{"id":43776,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/transition-services-agreement-viacom-inc-and-blockbuster-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"transition-services-agreement-viacom-inc-and-blockbuster-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/transition-services-agreement-viacom-inc-and-blockbuster-inc.html","title":{"rendered":"Transition Services Agreement &#8211; Viacom Inc. and Blockbuster Inc."},"content":{"rendered":"<pre>                         TRANSITION SERVICES AGREEMENT\n\n\n\n                          DATED AS OF AUGUST 16, 1999\n\n\n\n                                BY AND BETWEEN\n\n\n\n                                  VIACOM INC.\n\n\n\n                                      AND\n\n\n\n                               BLOCKBUSTER INC.\n\n \n                               TABLE OF CONTENTS\n\n                                                                            Page\n                                                                            ----\n\n                                   ARTICLE I\n                                 FEES AND TERM\n\nSection 1.01.  Price and Payment...............................................1\nSection 1.02.  Term............................................................2\n\n                               ARTICLE IISERVICES\nSection 2.01.  Services........................................................2\n\n                                  ARTICLE III\n                  LIMITATION OF LIABILITY AND INDEMNIFICATION\n\nSection 3.01.  Transitional Services...........................................3\nSection 3.02.  Indemnity by Service Receiver...................................3\nSection 3.03.  Indemnification Procedures......................................4\n\n                                  ARTICLE IV\n                                 MISCELLANEOUS\n\nSection 4.01.  Limitation of Liability.........................................4\nSection 4.02.  Relationship of the Parties.....................................4\nSection 4.03.  Force Majeure...................................................4\nSection 4.04.  Amendments......................................................5\nSection 4.05.  Successors and Assignment.......................................5\nSection 4.06.  Severability....................................................5\nSection 4.07.  Entire Agreement................................................5\nSection 4.08.  Notices.........................................................5\nSection 4.09.  Governing Law...................................................6\nSection 4.10.  Counterparts....................................................7\n\n \n                         TRANSITION SERVICES AGREEMENT\n                         -----------------------------\n\n          TRANSITION SERVICES AGREEMENT (this 'Agreement') dated as of\n                                               ---------              \nAugust 16, 1999 by and between VIACOM INC., a Delaware corporation ('Viacom')\n                                                                     ------  \nand BLOCKBUSTER INC., a Delaware corporation and an indirect, wholly owned\nsubsidiary of Viacom ('Blockbuster').\n                       -----------   \n\n                                   RECITALS\n\n          WHEREAS, since September 29, 1994, Viacom has owned and operated the\nbusinesses and operations related to Blockbuster;\n\n          WHEREAS, Viacom presently intends to split-off Blockbuster in a tax-\nfree transaction;\n\n          WHEREAS, prior to such split-off, Blockbuster proposes to issue shares\nof its common stock in an initial public offering registered under the\nSecurities Act of 1933, as amended;\n\n          WHEREAS, prior to the initial public offering of Blockbuster, Viacom\nhas heretofore provided certain services to Blockbuster;\n\n          WHEREAS, Blockbuster has requested from Viacom that certain such\nservices continue for a limited period of time pursuant to this Agreement; and\n\n          WHEREAS, Viacom agreed to provide and Blockbuster agreed to be\nprovided with these services on terms and conditions set forth herein (Viacom as\nsuch provider of transitional services referred to herein as the 'Service\n                                                                  -------\nProvider' and Blockbuster as such receiver of transitional services referred to\n--------                                                                       \nherein as the 'Service Receiver').\n               ----------------   \n\n          NOW, THEREFORE, in consideration of the above premises and the mutual\ncovenants contained herein, it is agreed by and between the parties as follows:\n\n     Capitalized terms not otherwise defined herein have the meaning given to\nthem in the Initial Public Offering and Split-Off Agreement dated as of the\ndated hereof among Viacom, Viacom International Inc. and Blockbuster.\n\n                                   ARTICLE I\n                                 FEES AND TERM\n\n          Section 1.01.  Price and Payment.  (a)  As consideration for the\n                         -----------------                                \ntransitional services to be provided to Blockbuster by Viacom under the terms of\nthis Agreement, Blockbuster shall initially pay to Viacom a services fee (the\n'Blockbuster Services Fee') of Dollars ($150,000) per month, which is based\n-------------------------                                                       \nupon Viacom's cost in providing these services. The Blockbuster Services Fee\nonly represents payment with respect to the transitional services and not for\nother payments, costs expenses related to the underlying transitional services\nthemselves.  The \n\n \nBlockbuster Services Fee shall be payable by Blockbuster to Viacom in arrears 15\ndays after the close of each month (prorated for any partial month) during the\nterm of this Agreement. Any transitional services provided by Viacom to\nBlockbuster beyond the transitional services covered by the Blockbuster Services\nFee shall be billed to Blockbuster on a cost basis, or on such other basis as\nthe parties may agree from time to time. The Blockbuster Services Fee shall be\nreviewed and either increased or reduced from time to time to account for\nViacom's cost of providing the transitional services hereunder.