▇▇ pursuant to Section 2.07 of the Transaction Agreement
hereby irrevocably appoints ▇▇▇▇▇▇ (or his executor, administrator or trustee,
as the case may be) as its or his designated representative for all purposes
under this Agreement and agrees (except to the extent otherwise provided in
Section 4.02) that (a) any action taken or waived by, or binding upon, ▇▇▇▇▇▇
(or his executor, administrator or trustee, as the case may be) with respect
to ▇▇▇▇▇▇'▇ Common Interests (including the provisions set forth in Section
10.03) shall be deemed taken or waived by, and binding upon, such assignee
with respect to such assignee's beneficial interest in ▇▇▇▇▇▇'▇ Common
Interests, (b) such assignee shall have no right to deal directly with the
Partnership or its Partners and the Partnership and its Partners shall deal
solely with ▇▇▇▇▇▇ in respect of all matters relating to such assignee's
interest in the Partnership, as if such assignment had never occurred,
including in respect of the provision of information, the giving of notices
and the payment of money, (c) such assignee shall have no right to attend
Partnership meetings, (d) all rights of a holder of Common Interests under
this Agreement or otherwise in connection with the Partnership shall be
exercisable only by ▇▇▇▇▇▇ (or his executor, administrator or trustee, as the
case may be) and (e) such assignee shall in all respects be subject to the
same terms under this Agreement (other than Section 9.04) as ▇▇▇▇▇▇ is subject
to hereunder. The General Partner shall treat any holder of a beneficial
interest in Common Interests who received such interest as an assignee of
▇▇▇▇▇▇ pursuant to Section 2.07 of the Transaction Agreement as a Partner in
the Partnership for income tax purposes with an interest in the Partnership
corresponding to such beneficial interest.
ARTICLE VII
Capital Accounts, Allocations of
Profit and Loss and Tax Matters
SECTION 7.01. Capital Accounts. (a) The Partnership shall establish
a separate capital account (a "Capital Account") in respect of each Common
Interest and Preferred Interest held by each Partner on the books of the
Partnership. The Capital Account of a Partner shall be increased by (i) the
amount of money contributed by that Partner to the Partnership, (ii) the fair
market value of property contributed by that Partner to the Partnership (net
24
of liabilities related to such contributed property that the Partnership is
considered to assume or take subject to under Section 752 of the Code) and
(iii) allocations to that Partner pursuant to Section 7.02 of profit, income
and gain (or items thereof). The Capital Account of a Partner shall be
decreased by (i) the amount of money distributed to that Partner by the
Partnership, (ii) the fair market value of property distributed to that
Partner by the Partnership (net of liabilities related to such distributed
property that such Partner is considered to assume or take subject to under
Section 752 of the Code) and (iii) allocations to that Partner pursuant to
Section 7.02 of loss, expense and deduction (or items thereof).
(b) In the event that a Partner Transfers its Interest in accordance
with the provisions of this Agreement, the Transferee of such Interest shall
succeed to the Capital Account of the Transferor attributable to such
Interest.
(c) Upon the occurrence of any event specified in Treasury
Regulation Section 1.704-1(b)(2)(iv)(f), the Capital Accounts of the Partners
shall be adjusted to reflect the fair market value of the Partnership's
property at such time and in such manner as provided in such Regulation.
(d) No Partner shall be entitled to withdraw capital or receive
distributions except as specifically provided herein. No Partner shall have
any obligation to the Partnership, to any other Partner or to any creditor of
the Partnership to restore any negative balance in the Capital Account of such
Partner.
(e) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to
comply with the Treasury Regulations promulgated under Section 704(b) of the
Code and shall be interpreted and applied in a manner consistent with such
Treasury Regulations.
SECTION 7.02. Allocations of Net Income and Net Loss. (a) General.
(i) Except as otherwise provided in this Section 7.02, Net Income shall be
allocated to the extent thereof:
(A) first, if any Net Loss has been allocated to the holders of
Preferred Interests under Section 7.02 (a)(ii)(B), to the holders of
Preferred Interests pro rata in proportion to the amount of Net Loss so
allocated until the aggregate Net Income allocated
25
under this paragraph (A) shall equal the aggregate amount of such Net
Loss;
(B) second, to the holders of Preferred Interests pro rata until the
aggregate amount allocated under this paragraph (B) equals a return of 5%
per annum on the Face Value of their Preferred Interests;
(C) third, if any Net Loss has been allocated to the holders of
Common Interests under Section 7.02(a)(ii)(A) or (C), to the holders of
Common Interests pro rata in proportion to the amount of Net Loss so
allocated until the aggregate Net Income allocated under this paragraph
(C) shall equal the aggregate amount of such Net Loss; and
(D) fourth, to the Partners in accordance with their Participation
Percentages.
(ii) Net Loss shall be allocated to the extent thereof:
(A) first, to the holders of Common Interests pro rata to the extent
of their respective Capital Accounts;
(B) second, to the holders of Preferred Interests pro rata to the
extent of their respective Capital Accounts; and
(C) third, to the Partners in accordance with their Participation
Percentages.
(b) Minimum Gain Charge Back. The Partnership shall allocate items
of profit among the Partners at such times and in such amounts as necessary to
satisfy the minimum gain charge back requirements of Treasury Regulation
Sections 1.704-2(f) and 1.704-2(i)(4).
(c) Allocation of Deductions Attributable to Partner Nonrecourse
Liabilities. Any nonrecourse deductions attributable to a "partner nonrecourse
liability" (as defined in Treasury Regulation Section 1.704-2(b)(4)) shall be
allocated among the Partners that bear the economic risk of loss for such
Partner's nonrecourse liability under Treasury Regulation Section 1.752-2 in
accordance with the ratios in which such Partners share such economic risk of
loss and in a manner consistent with the requirements of Treasury Regulation
Sections 1.704-2(c), 1.704-2(i)(2) and 1.704-2(j)(1).
26
(d) Qualified Income Offset. The Partnership shall specially
allocate items of profit and loss when and to the extent required to satisfy
the "qualified income offset" requirement within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).
(e) Curative Allocations. The allocations set forth in Sections 7.02
(b), (c) and (d) (the "Regulatory Allocations") are intended to comply with
certain requirements of the Treasury Regulations. It is the intent of the
Partners that, to the extent possible, the Partnership shall make such special
allocations of Partnership income, gain, loss or deduction so that, after such
allocations are made, each Partner's Capital Account balance is, to the
greatest extent possible, equal to the Capital Account balance such Partner
would have had if the Regulatory Allocations were not part of the Agreement
and all Partnership items were allocated pursuant to Section 7.02(a) and (f)
hereof.
(f) Allocations in Liquidation and upon Maturity of Class A
Preferred Interests. Upon a dissolution of the Partnership in accordance with
Article XIII, the Net Income or Net Loss (or items of profit, income, gain,
loss, deduction and expense) of the Partnership shall be allocated to the
Partners so that the balance in each Partner's Capital Account as of the date
of dissolution shall equal the amount distributable to such Partner pursuant
to Section 13.02. In the case of any distribution made at the maturity of a
Class A Preferred Interest in accordance with Section 8.06, Net Income or Net
Loss (or items of profit, income, gain, loss, deduction and expense) for the
taxable period of the Partnership in which such distribution is made shall be
allocated so that the Capital Account of each holder of such Class A Preferred
Interest shall, as of the date of distribution, equal the amount to be
distributed to such holder pursuant to Section 8.06.
