Formation Agreement - DreamWorks Animation SKG Inc. and DreamWorks LLC
FORMATION AGREEMENT
Among
DREAMWORKS ANIMATION SKG, INC.,
DREAMWORKS L.L.C.,
[HOLDCO] LLLP
and
THE STOCKHOLDERS AND OTHER PERSONS PARTY HERETO
Dated As Of October [ ], 2004
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
Section 1.01. Certain Defined Terms ............................................ 1
Section 1.02. Other Definitional Provisions .................................... 6
ARTICLE II
Distribution and Contribution; Holdco Transactions
Section 2.01. Contributions and Redemptions of Preferred Interests; Distribution
of DWA LLC Interests; Execution of Amended LLC Agreement ...... 6
Section 2.02. Contribution of the DWA LLC Interests to the Company; Issuance of
Common Stock by the Company ................................... 7
Section 2.03. Residual DW Distribution ......................................... 7
Section 2.04. Formation of Holdco; Contribution of Common Stock to Holdco ...... 7
Section 2.05. IPO .............................................................. 8
ARTICLE III
Follow-on Offering
Section 3.01. Initial Follow-on Offering ....................................... 8
Section 3.02. Pricing Period ................................................... 9
Section 3.03. Subsequent Follow-on Offering .................................... 9
Section 3.04. Registration Rights .............................................. 10
Section 3.05. Size of Follow-on Offering ....................................... 11
Section 3.06. Anti-Manipulation ................................................ 11
ARTICLE IV
Universal Triggered Offering
Section 4.01. Universal Triggered Offering ..................................... 12
ARTICLE V
Additional Agreements; Further Assurances
Section 5.01. Certain Holdco Expenses .......................................... 13
Section 5.02. Further Assurances ............................................... 14
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ARTICLE VI
Representations and Warranties; Indemnification
Section 6.01. Representations and Warranties of Each Party ..................... 14
Section 6.02. Tax Representation ............................................... 16
Section 6.03. Representation and Warranty of the Company ....................... 16
Section 6.04. Survival ......................................................... 16
Section 6.05. Indemnification .................................................. 16
ARTICLE VII
General Provisions
Section 7.01. Notices .......................................................... 18
Section 7.02. Counterparts ..................................................... 19
Section 7.03. Entire Agreement; No Third Party Beneficiaries ................... 19
Section 7.04. Governing Law .................................................... 19
Section 7.05. Severability ..................................................... 19
Section 7.06. Assignment; Amendments ........................................... 19
Section 7.07. Enforcement ...................................................... 20
Section 7.08. Titles and Subtitles ............................................. 20
Section 7.09. Submission to Jurisdiction; Waivers .............................. 20
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FORMATION AGREEMENT, dated as of October [ ], 2004,
among DREAMWORKS ANIMATION SKG, INC., a Delaware corporation
(the "Company"), DREAMWORKS L.L.C., a Delaware limited
liability company ("DW"), [HOLDCO] LLLP, a Delaware limited
liability limited partnership ("Holdco"), and the stockholders
and other persons party hereto.
WHEREAS, DW, the Company and DreamWorks Animation L.L.C., a Delaware
limited liability company ("DWA LLC"), have entered into a Separation Agreement
dated as of the date hereof, providing for the separation of the animation
business from DW;
WHEREAS, on the Separation Date (as defined below) immediately prior
to effectiveness of the Underwriting Agreement (as defined below), DW made a
distribution-in-kind to its members (in accordance with Article VIII of the
Sixth Amended and Restated Limited Liability Company Agreement of DW) of its
interest in DWA LLC;
WHEREAS, the distributed DWA LLC interests will be contributed to
the Company in exchange for Common Stock (as defined below);
WHEREAS, each Contributing Member (as defined below) desires to form
Holdco and to contribute any shares of such Common Stock received from the
Company, other than the IPO Sale Shares (as defined below) and other than as set
forth in Section 2.04, to Holdco in exchange for partnership interests in
Holdco;
WHEREAS, the Contributing Members desire to provide for the sale, in
a follow-on secondary offering, of all or a portion of the shares of Common
Stock held directly by the Contributing Members and the shares of Common Stock
contributed to Holdco by the Contributing Members; and
WHEREAS, the Company, Holdco and certain other parties hereto have
entered into a Registration Rights Agreement, dated as of the date hereof (the
"Registration Rights Agreement"), that, among other things, provides for certain
procedures with respect to the Follow-on Offering and the Universal Triggered
Offering (each as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Certain Defined Terms. As used in this Agreement:
"Agreement" means this Formation Agreement, as it may be amended,
supplemented, restated or modified from time to time.
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"Amended LLC Agreement" means the Seventh Amended and Restated
Limited Liability Company Agreement of DW, dated as of October [ ], 2004, as it
may be amended, supplemented, restated or modified from time to time.
"Asserted Liability" has the meaning assigned to such term in
Section 6.05(d).
"Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in The
City of New York.
"Charter" means the Restated Certificate of Incorporation of the
Company, as amended or restated from time to time.
"Claims" has the meaning assigned to such term in Section 6.05(a).
"Claims Notice" has the meaning assigned to such term in Section
6.05(d).
"Class A Stock" means the Company's Class A Common Stock, par value
$0.01 per share.
"Class B Stock" means the Company's Class B Common Stock, par value
$0.01 per share.
"Class C Stock" means the Company's Class C Common Stock, par value
$0.01 per share.
"Class B Stockholder Agreement" means the Stockholder Agreement,
dated as of October [ ], 2004, among Holdco, M&J K, M&J K B, The JK Annuity
Trust, The MK Annuity Trust, Katzenberg 1994 Irrevocable Trust, DG-DW, Jeffrey
Katzenberg and David Geffen, as in effect on the date hereof.
"Class T/T Interests" means Class T/T limited liability company
interests in DW.
"Class U Interests" means Class U limited liability company
interests in DW.
"Common Stock" means the Class A Stock, Class B Stock and Class C
Stock.
"Company" has the meaning assigned to such term in the preamble
hereto.
"Contribution" has the meaning assigned to such term in Section
2.02.
"Contributing Members" means M&J K, M&J K B, DG-DW, DW Lips, DWI II,
Lee Entertainment, L.L.C. and Universal.
"Control" (including the terms "Controlled By" and "Under Common
Control With") has the meaning assigned to such term in the Charter as in effect
at consummation of the IPO.
"DG-DW" means DG-DW, L.P., a Delaware limited partnership.
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"DW" has the meaning assigned to such term in the preamble hereto.
"DW Distribution" has the meaning assigned to such term in the
Separation Agreement.
"DWA LLC" has the meaning assigned to such term in the recitals
hereto.
"DWA LLC Interest" means a limited liability company interest in DWA
LLC.