\n\n          (b) In addition to the Blockbuster Services Fee, Blockbuster shall\npromptly pay or reimburse Viacom for any out-of-pocket payments, costs or\nexpenses incurred in good faith associated with, or related to, the underlying\ntransitional services provided by Viacom hereunder.\n\n          Section 1.02.  Term.  The term of this Agreement (the 'Term') shall\n                         ----                                    ----        \ncommence on the date hereof and shall expire on the closing of the Split-Off.\n\n                                  ARTICLE II\n                                   SERVICES\n\n          Section 2.01.  Services.  (a)  Viacom agrees to, or will cause one of\n                         --------                                              \nits Subsidiaries to, provide the following transitional services (subject to\nsuch modification or adjustment as may be mutually agreed upon by the parties)\nto Blockbuster and its Subsidiaries or Affiliates during the Term:\n\n          (i)   Certain Cash Management Services:  Viacom shall assist \n                --------------------------------\n     Blockbuster with certain of its treasury and cash management needs,\n     including foreign currency and certain hedging activities, consistent with\n     past practice.\n\n          (ii)  Certain Employee Benefit Plans Administration:  Viacom shall\n                ---------------------------------------------               \n     assist in the administration to certain employees of Blockbuster and its\n     Subsidiaries all benefit plans and a 401(k) plan consistent with past\n     practice.\n\n          (iii) Insurance Administration:  Viacom shall administer insurance\n                ------------------------                                    \n     coverage on behalf of Blockbuster and its Subsidiaries and Affiliates under\n     Viacom's insurance policies against certain risks and in amounts consistent\n     with past practice.   To the extent any loss is incurred by Blockbuster and\n     its Subsidiaries or Affiliates, such entity shall be responsible for the\n     payment of any deductible amounts related thereto and any amounts in excess\n     of applicable coverage limits. In the event that the 'aggregate stop loss'\n     deductible is exceeded in any insurance period, Blockbuster and its\n     Subsidiaries and Affiliates, on one hand, and Viacom and its Subsidiaries\n\n                                       2\n\n \n     and Affiliates, on the other hand, shall be responsible for their pro rata\n                                                                       --- ----\n     portion of such deductible based upon the losses of such parties submitted\n     to Viacom's insurance carrier(s) in such period.  To the extent that one\n     party is allocated more than its pro rata portion of the such deductible\n                                      --- ----                               \n     due to the timing of losses submitted to Viacom's insurance carrier(s), the\n     other party shall promptly pay the first party an amount so that each party\n     has been properly allocated its pro rata portion of the aggregate stop loss\n                                     --- ----                                   \n     deductible.\n\n          (iv)  Certain Accounting and Financial Services:  Viacom shall provide\n                -----------------------------------------                       \n     to Blockbuster internal audit supervision and shall assist Blockbuster with\n     its periodic and public reporting requirements pursuant to the U.S.\n     securities laws.\n\n          (v)   Tax Department:  Viacom shall provide to Blockbuster tax\n                --------------                                          \n     compliance, reporting and planning services for international, U.S.\n     federal, state and local tax matters consistent with past practice and in\n     compliance with the Tax Matters Agreement.\n\n          (vi)  Certain Legal Services: Viacom shall provide to Blockbuster\n                ----------------------                                     \n     certain legal services consistent with past practice.\n\n          (vii) Certain Management Information System Services.  Viacom shall\n                ----------------------------------------------         \n     provide to Blockbuster certain management information system services\n     consistent with past practice.\n\n                                  ARTICLE III\n                  LIMITATION OF LIABILITY AND INDEMNIFICATION\n\n          Section 3.01.  Transitional Services.  (a)  In the absence of gross\n                         ---------------------                               \nnegligence or reckless or willful misconduct on Service Provider's part, and\nwhether or not it is negligent, Service Provider shall not be liable for any\nclaims, liabilities, damages, losses, costs, expenses (including, but not\nlimited to, settlements, judgments, court costs and reasonable attorneys' fees),\nfines and penalties, arising out of or relating to any actual or alleged injury,\nloss or damage of any nature whatsoever in providing or failing to provide the\ntransitional services to Service Receiver.\n\n          (b) Service Provider's liability for damages to Service Receiver for\nany cause whatsoever, and regardless of the form of action, whether in contract\nor in tort, including gross negligence or willful misconduct, shall be limited\nto the Blockbuster Services Fee.\n\n          Section 3.02.  Indemnity by Service Receiver.  (a) Service Receiver\n                         -----------------------------                       \nshall indemnify, defend and hold Service Provider harmless against any and all\nclaims, liabilities, \n\n                                       3\n\n \ndamages, losses, costs, expenses (including, but not limited to, settlements, \njudgments, court costs and reasonable attorneys' fees) and any loss or damage \nof any nature whatsoever (including, without limitation, loss of or damage to \nproperty, or damage to the environment) ('Losses') arising out of or relating\n                                          ------          \nto the providing or failing to provide the transitional services by such Service\nProvider except for Losses which are the direct and sole result of gross\nnegligence or willful misconduct of the personnel of Service Provider.\n\n          (b) Any claim for indemnity under this Article must be made by written\nnotice to the indemnifying party within one (1) year after the discovery\nthereof.  Notwithstanding the foregoing, the indemnities contained in this\nArticle shall survive for a period of three (3) years after the Term.\n\n          Section 3.03.  Indemnification Procedures.  The indemnification\n                         --------------------------                      \nprocedures set forth in Section 8.01(b) of the IPO and Split-Off Agreement are\nincorporated herein and made a part hereof for all purposes as if fully set\nforth herein and shall govern the parties' rights and obligations with respect\nthereto.\n\n                                  ARTICLE IV\n                                 MISCELLANEOUS\n\n\n          Section 4.01. Limitation of Liability.  Neither Viacom nor Blockbuster\n                        -----------------------                                 \nshall be liable to the other for any special, indirect, incidental or\nconsequential damages of the other arising in connection with this Agreement.\n\n          Section 4.02.  Relationship of the Parties.  It is expressly\n                         ---------------------------                  \nunderstood and agreed that in rendering the transitional services hereunder,\nViacom is acting as an independent contractor and that this Agreement does not\nconstitute Viacom as an employee, agent or other representative of Blockbuster\nfor any purpose whatsoever.  Viacom does not have the right or authority to\nenter into any contract, warranty, guarantee or other undertaking in the name or\nfor the account of Blockbuster, or to assume or create any obligation or\nliability of any kind, express or implied, on behalf of Blockbuster, or to bind\nBlockbuster in any manner whatsoever, or to hold itself out as having any right,\npower or authority to create any such obligation or liability on behalf of\nBlockbuster or to bind Blockbuster in any manner whatsoever (except as to any\nactions taken by Viacom at the express written request and direction of\nBlockbuster).\n\n          Section 4.03.  Force Majeure.  In the event that Viacom is prevented\n                         -------------                                        \nfrom performing, or is unable to perform, any of its obligations under this\nAgreement due to any act of God, fire, casualty, flood, war, strike, lock out,\nfailure of public utilities, injunction or any act, exercise, assertion or\nrequirement of governmental authority, epidemic, destruction of production\nfacilities, insurrection, inability to procure materials, labor, equipment,\ntransportation or energy sufficient to meet manufacturing needs, or any other\ncause beyond the reasonable control of Viacom, and if Viacom shall have used its\nreasonable best efforts to avoid such occurrence and \n\n                                       4\n\n \nminimize its duration and has given prompt written notice to Blockbuster, then\nViacom's performance for the period of delay or inability to perform due to such\noccurrence shall be suspended. Should Viacom fail to perform hereunder and shall\nhave provided proper notice to Blockbuster that it is unable to perform on\naccount of one or more reasons set forth in this section, Blockbuster may obtain\nreplacement services from a third party for the duration of such delay or\ninability to perform, or for such longer period as Blockbuster shall be\nreasonably required to commit to in order to obtain such replacement services\nand the Blockbuster Services Fee shall be reduced accordingly.\n\n          Section 4.04.  Amendments.  This Agreement shall not be supplemented,\n                         ----------                                            \namended or modified in any manner whatsoever (including without limitation by\ncourse of dealing or of performance or usage of trade) except in writing signed\nby the parties.\n\n          Section 4.05.  Successors and Assignment.  This Agreement shall be\n                         -------------------------                          \nbinding upon and inure to the benefit of the parties and their respective\nsuccessors and permitted assigns.  This Agreement may not be assigned by any\nparty by operation of law or otherwise without the express written consent of\nthe other party (which consent may be granted or withheld by such party).\n\n          Section 4.06.  Severability.  Wherever possible, each provision of\n                         ------------                                       \nthis Agreement shall be interpreted in such a manner as to be effective and\nvalid under applicable law.  If any portion of this Agreement is declared\ninvalid for any reason in any jurisdiction, such declaration shall have no\neffect upon the remaining portions of this Agreement, which shall continue in\nfull force and effect as if this Agreement had been executed with the invalid\nportions thereof deleted; provided that the entirety of this Agreement shall\n                          --------                                          \ncontinue in full force and effect in all other jurisdictions.\n\n          Section 4.07.  Entire Agreement.  Other than the IPO and Split-Off\n                         ----------------                                   \nAgreement, the Release and Indemnification Agreement, the Registration Rights\nAgreement and the Tax Matters Agreement, this Agreement constitutes the entire\nagreement of the parties hereto with respect to the subject matter hereof and\nthereof and supersedes all prior agreements and undertakings, both written and\noral, between the parties with respect to the subject matter hereof and thereof.