SECTION 7.03. Allocations of Net Income and Net Loss for Federal
Income Tax Purposes. Except as provided in the following sentence, profit,
income, gain, loss, deduction and expense as determined for Federal income tax
purposes shall be allocated among the Partners in the same proportions as the
corresponding items of "book" profit, income, gain, loss, deduction and
expense are allocated among such Partners pursuant to Section 7.02.
Notwithstanding the foregoing sentence, Federal income tax items relating to
any Section 704(c) Property shall be allocated among the Partners in
accordance with Section 704(c) of the Code and Treasury Regulation Section
1.704-3(c) to take into account the difference
27
between the fair market value and the tax basis of such Section 704(c)
Property as of the date of its contribution to the Partnership or its
revaluation pursuant to Section 7.01(c) using the "traditional method" as
described in Treasury Regulation Section 1.704-3(b). Items described in this
Section 7.03 shall neither be credited nor charged to the Partners' Capital
Accounts.
SECTION 7.04. Allocation of the Partnership Debt. The Partners
acknowledge that, for purposes of Section 752 of the Code and in accordance
with Treasury Regulation 1.752-3(a)(3), and consistent with allocations of
other significant items of Partnership income or gain, 100% of the Partnership
Debt shall be allocated pro rata among the Partners holding the Preferred
Interests.
SECTION 7.05. Elections. Except as otherwise expressly provided
herein, all elections required or permitted to be made by the Partnership
under the Code or other applicable tax law (including any election under
Section 754 of the Code), and all material decisions with respect to the
calculation of its taxable income or tax loss for tax purposes under the Code
or other applicable tax law, shall be made in such manner as may be determined
by the General Partner.
SECTION 7.06. Fiscal Year. The fiscal year of the Partnership for
tax and accounting purposes ("Fiscal Year") shall be the 12-month (or shorter)
period ending on December 31 of each year, unless otherwise determined by the
Board.
SECTION 7.07. Withholding Requirements. Notwithstanding any
provision herein to the contrary, the General Partner is authorized to take
any and all actions that are necessary or appropriate to ensure that the
Partnership satisfies any and all withholding and tax payment obligations
under Section 1441, 1445, 1446 or any other provision of the Code or other
applicable law. Without limiting the generality of the foregoing, the General
Partner may withhold any amount that it determines is required to be withheld
from amounts otherwise distributable to any Partner pursuant to this
Agreement; provided, however, that such amount shall be deemed to have been
distributed to such Partner for purposes of applying this Agreement. Each
Partner will timely provide any certification or file any agreement that is
required by any taxing authority in order to avoid any withholding obligation
that would otherwise be imposed on the Partnership.
28
SECTION 7.08. Tax Matters Partner. The General Partner shall act as
the "Tax Matters Partner" of the Partnership within the meaning of Section
6231(a)(7) of the Code and in any similar capacity under applicable state or
local tax law. The Tax Matters Partner shall not be liable in its capacity as
such to the Partnership or the Partners for any losses, claims or damages. All
reasonable out-of- pocket expenses incurred by the Tax Matters Partner while
acting in such capacity shall be paid or reimbursed by the Partnership.
ARTICLE VIII
Distributions
SECTION 8.01. Distributions. (a) The Partnership shall make
cumulative preferential distributions to holders of the Class B Preferred
Interests at a rate of 3.6% per annum of the Face Value of such holder's
Preferred Interests (without taking into account any adjustments thereto made
on the date of such distribution), which distributions shall begin to accrue
on the Closing Date. Distributions shall be payable in cash in quarterly
installments on the last Business Day of each calendar quarter. Any delay or
deferral of distributions required by this Section 8.01 or Section 8.02,
including upon a breach of this Section 8.01(a), shall accrue interest
commencing on the applicable due date and continuing through to the date of
payment at an annual rate equal to USAi's effective cost of borrowing,
expressed as a percentage, as of the applicable due date.
(b) At the times and in the amounts determined by the General
Partner, subject to Section 5.05(b), the Partnership may make distributions to
holders of Common Interests pro rata in accordance with the respective
Participation Percentages of such Common Interests; provided that no
distributions may be made with respect to the Common Interests unless all past
due distributions on the Preferred Interests have been made as of the date of
payment.
(c) To the extent any distribution to a Partner provided herein in
respect of a Common Interest or a Preferred Interest would exceed the balance
of such Partner's Capital Account relating to such Common Interest or
Preferred Interest, the distribution of such excess shall be deferred and
shall be made (prior to any other distribution pursuant to this Section 8.01)
when and to the extent that the balance of such Capital Account is increased.
29
SECTION 8.02. Tax Distributions. The Partnership shall, as soon as
practicable after the close of each taxable year, make cash distributions to
each Partner in an amount equal to the product of (a) the amount of taxable
income allocated to such Partner for such taxable year pursuant to Section
7.02, reduced by the amount of taxable loss allocated to such Partner for all
prior taxable years (except to the extent such taxable losses have previously
been taken into account under this sentence) and (b) the highest aggregate
marginal statutory Federal, state, local and foreign income tax rate
(determined taking into account the deductibility of state and local income
taxes for Federal income tax purposes and the creditability or deductibility
of foreign income taxes for Federal income tax purposes) applicable to any
Partner.
SECTION 8.03. General Limitations. (a) Notwith standing anything in
this Agreement to the contrary, the Partnership, and the General Partner on
behalf of the Partnership, is not required to make any distributions except to
the extent permitted under the Delaware Act.
(b) Holders of Preferred Interests shall not be entitled to any
distributions in excess of the distributions set forth in this Article VIII
and Article XIII.
SECTION 8.04. Distributions in Kind. The Partnership shall not
distribute any assets in kind, except as provided in Section 13.03.
SECTION 8.05. Closing Date Distribution. At the Effective Time, the
Partnership shall use the net proceeds of the Partnership Debt to make a cash
distribution to USANi Sub in the amount of $1,618,710,396.
SECTION 8.06. Distribution Upon Maturity of Class A Preferred
Interests. On the twentieth anniversary of the Closing Date (the "Maturity
Date"), the Class A Preferred Interests shall be redeemed by the Partnership
by payment to the holder thereof of a distribution in cash equal to the Face
Value thereof as of such date (after taking into account any accretion in the
Face Value pursuant to Section 5.03 through and including the date of
redemption). Following such payment, the Class A Preferred Interests shall
cease to be outstanding and all the rights of the holders thereof shall cease.