"DWI" means DW Investment Inc., a Washington corporation.
"DWI II" means DW Investment II, Inc., a Washington corporation.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"Final Allocation" has the meaning assigned to such term in the
Holdco Partnership Agreement as in effect on the Separation Date.
"Follow-on Offering" means either the Initial Follow-on Offering or
the Subsequent Follow-on Offering, as applicable.
"Group" has the meaning assigned to such term in Section 13(d)(3) of
the Exchange Act.
"Holdco" has the meaning assigned to such term in the preamble
hereto.
"Holdco Contribution" has the meaning assigned to such term in
Section 2.04.
"Holdco Obligations" has the meaning assigned to such term in
Section 5.01(b).
"Holdco Partnership Agreement" means the Limited Liability Limited
Partnership Agreement of Holdco, dated as of October [ ], 2004, among the
Contributing Members, as in effect on the Separation Date.
"Indemnitee" has the meaning assigned to such term in Section
6.05(d).
"Indemnitor" has the meaning assigned to such term in Section
6.05(d).
"Initial Follow-on Offering" has the meaning assigned to such term
in Section 3.01(a).
"Initial Period" has the meaning assigned to such term in Section
3.01(a).
"IPO" means the initial public offering by the Company and the
selling stockholders identified in the IPO Registration Statement of shares of
Class A Stock pursuant to the IPO Registration Statement.
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"IPO Price" means the gross public offering price per share
(calculated before deduction of any underwriting discounts or commissions) in
the IPO.
"IPO Registration Statement" means the registration statement on
Form S-1 (File No. 333-117528) filed under the Securities Act, pursuant to which
the Class A Stock to be issued in the IPO will be registered, together with all
amendments thereto.
"IPO Sale Shares" means, with respect to any Contributing Member,
the number of shares of Class A Stock to be sold in the IPO for the account of
such Contributing Member pursuant to the IPO Registration Statement.
"JK/DG Trigger Notice" has the meaning assigned to such term in
Section 3.01(a).
"JK/DG Triggered Follow-on Offering" means an Initial Follow-on
Offering initiated by M&J K B and DG-DW, acting together, pursuant to Section
3.01(a) or converted to such pursuant to Section 3.01(b).
"Liens" has the meaning assigned to such term in Section 6.01.
"Losses" has the meaning assigned to such term in Section 6.05(a).
"M&J K" means M&J K Dream Limited Partnership, a Delaware limited
partnership.
"M&J K B" means M&J K B Limited Partnership, a Delaware limited
partnership.
"Member" means each member of DW listed on Schedule 2.02.
"Minimum Registrable Amount" has the meaning assigned to such term
in Section 3.05.
"Parent" means each of Steven Spielberg, Jeffrey Katzenberg, David
Geffen, Paul Allen, NBC Universal, Inc. and CJ Corp.
"Participating Partner" has the meaning assigned to such term in the
Holdco Partnership Agreement.
"Person" has the meaning assigned to such term in the Charter (as
modified in Section 2(f) of Article IV thereof) as in effect at consummation of
the IPO.
"Preferred Contributions" has the meaning assigned to such term in
Section 2.01(a).
"Preferred Redemptions" has the meaning assigned to such term in
Section 2.01(a).
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"Pricing Period" means the 20 consecutive trading days on The New
York Stock Exchange beginning on the date specified in the Pricing Period
Notice.
"Pricing Period Notice" has the meaning assigned to such term in
Section 3.02(a).
"Pricing Period Price" has the meaning assigned to such term in
Section 3.02(b).
"Proceeding" has the meaning assigned to such term in Section 7.09.
"Registration Rights Agreement" has the meaning assigned to such
term in the recitals hereto.
"Residual DW Distribution" has the meaning assigned to such term in
Section 2.03(a).
"Revolving Credit Facility" means the revolving credit facility,
dated as of October [ ], 2004, among DW and the lenders party thereto (or any
refinancing thereof that does not extend the term thereof).
"Satisfaction Event" has the meaning assigned to such term in the
Holdco Partnership Agreement. For the avoidance of doubt, all references in this
Agreement to a Satisfaction Event resulting from a Follow-on Offering or a
Universal Triggered Offering shall require that the Satisfaction Event result
from such offering without requiring the exercise of any overallotment option in
such offering.
"Securities Act" means the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Separation Agreement" means the Separation Agreement, dated as of
October [ ], 2004, among DW, DWA LLC and the Company, as in effect on the
Separation Date.
"Separation Date" has the meaning assigned to such term in the
Separation Agreement.
"Subsequent Follow-on Offering" has the meaning assigned to such
term in Section 3.03(a).
"Subsequent Period" has the meaning assigned to such term in Section
3.03(a).
"Subsequent Vulcan Trigger Notice" has the meaning assigned to such
term in Section 3.03(a).
"Thomson" means Thomson Inc.
"Underwriting Agreement" has the meaning assigned to such term in
the Separation Agreement.
"Universal" means Vivendi Universal Entertainment LLLP.
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"Universal Period" has the meaning assigned to such term in Section
4.01(a).
"Universal Trigger Notice" has the meaning assigned to such term in
Section 4.01(a).
"Universal Triggered Offering" has the meaning assigned to such term
in Section 4.01(a).
"Volume Weighted Average Price" over any period means, with respect
to the Class A Stock, the volume weighted average price per share for the entire
applicable period on the principal national securities market or exchange on
which the Class A Stock is listed or quoted.
"Vulcan Stockholder Agreement" means the Stockholder Agreement,
dated as of October [ ], 2004, among the Company, Holdco, M&J K, M&J K B, The JK
Annuity Trust, The MK Annuity Trust, Katzenberg 1994 Irrevocable Trust, DG-DW,
DWI II, Jeffrey Katzenberg, David Geffen and Paul Allen, as it may be amended,
supplemented, restated or modified from time to time.
"Vulcan Trigger Notice" has the meaning assigned to such term in
Section 3.01(a).
"Vulcan Triggered Follow-on Offering" means an Initial Follow-on
Offering initiated by DWI II pursuant to Section 3.01(a) unless converted into a
JK/DG Triggered Follow-on Offering pursuant to Section 3.01(b).
Section 1.02. Other Definitional Provisions. (a) 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, and Article and Section references are to this Agreement unless
otherwise specified. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation".
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II
Distribution and Contribution; Holdco Transactions
Section 2.01. Contributions and Redemptions of Preferred Interests;
Distribution of DWA LLC Interests; Execution of Amended LLC Agreement. (a) On
the Separation Date, after consummation of the transactions contemplated in
Section 2.01 of the Separation Agreement, (x) Thomson shall contribute 33-1/3%
of the Class T/T Interests to the Company in exchange for the number of shares
of Common Stock set forth on Schedule 2.02 and (y) Universal shall contribute
50% of the Class U Interests to the Company in exchange for the number of shares
of Common Stock set forth on Schedule 2.02 (the "Preferred Contributions"). For
the avoidance of doubt, the number of shares of Common Stock received in
exchange for the Preferred Contributions shall be equal to (i) in the case of
Universal, $75 million divided by the
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IPO Price and (b) in the case of Thomson, $50 million divided by the IPO Price.
