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Note 25. Contractual obligations and other commitments
These injunctions are imposed for a period of five-years and are renewable once. At the end of the five-year period, the French Competition Authority
will review the competition situation to determine whether the injunctions should be kept in place. If market conditions have changed significantly,
Canal+ Group will be able to request that these injunctions be lifted or partially or totally revised. An independent trustee, proposed by Canal+ Group
and approved by the French Competition Authority on September 25, 2012, will be responsible for monitoring the implementation of the injunctions.
(c)
In connection with the divestiture of Canal+ Nordic in October 2003, Canal+ Group had retained distribution guarantees given in favor of Canal Digital
and Telenor Broadcast Holding by a former subsidiary. These guarantees, which were covered by a counter-guarantee given by the buyers, expired
on December 31, 2014.
(d)
As part of the divestiture of NC Numericable on March 31, 2005, the Canal+ Group granted specific guarantees with a €241 million cap (including
tax and social risks). Specific risks relating to cable networks used by NC Numericable were included in this maximum amount and were counter-
guaranteed by Orange for up to €151 million. As of December 31, 2014, all of these guarantees were expired.
(e)
As part of the NBC Universal transaction which occurred in May 2004, Vivendi and General Electric (GE) gave certain reciprocal commitments
customary for this type of transaction, and Vivendi retained certain liabilities relating to taxes and excluded assets. Vivendi and GE undertook to
indemnify each other against losses resulting from, among other things, any breach of their respective representations, warranties and covenants.
Neither party will have any indemnification obligations for losses arising as a result of any breach of representations and warranties (i) for any
individual item where the loss is less than $10 million and (ii) in respect of each individual item where the loss is equal to or greater than $10 million
except where the aggregate amount of all losses exceeds $325 million. In that event, the liable party will be required to pay the amount of losses
which exceeds $325 million, but in no event will the aggregate indemnification payable exceed $2,088 million.
In addition, Vivendi will have indemnification obligations for 50% of every US dollar of loss up to $50 million and for all losses in excess of
$50 million relating to liabilities arising out of the Most Favored Nation provisions set forth in certain contracts. As part of the unwinding of IACI’s
interest in VUE on June 7, 2005, Vivendi’s commitments with regard to environmental matters were amended and Vivendi’s liability is now subject
to a
de minimis
exception of $10 million and a payment basket of $325 million.
The representations and warranties given as part of the NBC Universal transaction other than those in respect of authorization, capitalization and tax
representations terminated on August 11, 2005. Notices of environmental claims related to remediation had to be brought by May 11, 2014. Other
claims, including those related to taxes, will be subject to applicable statutes of limitations.
The sale of Vivendi’s interest in NBC Universal to GE completed on January 25, 2011 did not modify these commitments.
(f)
In connection with the sale of its 49.9% interest in Sithe to Exelon in December 2000, Vivendi granted customary representations and warranties.
Claims, other than those made in relation to foreign subsidiary commitments, are capped at $480 million. In addition, claims must exceed $15 million,
except if they relate to foreign subsidiaries or the divestiture of certain electrical stations to Reliant in February 2000. Some of these warranties
expired on December 18, 2005. Some environmental commitments still exist and any potential liabilities related to contamination risks will survive
for an indefinite period of time.
(g)
In connection with the sale of real estate assets in June 2002 to Nexity, Vivendi granted two autonomous first demand guarantees, one for
€40 million and one for €110 million, to several subsidiaries of Nexity (Nexim 1 to 6). The guarantees are effective until June 30, 2017.
(h)
On December 14, 2010, Vivendi, Deutsche Telekom, Mr. Solorz-Zak (Elektrim’s main shareholder) and Elektrim’s creditors, including the Polish State
and Elektrim’s bondholders, entered into various agreements to put an end to the litigation surrounding the share capital ownership of Polska
Telefonia Cyfrowa (PTC), a mobile telecommunication operator. With respect to these agreements, Vivendi notably entered into the following
commitments:
–– Vivendi granted to Deutsche Telekom a guarantee over Carcom that was capped at €600 million, which expired in August 2013,
–– Vivendi committed to compensate the Law Debenture Trust Company (LDTC) against any recourse for damages that could be brought against
LDTC in connection with the completed transaction, for an amount up to 18.4% for the first €125 million, 46% between €125 million and
€288 million, and 50% thereafter, and
–– Vivendi committed to compensate Elektrim’s administrator for the consequences of any action for damages that may be taken against it, in
connection with the decisions that were taken to end certain procedures.
(i)
As part of the sale of 88% of Vivendi’s interest in Activision Blizzard, which was completed on October 11, 2013 (the “Closing Date”), Vivendi, ASAC
II LP, and Activision Blizzard gave certain reciprocal commitments customary for this type of transaction (representations, warranties and covenants).
Vivendi, ASAC II LP, and Activision Blizzard undertook to indemnify each other against any losses stemming from any breach of their respective
commitments. Such indemnification is unlimited as to time and amount.
In addition, Vivendi has agreed to indemnify Activision Blizzard with respect to any tax or other liabilities of Amber Holding Subsidiary Co. (“Amber”),
the Vivendi subsidiary acquired by Activision Blizzard, relating to periods preceding the Closing Date. Such indemnification is unlimited as to time and
amount. Tax attributes (mainly net operating loss) held by Amber and assumed by Activision Blizzard were estimated at more than $700 million, which
represent a potential future tax benefit of approximately $245 million. Vivendi agreed to indemnify Activision Blizzard, under certain circumstances,
with respect to these tax attributes, subject to a cap of $200 million limited to taxable years ending on or prior to December 31, 2016.
On May 22, 2014, in accordance with the agreements entered into on July 25, 2013, Vivendi sold a first tranche of 41.5 million Activision Blizzard
shares, representing 5.8% interest in this company. Following this sale, Vivendi owns a residual interest of 41.5 million Activision Blizzard shares,
which is subject to a lock-up restriction that expired on January 7, 2015. Since this date, Vivendi is free to sell its remaining Activision Blizzard
shares without restriction.
Activision Blizzard agreed to file a registration statement prior to each sale window to enable Vivendi to sell the Activision Blizzard shares in a
public offering.
Prior to any sale of Activision Blizzard shares by Vivendi in a market offering that occurs prior to the second anniversary of the Closing Date
(October 11, 2015), Vivendi must notify Activision Blizzard of its intention to sell the shares and Activision Blizzard may, at its election, offer to
purchase some or all of the shares that Vivendi intends to sell in such market offering. Vivendi may accept or decline such offer at its sole discretion.
ASAC II LP was also subject to a lock-up provision which expired on April 9, 2014.
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