SECTION 8.07. Put/Call Rights with Respect to Class B Preferred
Interests. (a) Beginning on the twentieth anniversary of the Closing Date, (i)
subject to Section 160 of the Delaware General Corporation Law, Vivendi and/or
30
Universal shall have the right to purchase all (but not less than all) the
Class B Preferred Interests of USAi and its Affiliates (the "USAi Preferred
Call"), and (ii) USAi shall have the right to require Universal to purchase
all (but not less than all) its and its Affiliates' Class B Preferred
Interests (the "USAi Preferred Put"), in each case at a purchase price equal
to (A) a number of shares of USAi Common Shares equal to the lesser of (x) the
number of shares (rounded up to the nearest whole share) of USAi Common Shares
having a Market Value equal to the Face Value as of such date (after taking
into account any accretion in the Face Value pursuant to Section 5.03 through
and including such date) of the Class B Preferred Interests or (y) 56,611,308
shares of USAi Common Stock (as adjusted for any stock splits, stock dividends
or other similar transactions after the Effective Time), and (B) cash equal to
any accrued and unpaid distributions pursuant to Section 8.01(a)
(collectively, the "Class B Preferred Consideration"). Universal shall have
the right to substitute cash for the portion of the USAi Common Shares
deliverable in the form of USAi Common Stock as set forth in Section 4.17 of
the Transaction Agreement, based on the Market Value of such USAi Common
Stock.
(b) In the event that USAi Common Shares cease to be outstanding
following the Effective Time, references to each USAi Common Share in this
Section 8.07 shall refer instead to the cash (plus interest accruing at an
annual rate equal to USAi's effective cost of borrowing, expressed as a
percentage, as of the applicable date on which such cash is delivered in such
exchange or conversion) or other securities or property into which each such
USAi Common Share was exchanged for or converted into after the Effective
Time, including any successive exchange or conversion.
(c) Upon consummation of an USAi Preferred Put or an USAi Preferred
Call, the maturity of the Class B Preferred Interests shall be immediately
accelerated, and the Class B Preferred Interests shall be redeemed by the
Partnership by payment to the holder thereof of a distribution in cash equal
to the Face Value thereof as of such date (after taking into account any
accretion in the Face Value pursuant to Section 5.03 through and including the
date of redemption). Following such payment, the Class B Preferred Interests
shall cease to be outstanding and all the rights of the holders thereof shall
cease.
31
ARTICLE IX
Management of the Partnership
SECTION 9.01. General Partner. (a) The business and affairs of the
Partnership shall be managed exclusively by the General Partner in a manner
consistent with this Agreement, without the need for, except as set forth in
Section 5.04, 5.05 or 6.06, any consent or approval of any other Partner.
Subject to Section 9.02 and the terms of this Agreement, the General Partner
shall have the exclusive power and authority, on behalf of the Partnership, to
collect and distribute funds in accordance with Article VIII to make
allocations and adjustments in accordance with Article VII and to take any
action of any kind not inconsistent with this Agreement and to do anything and
everything it deems necessary or appropriate to carry on the business and
purposes of the Partnership in a manner consistent with this Agreement. No
other Partner shall participate in the management and control of the business
of the Partnership, and in no event shall any Partner other than the General
Partner have any authority to bind the Partnership for any purpose. Persons
dealing with the Partnership are entitled to rely conclusively upon the power
and authority of the General Partner.
(b) The General Partner is, to the extent of its rights and powers
set forth in this Agreement, an agent of the Partnership for the purpose of
the Partnership's business, and the actions of the General Partner taken in
accordance with such rights and powers shall bind the Partnership.
SECTION 9.02. Board; Representatives; Chairman. (a) The General
Partner shall be responsible for the establishment of policy and operating
procedures with respect to the business and affairs of the Partnership and
shall appoint agents or employees, with such titles as the General Partner may
select, including a chief executive officer, as officers of the Partnership to
act on behalf of the Partnership, with such power and authority as the General
Partner may designate from time to time to any such Person. The initial chief
executive officer shall serve at his will and at the pleasure of the General
Partner, shall report directly to the chief executive officer of the General
Partner who shall be the chief executive officer of Vivendi and shall have the
same authority to act for the Partnership as a corresponding officer of a
Delaware corporation would have to act for a Delaware corporation. ▇▇▇▇▇▇
shall be the initial chief executive officer of the Partnership. The other
officers of the Partnership shall
32
report to the General Partner or the chief executive officer, as determined by
the General Partner; provided that, as of the Effective Date and for so long
as ▇▇▇▇▇▇ is the chief executive officer, officers of the Partnership shall
report to the chief executive officer.
(b) The General Partner may, at its election, appoint a Board of
Directors or other governing body (a "Board") to oversee the policy and
operating procedures with respect to the business and affairs of the
Partnership, provided, however, that the appointment of a Board shall not
alter in any respect the reporting obligations of the chief executive officer.
In the event that the General Partner appoints a Board, it shall appoint all
of the members of the Board (the "Representatives"), which shall include each
of ▇▇▇▇▇▇ as a Representative for so long as he remains an officer of the
Partnership and otherwise, one Person designated by USAi and reasonably
satisfactory to the General Partner as a Representative for so long as USAi
and its Affiliates shall have a Participation Percentage in excess of 1%,
provided that an USAi Put or an USAi Call has not been exercised and USAi has
not exercised its rights under Section 6.03(a)(y). For so long as ▇▇▇▇▇▇ is
chief executive officer of the Partnership, ▇▇▇▇▇▇ shall also be Chairman of
the Board ("Chairman"). The General Partner, in consultation, with the chief
executive officer, shall establish whatever procedures it deems necessary and
appropriate for operating and governing the business of the Partnership.
(c) No Representative shall be entitled to any fee, remuneration,
compensation or expense reimbursement in connection with their service at
Board meetings.
SECTION 9.03. Expenses. (a) The Partnership shall pay or reimburse
the General Partner for all out-of- pocket expenses reasonably incurred by the
General Partner in performing its duties as the General Partner. Except as
provided in Section 7.08 and this Section 9.03, the General Partner shall not
be entitled to any salary or other compensation for its services to the
Partnership as General Partner.
(b) The Partnership shall pay or reimburse ▇▇▇▇▇▇ and any other USAi
employee who is an officer of the Partnership for all out-of-pocket expenses
directly related to the performance by ▇▇▇▇▇▇ or such other Person of his
duties as an officer of the Partnership.
SECTION 9.04. Agreement Not To Compete. (a) ▇▇▇▇▇▇ understands that
the Partnership shall be
33
entitled to protect and preserve the going concern value of USAi's Existing
Business (as "Existing Business" is defined in the Transaction Agreement) and
the Partnership to the extent permitted by law and that Universal would not
have entered into this Agreement absent the provisions of this Section 9.04
and, therefore, for a period from the Closing Date until the date that is the
earlier of (A) the later of (1) 18 months after the Closing Date and (2) six
calendar months after the date upon which ▇▇▇▇▇▇ ceases to be the chief
executive officer of the Partnership and (B) three years after the Closing
Date, ▇▇▇▇▇▇ shall not, and shall cause each of its Affiliates not to,
directly or indirectly:
(i) engage in the Restricted Business or acquire any interest in any
Person engaged in the Restricted Business; and
(ii) (A) solicit, recruit or hire any employees of USAi's Existing
Business or the Partnership or Persons who have worked for USAi's
Existing Business or the Partnership, in each case other than employees
who perform solely clerical functions for such Persons, (B) solicit or
encourage any employee of USAi's Existing Business or the
Partnership to leave the employment of USAi's Existing Business or the
Partnership, in each case other than employees who perform solely
clerical functions for such Persons, and (C) disclose or furnish to
anyone any confidential information relating to USAi's Existing Business
or the Partnership or otherwise use such confidential information for its
own benefit or the benefit of any other Person; provided that the
non-solicitation provisions of clauses (A) and (B) shall be deemed not
breached by any advertisement or general solicitation that is not
specifically targeted at the employees or Persons referred to therein;
provided that, if at any time after 18 months after the Closing Date,
▇▇▇▇▇▇ resigns as chief executive officer of the Partnership for Good
Reason or ▇▇▇▇▇▇'▇ employment is terminated without Cause, then the
restrictions set forth in this Section 9.04(a) shall cease to apply on
and from the effective date of such resignation or termination.