Immediately after consummation of the Preferred Contributions, DW shall redeem
such Class T/T Interests and such Class U Interests from the Company in exchange
for (i) all of DW's 100% interest in the capital stock of DreamWorks Inc. and
(ii) the number of DWA LLC Interests set forth in Schedule 2.01(a) (the
"Preferred Redemptions"). DW acknowledges that it will treat the Preferred
Redemptions as a liquidating distribution with respect to the Class T/T
Interests and Class U Interests so redeemed and shall report the Preferred
Redemptions as such under Section 732(b) of the Internal Revenue Code.
(b) On the Separation Date, immediately after consummation of the DW
Distribution, each Member (other than Universal and Thomson) shall execute and
deliver a pledge agreement in favor of the lenders under the Revolving Credit
Facility, which pledge agreements shall provide for the pledge of Common Stock
having an aggregate value of $300 million (valued at the IPO Price), allocated
among such Members in an amount equal to their participation percentages in DW
(as of the date hereof) as set forth on Schedule 2.01(b) multiplied by $300
million (which amount shall be subject to adjustment in the case of Contributing
Members based upon the Final Allocation of such pledged shares of Common Stock).
Section 2.02. Contribution of the DWA LLC Interests to the Company;
Issuance of Common Stock by the Company. On the Separation Date, after
consummation of the DW Distribution and following effectiveness of the
Underwriting Agreement, each Member (or DWI II, in the case of DW Investment
Inc.) shall contribute all its right, title and interest in and to the DWA LLC
Interests to the Company in exchange for the number of shares of Class A Stock,
Class B Stock or Class C Stock, as applicable, set forth on Schedule 2.02 (the
"Contribution"). The Company hereby acknowledges that it intends to continue the
existence of DWA LLC as a partnership for Federal income tax purposes.
Section 2.03. Residual DW Distribution. (a) On the Separation Date,
immediately after consummation of the PDI Merger (as defined in the Separation
Agreement), DW shall distribute (in accordance with Article VIII of the Sixth
Amended and Restated Limited Liability Company Agreement of DW) all its right,
title and interest in and to all shares of Class A Stock then held by DW (after
giving effect to the LLC Employee Distribution (as defined in the Separation
Agreement)) to the Members listed on Schedule 2.03(a) hereto, in the amounts set
forth on Schedule 2.03(a) (the "Residual DW Distribution").
(b) On the Separation Date, immediately after consummation of the
Residual DW Distribution, the Members shall execute and deliver the Amended LLC
Agreement.
Section 2.04. Formation of Holdco; Contribution of Common Stock to
Holdco. (a) Immediately prior to the Holdco Contribution (as defined below),
each Contributing Member shall execute and deliver the Holdco Partnership
Agreement, and the Contributing Members shall form Holdco.
(b) On the Separation Date, immediately after the formation of
Holdco, (i) Holdco shall execute and deliver a pledge agreement in favor of the
lenders under the Revolving Credit Facility, which pledge agreement shall be in
substitution for the pledge of the shares of
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Common Stock pledged by each Contributing Member (other than Universal) pursuant
to Section 2.01(b) until the Final Allocation and (ii) each Contributing Member
shall contribute all its right, title and interest in and to the Common Stock
received by such Contributing Member in any of the Contribution, the Preferred
Contributions or the Residual DW Distribution, as applicable (other than (w)
such Contributing Member's IPO Sale Shares, (x) in the case of each Contributing
Member other than Universal, the respective number of shares of Class A Stock or
Class B Stock set forth on Schedule 2.04(b)(x) and (y) in the case of DWI II,
the one share of Class C Stock) to Holdco, and in exchange therefor shall
receive the interests in Holdco set forth in Section 5.01 of the Holdco
Partnership Agreement (the "Holdco Contribution").
(c) Each Contributing Member shall, to the extent it has not already
done so, appoint an agent for service of process in the State of Delaware.
(d) Each Continuing Partner (as defined in the Holdco Partnership
Agreement) agrees (for itself and its permitted transferees) that (i) it shall
remain a partner in Holdco for at least six months after the Vulcan GP Date (as
defined in the Holdco Partnership Agreement), (ii) such Continuing Partner shall
not amend or modify the Holdco Partnership Agreement or take or cause to be
taken any action in each case which would effect the dissolution of Holdco prior
to the end of such six month period (it being understood that distributions to
such Continuing Partners of shares of Common Stock not constituting Continuing
Partner Minimum Ownership Shares (as defined in the Holdco Partnership
Agreement) shall not constitute such actions) and (iii) such Continuing Partner
shall not amend or modify the definition of "Final Allocation" in the Holdco
Partnership Agreement.
(e) Holdco agrees to convert shares of Class B Stock held by it into
shares of Class A Stock at the time required by the terms of the Holdco
Partnership Agreement.
Section 2.05. IPO. The Members shall be entitled to participate in
the secondary sale of shares of Class A Stock in the IPO (and the overallotment
option relating to the IPO, if exercised) pro rata in proportion to Unreturned
Capital Contributions (as defined in the Sixth Amended and Restated Limited
Liability Company Agreement of DW) of such participating Members, or deemed
Unreturned Capital Contributions, as applicable, of such participating Members
immediately prior to consummation of the DW Distribution as set forth on
Schedule 2.05.
ARTICLE III
Follow-on Offering
Section 3.01. Initial Follow-on Offering. (a) At any time during the
period beginning on the date that is six months after consummation of the IPO
and prior to May 31, 2006 (the "Initial Period"), either of (i) M&J K B and
DG-DW, acting together, or (ii) DWI II, shall have the right to cause Holdco to
effect one Follow-on Offering (the "Initial Follow-on Offering"), in either case
by causing Holdco to exercise Holdco's demand registration rights pursuant to
Section 1.02 of the Registration Rights Agreement by delivering written notice
(the "JK/DG Trigger Notice" or the "Vulcan Trigger Notice", as applicable)
thereof (which notice shall also specify the number of shares of Class A Stock
proposed to be sold in such Initial
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Follow-on Offering (assuming the maximum number of Participating Partners),
which number shall comply with the terms of Section 3.05) to Holdco during the
Initial Period (with a copy of such notice concurrently delivered to each other
Contributing Member). Upon receipt by Holdco of either a JK/DG Trigger Notice or
a Vulcan Trigger Notice, the general partners of Holdco in their capacity as
such shall, within three Business Days of the date of such receipt, deliver a
Demand Request (as defined in the Registration Rights Agreement) to the Company
(with a copy of such notice concurrently delivered to each Contributing Member
notifying each Contributing Member of its right to participate in such offering)
requesting that the Company register such shares of Class A Stock as soon as
practicable pursuant to Section 1.02 of the Registration Rights Agreement.