\n\n          Section 4.08.  Notices.  All notices, consents, requests, approvals,\n                         -------                                              \nand other communications provided for or required herein, and all legal process\nin regard thereto, must be in writing and shall be deemed validly given, made or\nserved, (a) when delivered personally or sent by telecopy to the facsimile\nnumber indicated below with a required confirmation copy sent in accordance with\nsubsection (c) below; or (b) on the next business day after delivery to a\nnationally recognized express delivery service with instructions and payment for\novernight delivery; or (c) on the fifth (5th) day after deposited in any\ndepository regularly maintained by the United States postal service, postage\nprepaid, certified or registered mail, return receipt \n\n                                       5\n\n \nrequested, addressed to the following addresses or to such other address as the\nparty to be notified shall have specified to the other party in accordance with\nthis section:\n\n          If to Viacom:\n\n               Viacom Inc.\n               1515 Broadway\n               New York New York  10036\n               Attention:  Michael D. Fricklas, General Counsel\n               Phone Number:  212-258-6070\n               Fax Number:  212-258-6099\n\n          If to Blockbuster:\n\n               Blockbuster Inc.\n               1201 Elm Street\n               Dallas, Texas  75270\n               Attention:  Ed Stead, General Counsel\n               Phone Number:  214-854-3499\n               Fax Number:  214-854-3677\n\n          Section 4.09.  Governing Law.  This Agreement shall be governed by and\n                         -------------                                          \nconstrued in accordance with the laws of the State of New York.  Each of the\nparties hereto agrees that any dispute relating to or arising from this\nAgreement or the transactions contemplated hereby shall be resolved only in the\nCourt of the State of New York sitting in the County of New York or the United\nStates District Court for the Southern District of New York and the appellate\ncourts having jurisdiction of appeals in such courts.  In that context, and\nwithout limiting the generality of the foregoing, each of the parties hereby\nirrevocably and unconditionally:\n\n          (a) submits for itself and its property in any legal suit, action or\nproceeding relating to this Agreement or transaction contemplated hereby, or for\nrecognition and enforcement of any judgment in respect thereof, to the exclusive\njurisdiction of the Courts of the State of New York sitting in the County of New\nYork or the United States District Court for the Southern District of New York\nand appellate courts having jurisdiction of appeals in such courts, and each of\nthe parties hereto irrevocably and unconditionally agrees that all claims in\nrespect of any such suit, action, or proceeding shall be heard and determined in\nsuch New York State court or, to the extent permitted by law, in such federal\ncourt;\n\n          (b) consents that any such suit, action or proceeding may and shall be\nbrought in such courts and waives any objection that it may now or hereafter\nhave to the venue or jurisdiction or any such action or proceeding in such court\nor that such action or proceeding was brought in an inconvenient forum and\nagrees not to plead or claim the same;\n\n                                       6\n\n \n          (c) agrees that service of process in any such action or proceeding\nmay be effected by mailing a copy thereof by registered or certified mail (or\nany substantially similar form of mail), postage prepaid, to such party in its\naddress as provided in Section 4.08 hereof;\n\n          (d) agrees that nothing herein shall affect the right to effect\nservice of process in any other manner permitted by New York law; and\n\n          (e) agrees that this Agreement has been entered into in the State of\nNew York and performed in part in the State of New York.\n\n          Section 4.10.  Counterparts.  This Agreement may be executed in two or\n                         ------------                                           \nmore counterparts, each of which shall be deemed an original, and all of which\nshall constitute one and the same instrument.\n\n                                       7\n\n \n          IN WITNESS WHEREOF, the parties have caused this Agreement to be\nexecuted as of the date first written above by their respective officers\nthereunto duly authorized.\n\n\n                              VIACOM INC.\n\n\n                              By: \/s\/ MICHAEL D. FRICKLAS\n                                  -----------------------------------\n                                  Name:  Michael D. Fricklas\n                                  Title: Sr. Vice President, General Counsel \n                                         and Secretary\n\n\n                              BLOCKBUSTER INC.\n\n\n                              By: \/s\/ EDWARD B. STEAD\n                                  -----------------------------------\n                                  Name:  Edward B. Stead\n                                  Title: Exec. Vice President, General Counsel\n                                         and Secretary\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6911,9252],"corporate_contracts_industries":[9469,9465],"corporate_contracts_types":[9622,9628],"class_list":["post-43776","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-blockbuster-inc","corporate_contracts_companies-viacom-inc","corporate_contracts_industries-media__rental","corporate_contracts_industries-media__broadcasting","corporate_contracts_types-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43776"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43776"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43776"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}