(b) This Section 9.04 shall be deemed not breached as a result of
(i) the ownership by ▇▇▇▇▇▇ or any of his Affiliates of interests in the
Partnership, or of investments in any class of stock of any entity, public or
private, engaged, directly or indirectly, in the Restricted Business so long
as ▇▇▇▇▇▇ does not serve as a director, an
34
officer, a consultant or as an employee of such entity and is not otherwise
engaged in the management or operations of such entity, (ii) ▇▇▇▇▇▇'▇
engagement in not-for-profit or charitable activities related to the Business,
whether on boards or otherwise, (iii) ownership of Vivendi Ordinary Shares as
the result of the exercise of a Put or a Call or (iv) ▇▇▇▇▇▇'▇ position as a
member of any board of directors (including on any committees thereof) on
which he is a board member on the date hereof.
(c) ▇▇▇▇▇▇ agrees that the covenant in Section 9.04(a) is reasonable
with respect to its duration and scope. If, at the time of enforcement of this
Section 9.04, a court holds that the restrictions stated herein are
unreasonable under the circumstances then existing, the parties hereto agree
that the period and scope legally permissible under such circumstances will be
substituted for the period and scope stated herein.
ARTICLE X
Transfers of Interests
SECTION 10.01. Restrictions on Transfers. (a) Except as permitted in
this Article X, without the prior written consent of the General Partner,
neither USAi nor ▇▇▇▇▇▇ shall directly or indirectly Transfer all or any part
of their respective Interests, or any rights to receive capital, profits or
distributions of the Partnership pursuant thereto. To the fullest extent
permitted by law, any such Transfer in violation of this Agreement shall be
null and void.
(b) It shall be a condition to any Transfer not prohibited by this
Article X that such Transfer shall comply with the provisions of the
Securities Act and applicable state securities laws. Until any Interest has
been registered under the Securities Act, such Interest may not be offered or
sold except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable state
securities laws.
(c) It shall also be a condition to any Transfer not prohibited by
this Article X that no applicable law or judgment issued by any governmental
entity shall be in effect, and all consents of, or declarations or filings
with, or expirations of waiting periods imposed by, any governmental entity
necessary for the consummation of such Transfer shall have been obtained or
filed or shall have
35
occurred, and each Partner agrees to cooperate with the other Partners to
provide such information and make such filings as shall be necessary to
satisfy as promptly as practicable the foregoing conditions in connection with
a proposed Transfer.
SECTION 10.02. Transfers Permitted at any Time. (a) At any time and
from time to time, so long as such Transfer would not reasonably be expected
to result in any materially adverse tax consequences to any other Partners,
(i) USAi or USANi Sub may Transfer all, but not less than all, of its Interest
to USAi or a wholly owned subsidiary of USAi (including any subsidiary that is
not wholly owned solely as a result of the fact that Home Shopping Network,
Inc. is not a wholly owned subsidiary of USAi, so long as Liberty and USAi
remain the only shareholders of Home Shopping Network, Inc. and Light's
ownership percentage of Home Shopping Network, Inc. does not increase
materially from its interest as of the Closing Date) and USANi Sub may
Transfer all, but not less than all, of its Interest to a wholly owned
subsidiary of Universal Sub and (ii) USAi or USANi Sub may pledge or grant a
security interest in, or place in trust, its Preferred Interests in connection
with a bona fide indebtedness or hedging transactions; provided, however, that
the terms of such indebtedness or hedge shall not permit or enable under any
circumstance, including in the event of a default thereunder, the pledgee of
such indebtedness or party to such hedge to foreclose upon or otherwise
acquire any Preferred Interests, it being understood that USAi, USANi Sub
and/or one of their wholly owned subsidiaries shall in all cases be the only
holder(s) of the Preferred Interests.
(b) In respect of holders of Interests that are individuals, a
Transfer may be made upon or subsequent to the death of such holder to the
executors, administrators, legatees or beneficiaries of such deceased holder,
provided that such transferees shall (i) in aggregate be treated as a single
Partner for all purposes under this Agreement and (ii) upon such Transfer,
sign a counterpart to this Agreement or other similar document of accession,
in each case in a customary form, agreeing to be bound by the terms of this
Agreement (other than Section 9.04) to the same extent that the transferor was
so bound.
SECTION 10.03. Put/Call Rights. (a)(i) At any time, and from time to
time, after the fifth anniversary of the Closing Date, Universal shall have
the right to purchase all (but not less than all) the Common Interests of USAi
and its Affiliates (the "USAi Call"), and (ii) at any time, and from time to
time, after the eighth anniversary of the
36
Closing Date, USANi Sub shall have the right to require Universal to purchase
all (but not less than all) its and its Affiliates' Common Interests (the
"USAi Put"), in each case at a purchase price equal to the Appraised Value
thereof. Notwithstanding the foregoing, for so long as USAi or its Affiliates
shall be the holder of any Preferred Interests, at the election of USANi Sub,
any Call or Put under this Section 10.03(a) shall only be applicable to a
portion of the Common Interests of USANi Sub and its Affiliates such that upon
the consummation of the applicable purchase and sale USAi and its Affiliates
would retain a Participation Percentage of 1%, and in such event the
determination of Appraised Value shall only apply to the portion of the Common
Interests of USAi and its Affiliates subject to such Call or Put.
(b)(i) At any time after the first anniversary of the Closing Date,
▇▇▇▇▇▇ (or his executor, administrator or trustee, as the case may be) shall
have the right to sell all (but not less than all) its Common Interests to
Universal (the "▇▇▇▇▇▇ Put"), and (ii) at any time after the later of (A) the
second anniversary of the Closing Date and (B) such time that ▇▇▇▇▇▇ is no
longer chief executive officer of the Partnership, Universal shall have the
right to purchase all (but not less than all) the Common Interests of ▇▇▇▇▇▇
(the "▇▇▇▇▇▇ Call"), in each case at a purchase price equal to the greater of
(x) the Appraised Value thereof and (y) $275,000,000. In the event that
▇▇▇▇▇▇'▇ employment is terminated without Cause or as a result of his death,
▇▇▇▇▇▇ terminates his employment for Good Reason or ▇▇▇▇▇▇ becomes Disabled,
the ▇▇▇▇▇▇ Put shall become thereafter exercisable (by ▇▇▇▇▇▇, or his
executor, administrator, or trustee, as the case may be) immediately upon such
termination or upon becoming Disabled.