(b) In the event that the Initial Follow-on Offering is a Vulcan
Triggered Follow-on Offering, M&J K B and DG-DW shall have the right at any time
at or prior to the pricing of such Initial Follow-on Offering to convert such
Initial Follow-on Offering from a Vulcan Triggered Follow-on Offering to a JK/DG
Triggered Follow-on Offering by delivering written notice of such conversion to
Holdco and DWI II at or prior to such pricing. Upon receipt by Holdco of such
notice, such Initial Follow-on Offering shall be treated solely as a JK/DG
Triggered Follow-on Offering for purposes of Article VII of the Holdco
Partnership Agreement.
Section 3.02. Pricing Period. (a) If a Vulcan Triggered Follow-on
Offering is consummated, M&J K B and DG-DW, acting together, shall, on the date
selected by them during the period beginning on the date of consummation of the
Vulcan Triggered Follow-on Offering (excluding any exercise of an overallotment
option granted to the underwriters of such offering, if any) and ending on May
31, 2006, deliver an irrevocable written notice (the "Pricing Period Notice") to
the other Contributing Members specifying the date of commencement of the
Pricing Period. The Pricing Period shall in no event end later than May 31, 2006
unless there are fewer than 20 trading days between the date of such
consummation of such Vulcan Triggered Follow-on Offering (or any overallotment
option exercise in respect of such offering, if later) and May 31, 2006, in
which case the Pricing Period shall end on the twentieth trading day after the
date of such consummation of such offering or overallotment option, as the case
may be. The Pricing Period Notice shall be delivered pursuant to this Section
3.02(a) at least three trading days prior to the first day of the Pricing
Period. Notwithstanding anything herein to the contrary, in no event shall the
Pricing Period end earlier than the date of consummation of the overallotment
option, if any, relating to such Vulcan Triggered Follow-on Offering.
(b) The "Pricing Period Price" shall be the Volume Weighted Average
Price of the Class A Stock over the Pricing Period.
Section 3.03. Subsequent Follow-on Offering. (a) If an Initial
Follow-on Offering shall not have been consummated on or prior to May 31, 2006,
then at any time during the period from and including June 1, 2006 to December
1, 2007 (June 1, 2008, in the event that a Universal Triggered Offering shall
have been consummated) (the "Subsequent Period"), DWI II shall have the sole
right to cause Holdco to effect a Follow-on Offering (the "Subsequent Follow-on
Offering") by causing Holdco to exercise Holdco's demand registration rights
pursuant to Section 1.02 of the Registration Rights Agreement by delivering
written notice (the "Subsequent Vulcan Trigger Notice") thereof (which notice
shall also specify the number of shares of Class A Stock proposed to be sold in
the Subsequent Follow-on Offering (assuming the
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maximum number of Participating Partners), which number shall comply with the
terms of Section 3.05) to Holdco during the Subsequent Period (with a copy of
such notice concurrently delivered to each other Contributing Member). Upon
receipt by Holdco of the Subsequent Vulcan Trigger Notice, the general partners
of Holdco in their capacity as such shall, within three Business Days of the
date of such receipt, deliver a Demand Request to the Company (with a copy of
such notice concurrently delivered to each Contributing Member notifying each
Contributing Member of its right to participate in such offering) requesting
that the Company register such shares of Class A Stock as soon as practicable
pursuant to Section 1.02 of the Registration Rights Agreement.
(b) If an Initial Follow-on Offering shall not have been consummated
on or prior to May 31, 2006 and DWI II shall not have delivered the Subsequent
Vulcan Trigger Notice prior to December 1, 2007 (June 1, 2008, in the event that
a Universal Triggered Offering shall have been consummated) then, on or after
December 1, 2007, the general partners of Holdco, in such capacity, shall have
the right, no later than December 31, 2007 (June 30, 2008, in the event that a
Universal Triggered Offering shall have been consummated) to cause Holdco to
initiate the Subsequent Follow-on Offering by delivering a Demand Request to the
Company (with a copy of such notice concurrently delivered to each Contributing
Member notifying each Contributing Member of the number of shares of Class A
Stock proposed to be sold in such offering, which number shall comply with the
terms of Section 3.05, and notifying each Contributing Member of its right to
participate in such offering) requesting that the Company register such shares
of Class A Stock as soon as practicable pursuant to Section 1.02 of the
Registration Rights Agreement.
(c) Notwithstanding anything to the contrary in this Agreement,
neither DWI II nor the general partners of Holdco shall deliver a notice
triggering a Subsequent Follow-on Offering pursuant to this Section 3.03 if a
Universal Trigger Notice shall have been delivered pursuant to Section 4.01(a)
(and shall not have been revoked or converted pursuant to Section 4.01(b)) and
such Universal Triggered Offering shall not have been consummated; provided,
that if any such notice shall remain outstanding as provided in the last
sentence of Section 4.01(a) or Section 4.01(b), it shall continue to be subject
to conversion pursuant to Section 4.01(b).
Section 3.04. Registration Rights. (a) Holdco shall not exercise its
demand or piggyback registration rights pursuant to the Registration Rights
Agreement for any purpose other than (i) effecting the Follow-on Offering that
will result in a Satisfaction Event with respect to each Participating Partner
or (ii) effecting a Universal Triggered Offering that will result in a
Satisfaction Event with respect to Universal.
(b) If a Follow-on Offering is a JK/DG Triggered Follow-on Offering,
then M&J K B and DG-DW, acting together, shall have the sole right to cause
Holdco to exercise its right to revoke or delay its requested registration
pursuant to the Registration Rights Agreement.
(c) If the Follow-on Offering is either a Vulcan Triggered Follow-on
Offering or the Subsequent Follow-on Offering triggered by DWI II, then DWI II
shall have the sole right to cause Holdco to exercise its right to revoke or
delay its requested registration pursuant to the Registration Rights Agreement.
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(d) If a Follow-on Offering is the Subsequent Follow-on Offering
triggered as set forth in Section 3.03(b) or a Subsequent Follow-on Offering
that has not been consummated on or prior to December 1, 2007 (June 1, 2008, in
the event that a Universal Triggered Offering shall have been consummated), then
DWI II, M&J K B and DG-DW, acting together, shall have the sole right to cause
Holdco to exercise its right to revoke or delay its requested registration
pursuant to the Registration Rights Agreement.