(c) A Call or a Put may be exercised by the applicable Partner by
providing notice to the other Partner in accordance with Section 14.01. The
purchase and sale of the Selling Partner's Common Interests shall be
consummated at a closing the date and time of which shall be selected by the
Purchasing Partner and provided in writing at least seven days prior thereto;
provided that such date shall not be later than the 20th Business Day
following the date of the determination of the Appraised Value. Except as set
forth in Section 10.03(e), at such closing, the Purchasing Partner shall cause
to be paid to the Selling Partner the applicable purchase price, by wire
transfer of immediately available funds, against delivery by the Selling
Partner of one or more duly executed assignments and bills of sale (in form
and substance reasonably satisfactory to the Purchasing Partner, but in any
event which shall not include any
37
provision for indemnification) assigning its Common Interests to the
Purchasing Partner, free and clear of any Liens.
(d) The Appraised Value shall be determined as follows:
(i) subject to clause (iii) below, within 15 days from the date of
notice given pursuant to Section 10.03(c), the Selling Partner and the
Purchasing Partner shall each notify the other and the Partnership in
writing of their respective selection of an Investment Bank; provided
that if either such party fails to notify the other of its selection
within such period, the determination of the Appraised Value of such
Common Interests shall be rendered by the single Investment Bank already
selected, within 45 days from the date of its selection, by notice to all
the foregoing parties, and such determination shall be deemed to be the
Appraised Value of such Common Interests and shall be final for purposes
hereof;
(ii) within 45 days from the date of their selection, the Selling
Partner's Investment Bank and the Purchasing Partner's Investment Bank
shall jointly notify the Selling Partner and the Purchasing Partner in
writing of their determination of the Appraised Value of such Common
Interests (determined as set forth in the definition thereof), or, if
such Investment Banks are unable to agree on such a value (unless the
lower individual valuation is within 10% of the higher individual
valuation, in which case the two valuations shall be averaged), of their
selection of a third Investment Bank, in which case such Investment Banks
shall notify such third Investment Bank in writing of their respective
determinations of the Appraised Value concurrently with the delivery of
the notice described above, following which such third Investment Bank
shall, within 30 days, notify all of the foregoing parties of its
selection of one of the two original determinations of the Appraised
Value, (the "Selected Appraisal"), which Selected Appraisal shall be
chosen by such third Investment Bank based on its determination that the
Selected Appraisal more closely reflected the Appraised Value of such
Common Interests (determined as set forth in the definition thereof) than
the other original determination. The Selected Appraisal shall be deemed
to be the Appraised Value of such Common Interests and shall be final for
purposes hereof. The costs of such determination process shall
38
be borne equally by the Purchasing Partner and the Selling Partner; and
(iii) if at any time prior to the second anniversary of the Closing
Date ▇▇▇▇▇▇ ceases to serve as the chief executive officer of the
Partnership, Universal and ▇▇▇▇▇▇ shall promptly initiate the process set
forth in clauses (i) and (ii) above to determine the Appraised Value of
the Partnership as of the time of such cessation, and such Appraised
Value shall be deemed to be the Appraised Value of the Partnership with
respect to the subsequent exercise of a ▇▇▇▇▇▇ Put or a ▇▇▇▇▇▇ Call.
(e) At the election of the Purchasing Partner, payment of the
purchase price upon the exercise of a Call or a Put may be made in Vivendi
Ordinary Shares having a Market Value at the time of closing equal to the
applicable purchase price set forth in Section 10.03(a) or Section 10.03(b),
in which case the Selling Partner shall be entitled to the rights set forth in
Section 10.03(f) and 10.03(g). At the closing of any Put or Call pursuant to
this Section 10.03(e), Universal shall deliver to USAi or ▇▇▇▇▇▇, as the case
may be, validly issued Vivendi Ordinary Shares (or, if ▇▇▇▇▇▇ requests, other
common equity securities of Vivendi listed on an exchange other than that on
which the Vivendi Ordinary Shares are listed and representing an equivalent
number of Vivendi Ordinary Shares) free and clear of all Liens (other than
Permitted Liens). The ability of any successor or new parent entity to Vivendi
to issue shares hereunder shall be subject to (i) satisfaction of the trading
volume provisions of the definition of Vivendi Ordinary Shares and (ii) the
Selling Partner receiving less than 5% of the outstanding common stock or
ordinary shares of such successor or new parent entity in such issuance.
(f) (i) Vivendi shall provide the Selling Partner with, and the
Selling Partner shall be entitled to, customary registration rights relating
to any Vivendi Ordinary Shares received pursuant to Section 10.03(e)
(including the ability to transfer registration rights (but not to exceed in
the aggregate the total number of registration rights to which the Selling
Partner is entitled under Section 10.3(f)(ii) in connection with the sale or
other disposition of all or a portion of its Vivendi Ordinary Shares). In the
event Vivendi Ordinary Shares are listed or quoted on more than one national
securities exchange (or Nasdaq), whether in the form of shares, depositary
shares or receipts therefor, the Selling Partner may elect the type of
security (or combination of
39
securities) to be issued to it (such securities sometimes being referred to in
paragraph (g) or this paragraph (f) of Section 10.03 as "Vivendi Ordinary
Shares") and such securities shall be issued in an aggregate amount
representing the amount of the Vivendi Ordinary Shares that would otherwise
have been issued. Vivendi, each of the Partners and the Partnership each
hereby agrees to cooperate and use its reasonable best efforts to provide for
the prompt marketability of the Vivendi Ordinary Shares to be received
hereunder, including, if requested by USAi or ▇▇▇▇▇▇, as applicable, through
the advance preparation and filing by Vivendi of (x) a registration statement
in order that such registration statement may become effective simultaneously
with the closing of the Put or Call giving rise to the registration rights
under this paragraph (f), and (y) any other regulatory filings or notices.
(ii) If requested by a Selling Partner, Vivendi shall be required
promptly to cause the Vivendi Ordinary Shares owned by such Selling Partner or
its Affiliates to be registered under the Securities Act and/or any applicable
securities laws of any foreign jurisdiction in order to permit such Selling
Partner or such Affiliate to sell such shares in one or more (but not more
than, in the case of USAi, three, and in the case of ▇▇▇▇▇▇, two) registered
public offerings (each, a "Demand Registration"). Each Selling Partner shall
also be entitled to customary piggyback registration rights and, except
pursuant to agreements in effect on the date hereof, no other Person shall be
entitled to piggyback registration rights with respect to a Selling Partner's
Demand Registration, without such Selling Partner's consent. If the amount of
shares sought to be registered by a Selling Partner and its Affiliates
pursuant to any Demand Registration is reduced by more than 25% pursuant to
any underwriters' cutback, then such Selling Partner may elect to request
Vivendi to withdraw such registration, in which case, such registration shall
not count as one of such Selling Partner's Demand Registrations. If a Selling
Partner requests that any Demand Registration be an underwritten offering,
then such Selling Partner shall select the underwriter(s) to administer the
offering, provided that such underwriter(s) shall be reasonably satisfactory
to Vivendi. If a Demand Registration is an underwritten offering and the
managing underwriter advises the Selling Partner initiating the Demand
Registration in writing that in its opinion the total number or dollar amount
of securities proposed to be sold in such offering is such as to materially
and adversely affect the success of such offering, then Vivendi will include
in such registration, first, the securities of the initiating Selling Partner,
and, thereafter, any securities to be sold
40
for the account of others who are participating in such registration (as
determined on a fair and equitable basis by Vivendi). In connection with any
Demand Registration or inclusion of a Selling Partner's or its Affiliate's
shares in a piggyback registration, Vivendi, such Selling Partner and/or its
Affiliates shall enter into an agreement containing terms (including
representations, covenants and indemnities by Vivendi and such Selling
Partner), and shall be subject to limitations, conditions, and blackout
periods, customary for a secondary offering by a selling stockholder. The
costs of the registration (other than underwriting discounts, fees and
commissions, except as provided herein) shall be paid by Vivendi. Vivendi
shall pay up to 1% of gross proceeds in the aggregate of any underwriting
discounts, fees and commissions related to the registration of shares on the
behalf of ▇▇▇▇▇▇.
(iii) If Vivendi and a Selling Partner cannot agree as to what
constitutes customary terms within 10 days of such Selling Partner's request
for registration (whether in a Demand Registration or a piggyback
registration), then such determination shall be made by a law firm of national
reputation mutually acceptable to Vivendi and such Selling Partner. In no
event shall the inability of the parties to come to agreement on customary
terms delay in any way the registration of a Selling Partner's Vivendi
Ordinary Shares hereunder.
SECTION 10.04. Tag-Along for Limited Partners for Transfers by
Universal. (a) If Universal Sub or any of its Affiliates shall desire to
Transfer in one transaction or a series of related transactions Common
Interests beneficially owned by the applicable transferor and its Affiliates,
other than to a wholly owned subsidiary of such transferor, Universal Sub
shall give not less than 10 Business Days' prior written notice to each of the
Limited Partners (each, a "Tag-Along Offeree") of such intended Transfer. Such
notice (the "Tag-Along Notice") shall set forth the terms and conditions of
such proposed Transfer, including the name of the proposed transferee, the
amount of Common Interests (and the aggregate Participation Percentage
represented thereby) proposed to be Transferred (including the number of
securities previously or proposed to be Transferred to the applicable
transferee or its Affiliates in a related transaction) (the "Tag-Along
Interests"), the purchase price per Common Interest on an equivalent basis
proposed to be paid therefor (or if part of a larger transaction, the fair
value allocable portion of the total purchase price) and the payment terms and
type of Transfer to be effectuated.
(b) Within 10 Business Days after delivery of the
41
Tag-Along Notice by Universal Sub to the Tag-Along Offerees, each Tag-Along
Offeree shall, by written notice to Universal Sub, have the opportunity and
right to sell to the transferee in such proposed Transfer (upon the same terms
and conditions as Universal Sub and/or its Affiliates, including the same
representations and warranties, covenants, indemnities, holdback and escrow
provisions, if any) up to that number of Common Interests beneficially owned
by such Tag-Along Offeree as shall represent a Participation Percentage equal
to the product of (x) a fraction, (A) the numerator of which is the aggregate
Participation Percentage represented by the Tag-Along Interests and (B) the
denominator of which is the aggregate Participation Percentage represented by
the Common Interests beneficially owned as of the date of the Tag-Along Notice
by Universal Sub and its Affiliates, multiplied by (y) the aggregate
Participation Percentage represented by the Common Interests beneficially
owned by such Tag-Along Offeree and its Affiliates as of the date of the
Tag-Along Notice. In the event that the proposed transferee is unwilling to
purchase all of the Common Interests that Universal Sub and the Limited
Partners propose to Transfer hereunder, the amount of Common Interests to be
Transferred by Universal Sub and/or its Affiliates and each of the Limited
Partners shall be reduced proportionately. The right of the Tag- Along
Offerees shall terminate with respect to that proposed Transfer if not
exercised within the period specified in the first sentence of this clause
(b).
(c) At the closing of any proposed Transfer in respect of which a
Tag-Along Notice has been delivered, each Tag-Along Offeree shall deliver to
the proposed transferee the Common Interests to be sold hereby duly endorsed,
or accompanied by written instruments of transfer in form satisfactory to the
proposed transferee, free and clear of all Liens (other than Permitted Liens),
and shall receive in exchange therefor the consideration to be paid by the
proposed transferee in respect of such Common Interests.
ARTICLE XI
Limitation on Liability,
Exculpation
SECTION 11.01. Limitation on Liability. Except as expressly provided
herein or in the other Transaction Documents, the debts, obligations and
liabilities of the Partnership, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Partnership, and no Covered Person shall be obligated
42
personally for any such debt, obligation or liability of the Partnership;
provided, however, that the foregoing shall not alter each Partner's
obligation under the Delaware Act to return funds wrongfully distributed to
it.
SECTION 11.02. Exculpation of Covered Persons. (a) Except as
expressly provided herein or in the Transaction Agreement, no Covered Person
shall be liable, including under any legal or equitable theory of fiduciary
duty or other theory of liability, to the Partnership or to any other Covered
Person for any losses, claims, damages or liabilities incurred by reason of
any act or omission performed or omitted by such Covered Person except for any
loss, claims, damages or liabilities arising from such Covered Person's fraud.
Whenever in this Agreement a Covered Person is permitted or required to make
decisions such Covered Person shall make such decisions in good faith having
regard to the best interests of the Partnership and shall not be subject to
any other or different standard (including any legal or equitable standard of
fiduciary or other duty) imposed by this Agreement or any relevant provisions
of law or in equity or otherwise.
(b) A Covered Person shall be fully protected in relying in good
faith upon the records of the Partnership and upon such information, opinions,
reports or statements presented to the Partnership, Board or management by any
Person as to matters the Covered Person reasonably believes are within such
Person's professional or expert competence.
SECTION 11.03. Partnership Opportunities. (a) If any of Universal
Sub, USAi, ▇▇▇▇▇▇ or any officer, director, agent, stockholder, member,
manager, partner or Affiliate of any of the foregoing acquires knowledge of a
potential transaction or matter which may be a Partnership Opportunity (as
defined below) or otherwise is then exploiting any Partnership Opportunity,
the Partnership shall have no interest in such Partnership Opportunity and no
expectancy that such Partnership Opportunity be offered to the Partnership,
any such interest or expectancy being hereby renounced, so that, as a result
of such renunciation, and for the avoidance of doubt, such Person (i) shall
have no duty to communicate or present such Partnership Opportunity to the
Partnership, (ii) subject to Section 9.04, shall have the right to hold any
such Partnership Opportunity for its (and/or its officers', directors',
agents', stockholders', members', managers', partners' or Affiliates') own
account or to recommend, sell, assign or transfer such Partnership Opportunity
to Persons other than the Partnership or any subsidiary of the Partnership and
(iii) subject to Section 9.04, shall not breach any
43
fiduciary or other duty to the Partnership, in such Person's capacity as a
Partner or otherwise, by reason of the fact that such Person pursues or
acquires such Partnership Opportunity for itself, directs, sells, assigns or
transfers such Partnership Opportunity to another Person, or does not
communicate information regarding such Partnership Opportunity to the
Partnership.