(e) With respect to a Universal Triggered Offering, Universal shall
have the right to cause Holdco to exercise its right to revoke or delay its
requested registration pursuant to the Registration Rights Agreement.
Section 3.05. Size of Follow-on Offering. The minimum number of
shares to be registered on behalf of the Participating Partners in a Follow-on
Offering shall be such number of shares required to cause a Satisfaction Event
with respect to each Participating Partner upon consummation of such offering
(such minimum number of shares being the "Minimum Registrable Amount"). The
Company shall, to the extent practicable, cause at least the Minimum Registrable
Amount of shares of Common Stock to be sold in an Initial Follow-on Offering in
accordance with the terms of the Registration Rights Agreement. The Company
shall also use its commercially reasonable best efforts to increase the size of
a JK/DG Triggered Follow-on Offering (to the extent requested by DWI II) beyond
the Minimum Registrable Amount (subject to the restrictions set forth in the
last sentence of Section 7.02(b) of the Holdco Partnership Agreement); provided,
that a majority of the joint lead bookrunning underwriters for such Follow-on
Offering agree that such increase will not have a significant negative effect on
pricing of such Follow-on Offering, and so advise the Company and DWI II. The
Company shall not reduce the size of a Follow-on Offering below the Minimum
Registrable Amount and shall comply with all of its obligations under the
Registration Rights Agreement with respect to a Follow-on Offering and a
Universal Triggered Offering, as applicable. If a Follow-on Offering cannot be
consummated because of its failure to satisfy the requirements of this Section
3.05 as a result of market conditions or other Company-related issues, then the
party or parties that triggered such Follow-on Offering shall have all of their
rights under this Article III reinstated, as if the notice triggering such
offering had never been delivered.
Section 3.06. Anti-Manipulation. (a) During the period from the date
of this Agreement until the Final Allocation, except pursuant to a Follow-on
Offering or a Universal Triggered Offering in conformity with this Agreement,
the Registration Rights Agreement and the Holdco Partnership Agreement, each
Contributing Member agrees that it shall not, and each Parent of a Contributing
Member agrees that such Parent shall not and such Parent shall cause Persons
Controlled By such Parent not to, sell or enter into a put transaction or engage
in any similar transaction, including any constructive sale or put, or hedging,
derivative, short sale or other transaction with the same or similar effect, or
enter into any contract, option or other arrangement in respect thereof, or
publicly announce an intention or plan to engage in any of the foregoing, with
respect to any Common Stock, any securities convertible into or exchangeable for
Common Stock or any options, warrants or other rights to acquire Common Stock;
provided, that this Section 3.06(a) shall not prohibit any such sale or other
transaction between or among Persons Controlled By such Contributing Members and
such Contributing Members or the exercise and consummation of the special call
right pursuant to Section 2.04 of the Class B Stockholder Agreement.
<PAGE>
12
(b) During the period from the date of this Agreement until the
Final Allocation, the Company shall not repurchase, redeem or otherwise acquire,
or enter into a call transaction or engage in any similar transaction, including
any constructive purchase or call, or hedging, derivative or other transaction
with the same or similar effect, or enter into any contract, option or other
arrangement in respect thereof, or publicly announce an intention to take any of
the foregoing actions with respect to any Common Stock, any securities
convertible into or exchangeable for Common Stock or any options, warrants or
other rights to acquire Common Stock; provided, that this Section 3.06(b) shall
not prohibit any such purchase or acquisition pursuant to an employee or
director stock ownership or other benefit plan of the Company.
(c) During the period from the date of this Agreement until the
Final Allocation, each Contributing Member agrees that it shall not, and each
Parent of a Contributing Member agrees that such Parent shall not and such
Parent shall cause Persons Controlled By such Parent not to purchase or
otherwise acquire or enter into a call transaction or engage in any similar
transaction, including any constructive purchase or call, or hedging, derivative
or other transaction with the same or similar effect, or enter into any
contract, option or other arrangement in respect thereof, or publicly announce
an intention to take any of the foregoing actions with respect to any Common
Stock, any securities convertible into or exchangeable for Common Stock or any
options, warrants or other rights to acquire Common Stock; provided, that this
Section 3.06(c) shall not prohibit any such purchase, acquisition or other
transaction between or among any Person Controlled By Jeffrey Katzenberg, David
Geffen or Steven Spielberg or any receipt of shares or stock options (or option
exercises) pursuant to an employee or director stock ownership or other benefit
plan of the Company or the exercise and consummation of the special call right
pursuant to Section 2.04 of the Class B Stockholder Agreement.
(d) General Electric Company shall not engage in the conduct
described in Sections 3.06(a) and 3.06(c) for the purpose of impacting, or with
the intent to impact, the amount or timing of any distribution of shares of
Common Stock that any Contributing Member is entitled to receive under Article
VII of the Holdco Partnership Agreement.
ARTICLE IV
Universal Triggered Offering
Section 4.01. Universal Triggered Offering. (a) If a Follow-on
Offering shall not have been consummated on or prior to November 30, 2006, then
at any time during the period from and including December 1, 2006 to February
28, 2007 (the "Universal Period"), unless a Subsequent Follow-on Offering shall
have theretofore been triggered and not revoked, Universal shall have the right
to cause Holdco to initiate a registered offering (the "Universal Triggered
Offering") by causing Holdco to exercise Holdco's demand registration rights
pursuant to Section 1.02 of the Registration Rights Agreement by delivering
written notice (the "Universal Trigger Notice") thereof (which notice shall also
specify the number of shares of Class A Stock proposed to be sold in the
Universal Triggered Offering, which number shall be the estimated number of
shares required to be sold to cause a Satisfaction Event with respect to
Universal) to Holdco during the Universal Period (with a copy of such notice
concurrently delivered to each other Contributing Member). Upon receipt by
Holdco of the Universal Trigger Notice, the general partners of Holdco in their
capacity as such shall, within three Business Days
<PAGE>
13
of the date of such receipt, deliver a Demand Notice to the Company requesting
that the Company register such shares of Class A Stock as soon as practicable
pursuant to Section 1.02 of the Registration Rights Agreement. In no event shall
the Universal Triggered Offering be larger than that necessary to cause a
Satisfaction Event with respect to Universal. If a Universal Triggered Offering
cannot be consummated because it would not result in a Satisfaction Event with
respect to Universal as a result of market conditions or other Company-related
issues, then the Universal Trigger Notice shall be deemed to remain outstanding.
(b) DWI II shall have the right at any time on or prior to the
fourth day preceding the date on which the underwriters propose the printing of
the "red herring" prospectuses in respect of such Universal Triggered Offering
to convert such Universal Triggered Offering from a Universal Triggered Offering
to a Subsequent Follow-on Offering by delivering written notice of such
conversion to Holdco and each Contributing Member at or prior to such pricing.