(b) Notwithstanding the provisions of this Section 11.03, the
Partnership does not renounce any interest or expectancy it may have in any
Partnership Opportunity that is offered to an officer of the Partnership and
who is also a director or officer of Universal Sub, USAi or the respective
Affiliates of Vivendi or USAi if such opportunity is expressly offered to such
person in his or her capacity as an officer of the Partnership.
(c) For purposes of this Section 11.03 only, the terms (i)
"Partnership" shall mean the Partnership and, except where the context
requires otherwise, shall also include all corporations, partnerships, joint
ventures, associations and other entities in which the Partnership
beneficially owns (directly or indirectly) 50% or more of the outstanding
voting stock, voting power, partnership or membership interests or similar
voting interests, and (ii) "Partnership Opportunity" shall mean an investment
or business opportunity or prospective economic advantage in which the
Partnership could, but for the provisions of this Section 11.03, have an
interest or expectancy.
(d) Except as otherwise expressly provided in Section 9.04, in
Section 4.13 of the Transaction Agreement or in any other agreement to which
the Partners may be a party, (i) the Partners and their officers, directors,
agents, stockholders, members, managers, partners and Affiliates may engage or
invest in, independently or with others, any business activity of any type or
description, including those that might be the same as or similar to the
Partnership's business or the business of any subsidiary of the Partnership,
(ii) none of the Partnership, any subsidiary of the Partnership or any Person
beneficially owning Common Interests shall have any right in or to such
business activities or ventures or to receive or share in any income or
proceeds derived therefrom and (iii) to the extent required by applicable law
in order to effectuate the purpose of this Section 11.03, the Partnership
shall have no interest or expectancy, and specifically renounces any interest
or expectancy, in any such business activities or ventures.
SECTION 11.04. Indemnification. (a) The
44
Partnership shall, to the fullest extent authorized under the Delaware Act as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Partnership to
provide broader indemnification rights than said law permitted the Partnership
to provide prior to such amendment), indemnify and hold harmless any Covered
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit, investigation or proceeding,
whether civil, criminal or administrative by reason of the fact that he or a
Covered Person of whom he is the legal representative is or was a
Representative or officer of the Partnership, or is or was a Representative or
officer of the Partnership serving at the request of the Partnership as a
Representative, officer or employee of another partnership, corporation, joint
venture, trust or other enterprise (whether the basis of such proceeding is
alleged action in an official capacity as a Representative or officer or in
any other capacity while serving as a Representative or officer) against all
expenses, liability and loss (including attorneys' fees, judgments, fines or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by him in connection therewith, except in a case where such expenses,
liabilities or losses resulted from the fraud of such indemnified Person. The
right to indemnification conferred in this Agreement shall be a contract right
and shall include the right to be paid by the Partnership the expenses
incurred in defending any such proceeding in advance of its final disposition,
such advances to be paid by the Partnership within 20 days after the receipt
by the Partnership of a statement or statements from the claimant requesting
such advance or advances from time to time.
(b) At all times from and after the Effective Time, the Partnership
shall either maintain directors' and officers' liability insurance covering
the officers and Representatives entitled to indemnification under this
Section 11.04 or ensure that such officers and Representatives are covered in
policies maintained by Vivendi, Universal Sub or their Affiliates, in each
case providing coverage for reasonable amounts and on customary terms.
ARTICLE XII
Events of Withdrawal; Bankruptcy of a General Partner
SECTION 12.01. Events of Withdrawal. Except as otherwise provided in
this Agreement, no Partner shall
45
withdraw from the Partnership.
SECTION 12.02. Bankruptcy of a General Partner. (a) In the event of
the Bankruptcy of the General Partner (the "Bankrupt Partner"), then the
Partnership shall be dissolved unless it is continued without dissolution in
accordance with Section 13.01(c)(iii).
(b) In the event a new General Partner is appointed, the Bankrupt
Partner shall become a Limited Partner and shall have (x) no right to
participate in the management of the Partnership or the business and affairs
of the Partnership, and (y) the same interest in all items of income, gain,
loss, deduction or credit of the Partnership to the same extent as if such
Bankruptcy had not occurred. Upon the occurrence of the Bankruptcy of any
General Partner, (i) the Bankrupt Partner and the other Partners shall execute
such documents as may be necessary or appropriate to carry out the provisions
of this Article XII, and (ii) the other Partners are, without necessity of any
further action or documentation, hereby appointed attorneys- in-fact of the
Bankrupt Partner for the purpose of carrying out the provisions of this
Article XII and taking any action and executing any documents which such
Partners may deem necessary or advisable to accomplish the purposes hereof,
such appointment being irrevocable and coupled with an interest.
(c) In the event that the General Partner shall become a "debtor" as
defined in the Bankruptcy Code in any case commenced thereunder and at any
time during the pendency of such case there shall be appointed (i) a trustee
with respect to the Bankrupt Partner under Section 701, 702 or 1104 of the
Bankruptcy Code (or any successor provisions thereto), or (ii) an examiner
having expanded powers beyond those specifically enumerated in Section 1104(b)
of the Bankruptcy Code, then the other Partners may, at any time thereafter,
so long as such condition exists, unanimously elect to dissolve the
Partnership, in which event the affairs of the Partnership shall be wound up
as provided in Article XIII.
ARTICLE XIII
Dissolution and Termination
SECTION 13.01. Dissolution. (a) The Partnership shall not be
dissolved by the admission of Additional Partners or Substitute Partners
pursuant to Section 3.03.
46
(b) Subject to Section 12.01, no Partner shall withdraw from the
Partnership and, to the fullest extent permitted by applicable law, no Partner
shall take any action to dissolve, terminate or liquidate the Partnership or
to require apportionment, appraisal or partition of the Partnership or any of
its assets, or to file a ▇▇▇▇ for an accounting, except as specifically
provided in this Agreement, and each Partner, to the fullest extent permitted
by applicable law, hereby waives any rights to take any such actions (or have
such actions taken on its behalf) under applicable law, including any right to
petition a court for judicial dissolution under Section 17-802 of the Delaware
Act.
(c) The Partnership shall be dissolved and its business wound up
upon the earliest to occur of any one of the following events:
(i) at the time there are no Limited Partners unless the Partnership
is continued without dissolution in accordance with the Delaware Act;
(ii) the written agreement of all the Partners;
(iii) the occurrence of any event that causes the General Partner to
cease to be a general partner of the Partnership, unless (i) there is a
remaining General Partner who is hereby authorized to and shall continue
the business of the Partnership without dissolution or (ii) the other
Partners agree in writing, within 90 days after such event occurs, to
continue the business of the Partnership without dissolution and to
appoint, effective as of the date of such event, a new General Partner;
(iv) a decision to dissolve the Partnership in accordance with
Section 12.02(c); and
(v) the entry of a decree of judicial dissolution under Section
17-802 of the Delaware Act, in contravention of this Agreement.