Upon receipt by Holdco of such notice, such Universal Triggered Offering shall
be treated solely as a Subsequent Follow-on Offering for all purposes and the
number of shares registered in such offering shall comply with the terms of
Section 3.05. If, following such conversion, such Subsequent Follow-on Offering
shall not be consummated for any reason, then such offering shall proceed as a
Universal Triggered Offering and if it still cannot be consummated because it
would not result in a Satisfaction Event with respect to Universal as a result
of market conditions or other Company-related issues, then the Universal Trigger
Notice shall be deemed to remain outstanding.
(c) If a Subsequent Follow-on Offering shall have been triggered on
or prior to November 30, 2006 but not consummated, then Universal shall have the
right (exercised as set forth below) to convert such Subsequent Follow-on
Offering from a Subsequent Follow-on Offering to a Universal Triggered Offering
if such Subsequent Follow-on Offering cannot be consummated in accordance with
Section 3.05. At its election, Universal shall exercise such right by delivering
written notice thereof to each of Holdco, M&J K B, DG-DW and DWI II during the
Universal Period.
ARTICLE V
Additional Agreements; Further Assurances
Section 5.01. Certain Holdco Expenses. (a) DW shall pay or reimburse
(i) all reasonable out-of-pocket third party expenses incurred by the Tax
Matters Partner (as defined in the Holdco Partnership Agreement) under the
Holdco Partnership Agreement while acting in such capacity and (ii) all
reasonable out-of-pocket third party expenses incurred by the General Partners
(as defined in the Holdco Partnership Agreement) under the Holdco Partnership
Agreement in performing their duties as the General Partners, in each case to
the extent arising from events occurring prior to the Final Allocation. In
addition, prior to the Final Allocation, DW shall make available to Holdco and
the General Partners any personnel reasonably necessary to assist such Persons
in the performance of such duties. Notwithstanding anything to the contrary in
this Agreement, none of DW, M&J K, M&J K B, The JK Annuity Trust, the MK Annuity
Trust, Katzenberg 1994 Trust, DG-DW, DW Lips, DWI, DWI II, Jeffrey Katzenberg,
David Geffen, Steven Spielberg or Paul Allen, or any of their respective
Affiliates, shall be entitled to any other fee or compensation (other than
applicable indemnity payments) from
<PAGE>
14
Holdco, DW, any Member or any partner of Holdco for any actions taken on behalf
of, or services rendered to, Holdco pursuant to this Agreement or the Holdco
Partnership Agreement.
(b) DW hereby fully, absolutely, irrevocably and unconditionally
guarantees, as a primary obligor and not merely as a surety, (i) the due and
punctual payment of each payment required to be made by Holdco under Section
10.03 of the Holdco Partnership Agreement, when and as due, and (ii) the due and
punctual performance and observance of, and compliance with, all covenants,
agreements, obligations and liabilities of Holdco under Section 10.03 of the
Holdco Partnership Agreement, in each case to the extent arising from events
occurring prior to the Final Allocation (all such obligations referred to the in
the preceding clauses (i) and (ii) being collectively referred to as the "Holdco
Obligations"). DW further agrees that the Holdco Obligations may be extended,
amended, modified or renewed, in whole or in part, in each case to the extent
arising from events occurring prior to the Final Allocation, without notice to
or further assent from DW and that DW will remain bound by the guarantee set
forth in this Section 5.01(b) notwithstanding any extension, amendment,
modification or renewal of any Holdco Obligation.
Section 5.02. Further Assurances. (a) In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things reasonably necessary, proper
or advisable under applicable laws, regulations and agreements to consummate and
make effective the transactions contemplated by this Agreement.
(b) Without limiting the foregoing, each party hereto shall
cooperate with each other party, and without any further consideration, to
execute and deliver, or use its reasonable best efforts to cause to be executed
and delivered, all instruments, including instruments of contribution, exchange
and transfer and to take all such other actions as such party may reasonably be
requested to take by any such other party hereto from time to time, consistent
with the terms of this Agreement, in order to effectuate the provisions and
purposes of this Agreement.
ARTICLE VI
Representations and Warranties; Indemnification
Section 6.01. Representations and Warranties of Each Party. Each of
the parties hereto hereby represents and warrants, severally and not jointly, to
each of the other parties hereto as of the date hereof as follows:
(i) Such party (other than in the case of a natural person) is duly
organized or formed, validly existing and in good standing under the laws
of its jurisdiction of incorporation or formation, is qualified to do
business in each jurisdiction where such qualification is required (except
for such qualifications the absence of which, individually or in the
aggregate, would not reasonably be expected to have a material adverse
effect on the ability of such party to perform its obligations under this
Agreement and, to the extent a party thereto, the Registration Rights
Agreement, the Holdco Partnership Agreement, the Class B Stockholder
Agreement, the Vulcan Stockholder Agreement, the
<PAGE>
15
Amended LLC Agreement and the Separation Agreement) and has the requisite
power and authority to enter into this Agreement and, to the extent a
party thereto, the Registration Rights Agreement, the Holdco Partnership
Agreement, the Amended LLC Agreement and the Separation Agreement and to
consummate the transactions contemplated hereby and thereby.
(ii) To the extent such party is making a Preferred Contribution
pursuant to Section 2.01(a), a Contribution pursuant to Section 2.02 or a
Holdco Contribution pursuant to Section 2.04, such party will have good
and valid title to the interests or shares, as applicable, to be
contributed, free and clear of all liens, security interests, charges,
options, claims, restrictions or encumbrances of any kind, except, (x) for
the pledges being entered into in accordance with Section 2.01(b) and (y)
in the case of the Class T/T Interests, for any of the foregoing in
respect of accrued but unpaid dividends (collectively, "Liens"), and upon
the applicable contribution, good and valid title to such interests or
shares will pass to the Company or Holdco, as applicable, free and clear
of any Liens, other than Liens arising from actions of the Company or
Holdco, as applicable.
(iii) The execution and delivery of each of this Agreement and, to
the extent a party thereto, the Registration Rights Agreement, the Holdco
Partnership Agreement, the Amended LLC Agreement and the Separation
Agreement and the consummation of the transactions contemplated hereby and
thereby have, other than in the case of a natural person, been duly
authorized by all necessary action on the part of such party. Each of this
Agreement and, to the extent a party thereto, the Registration Rights
Agreement, the Holdco Partnership Agreement, the Class B Stockholder
Agreement, the Vulcan Stockholder Agreement, the Amended LLC Agreement and
the Separation Agreement has been duly executed and delivered by such
party and constitutes a legal, valid and binding obligation of such party,
enforceable against such party in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws of general application
affecting enforcement of creditors' rights generally and (ii) the
availability of the remedy of specific performance or injunctive or other
forms of equitable relief may be subject to equitable defenses and would
be subject to the discretion of the court before which any proceeding
therefor may be brought. The spousal consents being executed by the
persons listed on Exhibit A hereto are enforceable against such persons in
accordance with their terms.
(iv) The execution, delivery and performance of this Agreement and,
to the extent a party thereto, the Registration Rights Agreement, the
Holdco Partnership Agreement, the Class B Stockholder Agreement, the
Vulcan Stockholder Agreement, the Amended LLC Agreement and the Separation
Agreement and the consummation of the transactions contemplated hereby and
thereby and compliance with the terms hereof and thereof shall not
conflict with or result in a breach or violation of (i) other than in the
case of a natural person, such party's articles or certificate of
incorporation (or similar constitutive document) or by-laws or (ii) any
material contract, agreement or instrument to which such party or any of
its subsidiaries is a party or by which any of them are bound, or license,
judgment, order, decree, statute, law, rule or regulation, domestic or
<PAGE>
16
foreign, applicable to such party or any of its subsidiaries or their
respective properties or assets.
(v) In the case of each Member, such party is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D under the
Securities Act.
Section 6.02. Tax Representation. Each Person that received DWA LLC
Interests in the DW Distribution represents that (i) it will treat the DW
Distribution as other than in liquidation of its interest in DW and (ii) its
interest in the DWA LLC Interests immediately following the DW Distribution will
have a tax basis determined under Section 732(a) of the Internal Revenue Code.
Section 6.03. Representation and Warranty of the Company. The
Company hereby represents and warrants to each of the other parties hereto as of
the date hereof that the Common Stock to be issued as consideration for the
Contribution and the Preferred Contributions will have been duly authorized and,
when issued and delivered in accordance with this Agreement, will be validly
issued, fully paid and nonassessable.
Section 6.04. Survival. The representations and warranties in this
Article VI shall survive the consummation of the transactions contemplated in
this Agreement and shall not terminate.
Section 6.05. Indemnification. (a) Each party shall indemnify,
defend and hold harmless each other party (and each such other party's
directors, officers, employees, affiliates, successors and assigns) from and
against all actions, suits, claims, complaints, demands, litigation or legal,
administrative or arbitral proceedings or investigations (collectively,
"Claims"), losses, liabilities, damages, deficiencies, judgments, assessments,
fines, settlements, costs or expenses (including interest, penalties and
reasonable fees, expenses and disbursements of attorneys, experts, personnel and
consultants incurred by the indemnified party in any action or proceeding
between the indemnifying party and the indemnified party or between the
indemnified party and any third party, or otherwise) (collectively, "Losses") to
the extent resulting from any breach of any representation or warranty of such
party contained in Section 6.01.
(b) Each Person that received DWA LLC Interests in the DW
Distribution shall indemnify, defend and hold harmless DW and the other Members
(and their respective directors, officers, employees, affiliates, successors and
assigns) from and against all Claims and Losses, including any effect resulting
from the application of Section 743(b)(2) of the Internal Revenue Code, to the
extent resulting from any breach by such Person of the representation contained
in Section 6.02.
(c) The Company shall indemnify, defend and hold harmless each other
party (and each such other party's directors, officers, employees, affiliates,
successors and assigns) from and against all Claims and Losses to the extent
resulting from any breach of the representation and warranty of the Company
contained in Section 6.03.
(d) The Person making a claim under this Section 6.05 is referred to
as the "Indemnitee" and the party subject to providing indemnification in
respect of such claim is
<PAGE>
17
referred to as the "Indemnitor". All claims by any Indemnitee under this Section
6.05 shall be asserted and resolved as follows:
Promptly after receipt by the Indemnitee of notice of any Claim or
circumstances which, with the lapse of time, would or might give rise to a
Claim or Loss or the commencement (or threatened commencement) of a Claim
or any action, proceeding or investigation that may result in a Loss
(including a claim of a Loss that does not involve a third-party claim)
(an "Asserted Liability"), the Indemnitee shall give notice thereof (the
"Claims Notice") to the Indemnitor; provided, that failure to give a
Claims Notice in the context of a third-party claim shall in no way
diminish the Indemnitor's obligations hereunder, except to the extent such
failure is finally determined by a court of competent jurisdiction to have
actually and materially prejudiced the Indemnitor. The Claims Notice shall
describe the Asserted Liability in reasonable detail and shall indicate
the amount (estimated, if necessary and to the extent feasible) of the
Loss that has been or may be suffered by the Indemnitee.
(e) The Indemnitor may elect to defend (and, unless the Indemnitor
has specified any reservations or exceptions, to seek to settle or compromise,
so long as such settlement or compromise contains an unconditional release of
each Indemnitee, whether or not a party to the applicable third party claim), at
its own expense and by its own counsel reasonably acceptable to the Indemnitee,
any Asserted Liability arising from a third-party claim. If the Indemnitor
elects to compromise or defend such Asserted Liability, it shall within 30 days
(or sooner, if the nature of the Asserted Liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee shall cooperate, at the
expense of the Indemnitor, in the compromise of, or defense against, such
Asserted Liability. Should the Indemnitor make such election, the Indemnitor
shall not be liable to the Indemnitee for legal expenses subsequently incurred
by the Indemnitee in connection with the compromise of, or defense against, such
Asserted Liability. If the Indemnitor elects not to compromise or defend the
Asserted Liability, fails to notify the Indemnitee of its election as herein
provided or contests its obligation to indemnify under this Agreement, the
Indemnitee may pay, compromise or defend such Asserted Liability.
Notwithstanding the foregoing, neither the Indemnitor nor the Indemnitee may
settle or compromise any Asserted Liability over the objection of the other;
provided, that consent to settlement or compromise shall not be unreasonably
withheld in the case of a settlement or compromise which involves only monetary
relief which the Indemnitor has agreed to pay and which includes a full and
unconditional release of the Indemnitee. In any event, the Indemnitee and the
Indemnitor may participate, at their own expense, in the defense of such
Asserted Liability. If the Indemnitor chooses to defend any Asserted Liability,
the Indemnitee shall make available to the Indemnitor any books, records or
other documents within its control that are necessary or appropriate for such
defense, and, if the Indemnitee chooses to defend any Asserted Liability, the
Indemnitor shall make available to the Indemnitee any books, records or other
documents within its control that are necessary or appropriate for such defense.
<PAGE>
18
ARTICLE VII
General Provisions
Section 7.01. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given and received (a) on
the date of delivery if delivered personally, or by facsimile upon confirmation
of transmission by the sender's fax machine if sent on a Business Day (or
otherwise on the next Business Day) or (b) on the first Business Day following
the date of dispatch if delivered by a recognized next-day courier service. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
(i) if to the Company, to:
DreamWorks Animation SKG, Inc.