(d) Except as provided herein, the resignation, Bankruptcy,
insolvency or dissolution of a Partner or the occurrence of any other event
that terminates the continued membership of a Partner of the Partnership shall
not in and of itself cause a dissolution of the Partnership.
SECTION 13.02. Winding Up of the Partnership. (a) Upon dissolution,
the Partnership's business shall be liquidated in an orderly manner. The
General Partner shall
47
be the liquidator to wind up the affairs of the Partnership pursuant to this
Agreement. If there shall be no General Partner, the remaining Partners may
approve one or more liquidators to act as the liquidator in carrying out such
liquidation. In performing its duties, the liquidator is authorized to sell,
distribute, exchange or otherwise dispose of the assets of the Partnership in
accordance with the Delaware Act and in any reasonable manner that the
liquidator shall determine to be in the best interest of the Partners.
(b) The proceeds of the liquidation of the Partnership shall be
distributed in the following order and priority:
(i) first, to the creditors (including any Partners or their
respective Affiliates that are creditors) of the Partnership in
satisfaction of all of the Partnership's liabilities (whether by payment
or by making reasonable provision for payment thereof, including the
setting up of any reserves which are, in the judgment of the liquidator,
reasonably necessary therefor);
(ii) second, to the Partners holding Preferred Interests pro rata up
to the amount of the Face Value of such Preferred Interests;
(iii) third, to the Partners holding Common Interests pro rata based
on the amount of Capital Contributions attributable thereto, up to the
amount of such Capital Contributions; and
(iv) fourth, to the Partners holding Common Interests pro rata in
accordance with their respective Participation Percentages;
provided, however, that in the event that distributions pursuant to clauses
(ii) through (iv) above would not otherwise be identical to distribution in
accordance with the positive balances in the Partners' Capital Accounts, such
distributions shall instead be made in accordance with such positive balances.
SECTION 13.03. Distribution of Property. In the event it becomes
necessary in connection with the liquidation of the Partnership to make a
distribution of property in kind, subject to the priority set forth in Section
13.02, the liquidator shall have the right to compel each Partner to accept a
distribution of any asset in kind, so long as the portion of such asset to be
distributed is
48
determined based upon the amount of cash that would be distributed to such
Partners if such property were sold for an amount of cash equal to the fair
market value of such property, as determined by the liquidator in good faith.
SECTION 13.04. Claims of Partners. The Partners shall look solely to
the Partnership's assets for the return of their Capital Contributions, and if
the assets of the Partnership remaining after payment of or reasonable
provision for the payment of all liabilities of the Partnership are
insufficient to return such Capital Contributions, the Partners shall have no
recourse against the Partnership or any Partner.
SECTION 13.05. Termination. The Partnership shall terminate when all
of the assets of the Partnership, after payment of or reasonable provision for
the payment of all debts and liabilities of the Partnership, shall have been
distributed to the Partners in the manner provided for in this Article XIII
and when permitted by this Agreement, and the certificate of limited
partnership of the Partnership shall have been canceled in the manner required
by the Delaware Act.
ARTICLE XIV
Miscellaneous
SECTION 14.01. Notices. Except as otherwise expressly provided in
this Agreement, all notices, requests and other communications to any party
hereunder shall be in writing (including a facsimile or similar writing) and
shall be given to such party at the address or facsimile number set forth for
such party in Schedule A hereto or as such party shall hereafter specify for
the purpose by notice to the other parties. Each such notice, request or other
communication shall be effective (i) if given by facsimile, at the time such
facsimile is transmitted and the appropriate confirmation is received (or, if
such time is not during a Business Day, at the beginning of the next such
Business Day), (ii) if given by mail, five Business Days (or, (x) if by
overnight courier, one Business Day, or (y) if to an address outside the
United States, seven Business Days) after such communication is deposited in
the mails with first-class postage prepaid, addressed as aforesaid, or (iii)
if given by any other means, when delivered at the address specified pursuant
to this Section 14.01.
SECTION 14.02. No Third Party Beneficiaries.
49
Except as provided in Sections 10.02(b), 10.03 and 11.04, this Agreement is
not intended to confer any rights or remedies hereunder upon, and shall not be
enforceable by, any Person other than the parties hereto.
SECTION 14.03. Waiver. No failure by any party to insist upon the
strict performance of any covenant, agreement, term or condition of this
Agreement or to exercise any right or remedy consequent upon a breach of such
or any other covenant, agreement, term or condition shall operate as a waiver
of such or any other covenant, agreement, term or condition of this Agreement.
Any Partner by notice given in accordance with Section 14.01 may, but shall
not be under any obligation to, waive any of its rights or conditions to its
obligations hereunder, or any duty, obligation or covenant of any other
Partner. No waiver shall affect or alter the remainder of this Agreement but
each and every covenant, agreement, term and condition hereof shall continue
in full force and effect with respect to any other then existing or subsequent
breach. The rights and remedies provided by this Agreement are cumulative and
the exercise of any one right or remedy by any party shall not preclude or
waive its right to exercise any or all other rights or remedies.
SECTION 14.04. Integration. This Agreement and the Transaction
Documents constitute the entire agreement among the parties hereto pertaining
to the subject matter hereof and supersede all prior agreements and
understandings of the parties in connection herewith, and no covenant,
representation or condition not expressed in this Agreement or in any
Transaction Document shall affect, or be effective to interpret, change or
restrict, the express provisions of this Agreement.
SECTION 14.05. Headings. The titles of Articles and Sections of this
Agreement are for convenience only and shall not be interpreted to limit or
amplify the provisions of this Agreement.
SECTION 14.06. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and all of
which, taken together, shall constitute one and the same instrument.
SECTION 14.07. Severability. Each provision of this Agreement shall
be considered separable and if for any reason any provision or provisions
hereof are determined to be invalid and contrary to any existing or future
law, such invalidity shall not impair the operation of or affect those
portions of this Agreement which are valid.
50
SECTION 14.08. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
giving effect to the conflicts of law principles thereof.
SECTION 14.09. Jurisdiction. Each of the Partners (i) consents to
and submits itself and its property to the personal jurisdiction of any
Federal or state court located in the State of Delaware in the event of any
dispute arising out of or relating to this Agreement, (ii) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that it will not bring any
action relating to this Agreement in any court other than a Federal or state
court sitting in the State of Delaware and (iv) hereby waives any rights such
Partner may have to personal service of summons, complaint or other process in
connection therewith, and agrees that service may be made by registered or
certified mail addressed to such Partner and sent in accordance with the
provisions of Article XIV hereof.
51
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the day and year first above written.
[UNIVERSAL SUB],
By
------------------------------
Name:
Title:
USA NETWORKS, INC.,
By
------------------------------
Name:
Title:
USANi SUB LLC,
By
------------------------------
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇▇,
------------------------------