Grandview Building
1000 Flower Street
Glendale, California 91201
Fax: (818) 659-6123
Attention: Katherine Kendrick, General Counsel
with a copy to:
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Fax: (212) 474-3700
Attention: Faiza J. Saeed
(ii) if to DWI II, to:
DW Investment II, Inc.
505 Fifth Avenue South
Suite 900
Seattle, WA 98104
Fax: (206) 342-3000
Attention: W. Lance Conn, Executive Vice President, Investment
Management; and
Executive Vice President, Legal
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Fax: (213) 687-5600
<PAGE>
19
Attention: Nicholas P. Saggese
David C. Eisman
(iii) if to any other party hereto, to the address of such party
specified on the signature page hereto.
Section 7.02. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective (a) when one or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart or (b) if later, immediately
after effectiveness of the Underwriting Agreement.
Section 7.03. Entire Agreement; No Third Party Beneficiaries. (a)
This Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, other than as set
forth in Section 6.05, express or implied, is intended to or shall confer upon
any other Person any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement.
Section 7.04. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York without giving
effect to applicable principles of conflict of laws, except to the extent the
substantive laws of the State of Delaware are mandatorily applicable under
Delaware law.
Section 7.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
Section 7.06. Assignment; Amendments. (a) Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto, in whole or in part (whether by operation of law or
otherwise), without the prior written consent of the other parties, and any
attempt to make any such assignment without such consent shall be null and void.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by, the parties and their respective
successors and assigns.
(b) No amendment to this Agreement shall be effective unless it
shall be in writing and signed by each of the Company, DW, Holdco, M&J K B,
DG-DW, DWI II and Contributing Members (including M&J K B, DG-DW and DWI II)
owning at least a majority-in-
<PAGE>
20
interest of the Interests (as defined in the Holdco Partnership Agreement) then
outstanding (based on their Adjusted DreamWorks Participation Percentages (as
defined in the Holdco Partnership Agreement)); provided, that no amendment shall
affect the rights or obligations of a party hereto without the consent of such
party. The parties acknowledge and agree that the provisions of Articles III and
IV hereof are solely for the benefit of the Contributing Members, the Company
and Holdco.
Section 7.07. Enforcement. (a) Each party hereto acknowledges that
the other parties would not have an adequate remedy at law for money damages in
the event that any of the covenants or agreements of any of the other parties in
this Agreement were not performed in accordance with its terms, and it is
therefore agreed that each party hereto, in addition to and without limiting any
other remedy or right it may have, will have the right to an injunction or other
equitable relief in any court of competent jurisdiction, enjoining any such
actual or potential breach and enforcing specifically the terms and provisions
hereof, and each party hereto hereby waives (i) any and all defenses it may have
on the ground of lack of jurisdiction or competence of the court to grant such
an injunction or other equitable relief and (ii) the need to post any bond that
may be required in connection with the granting of such an injunction or other
equitable relief.
(b) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
Section 7.08. Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
Section 7.09. Submission to Jurisdiction; Waivers. With respect to
any suit, action or proceeding relating to this Agreement (collectively, a
"Proceeding"), each party to this Agreement irrevocably (a) consents and submits
to the exclusive jurisdiction of the courts of the States of New York and the
Court of Chancery of the State of Delaware and any court of the United States
located in the Borough of Manhattan in New York City; (b) waives any objection
which such party may have at any time to the laying of venue of any Proceeding
brought in any such court, waives any claim that such Proceeding has been
brought in an inconvenient forum and further waives the right to object, with
respect to such Proceeding, that such court does not have jurisdiction over such
party; (c) consents to the service of process at the address set forth for
notices in Section 7.01 herein; provided, that such manner of service of process
shall not preclude the service of process in any other manner permitted under
applicable law and (d) waives, to the fullest extent permitted by applicable
law, any and all rights to trial by jury in connection with any Proceeding.
<PAGE>
21
IN WITNESS HEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
DREAMWORKS ANIMATION SKG, INC.,
by
-------------------------------
Name:
Title:
Address:
DREAMWORKS L.L.C.,
by
-------------------------------
Name:
Title:
Address:
[HOLDCO] LLLP,
by
-------------------------------
Name:
Title:
Address:
M&J K DREAM LIMITED PARTNERSHIP,
By M&J K DREAM CORP.,
General Partner
by
----------------------------
Name: Jeffrey Katzenberg
Title: President
Address:
<PAGE>
22
M&J K B LIMITED PARTNERSHIP,
By M&J K DREAM CORP.,
General Partner
by
----------------------------
Name: Jeffrey Katzenberg
Title: President
Address:
THE JK ANNUITY TRUST,
by
-------------------------------
Name:
Title:
Address:
THE MK ANNUITY TRUST,
by
-------------------------------
Name:
Title:
Address:
KATZENBERG 1994 IRREVOCABLE TRUST,
by
-------------------------------
Name:
Title:
Address:
<PAGE>
23
DG-DW, L.P.,
By DG-DW, INC.,
General Partner
by
----------------------------
Name: David Geffen
Title: President
Address:
DW LIPS, L.P.,
By DW SUBS. INC.,
General Partner
by
----------------------------
Name: Steven Spielberg
Title: President
Address:
DW INVESTMENT II, INC.,
by
-------------------------------
Name:
Title:
LEE ENTERTAINMENT, L.L.C.,
by
-------------------------------
Name:
Title:
Address:
with a copy to:
<PAGE>
24
CHEMICAL INVESTMENTs, INC.,
by
-------------------------------
Name:
Title:
Address:
MICROSOFT CORPORATION,
by
-------------------------------
Name:
Title:
Address:
ZIFF INVESTORS PARTNERSHIP,
L.P. IiA,
By Ziff Investment Management,
LLC, General Partner
by
----------------------------
Name:
Title:
Address:
CARL O. ROSENDAHL,
-------------------------------
Address:
<PAGE>
25
VIVENDI UNIVERSAL ENTERTAINMENT LLLP,
by
----------------------------
Name:
Title:
Address:
THOMSON INC.,
by
----------------------------
Name:
Title:
Address:
KADOKAWA ENTERTAINMENT U.S. INC.,
by
----------------------------
Name:
Title:
Address:
GENERAL ELECTRIC COMPANY,
by
----------------------------
Name:
Title:
Address:
<PAGE>
26
NBC UNIVERSAL, INC.,
by
----------------------------
Name:
Title:
Address:
CJ CORP.,
by
----------------------------
Name:
Title:
Address:
STEVEN SPIELBERG,
----------------------------
Address:
JEFFREY KATZENBERG,
----------------------------
Address:
DAVID GEFFEN,
----------------------------
Address:
<PAGE>
27
PAUL ALLEN,
----------------------------
Address: