Exhibit 10.2
TAX SHARING
AGREEMENT
This Tax Sharing Agreement (this
“Agreement”), dated as of July 9, 2008, is entered
into by and among Vivendi Holding I Corp., a Delaware corporation
(“Vivendi”), Vivendi Games, Inc., a Delaware
corporation (“Vivendi Games”), Activision
Blizzard, Inc., a Delaware corporation (the
“Company”) and any other person who becomes a party to
this Agreement in accordance with the terms hereof.
WHEREAS, Vivendi is the United States parent of
the Vivendi Group, and has filed, and anticipates to continue
filing, Vivendi Group Tax Returns;
WHEREAS, on December 1, 2007, Vivendi
S.A., VGAC LLC, Vivendi Games, the Company and Sego Merger
Corporation entered into a Business Combination Agreement (the
“Combination Agreement”), which provides for, among
other things, the combination of the respective businesses of the
Company and Vivendi Games;
WHEREAS, following the consummation of the
transactions contemplated by the Combination Agreement, Vivendi
will directly or indirectly own a majority of issued and
outstanding shares of common stock, par value $0.000001 per share
of the Company;
WHEREAS, Vivendi anticipates that, subsequent
to the combination of the businesses of the Company and Vivendi
Games pursuant to the Combination Agreement, the Company, Vivendi
Games, and other members of the Company Group may be eligible, or
required, to join with the Vivendi Group in the filing of Vivendi
Group Tax Returns during one or more taxable periods ending on or
after the Closing Date (as defined below); and
WHEREAS, the parties wish to provide for an
allocation and indemnification of Tax liabilities associated with
(A) any taxable period during which Company, Vivendi Games, or
other members of the Company Group join with the Vivendi Group in
the filing of Vivendi Group Tax Returns or (B), in the case of
Vivendi Games, any taxable period commencing prior to the
combination of the businesses of the Company and Vivendi
Games.
NOW, THEREFORE, in consideration of the
foregoing premises and of the mutual covenants and agreements
contained herein, the parties agree as follows:
1.
Definitions . For purposes of this Agreement, the
terms set forth below shall be defined as follows:
(a)
“Adjusted Repatriation Amount” shall have the meaning
set forth in Section 8(d) hereof.
(b)
“Adjusted Repatriation Offset” shall have the meaning
set forth in Section 8(d) hereof.
(c)
“Adjusted Separate Return Tax Liability” shall have the
meaning set forth in Section 2.4(a) hereof.
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(d)
“Closing Date” shall mean July 9, 2008.
(e)
“Code” shall mean the Internal Revenue Code of 1986, as
amended.
(f)
“Company” shall mean Activision Blizzard, Inc., as
defined in the Preamble hereto and any predecessor or successor
corporation.
(g)
“Company Controlled Tax Issue” shall have the meaning
set forth in Section 6 hereof.
(h)
“Company Group” shall mean the Company and its
subsidiaries.
(i)
“Company Subgroup” shall mean, in the case of any
particular Determination Year, members of the Company Group that
join with the Vivendi Group in the filing of a Vivendi Group Tax
Return.
(j)
“Company Subgroup Related Tax Issue” shall have the
meaning set forth in Section 6 hereof.
(k)
“Company US Group” shall mean Company and all United
States persons, as defined in Section 7701(a)(3) of the
Code, directly and indirectly wholly-owned by Company.
(l)
“Determination Year” shall mean, for any particular
member of the Company Group that joins with the Vivendi Group in
the filing of a Vivendi Group Tax Return for any particular taxable
year, the taxable period beginning on or after the Effective Date
for such Company Group member and ending on the earlier of
(i) the last day of such taxable year or (ii) the
Termination Date for such Company Group member.
(m)
“Dividend” shall mean a distribution of cash or cash
equivalents that is a “dividend,” as defined in
Section 316 of the Code, and that is includible in the gross
income of the recipient for United States Federal income tax
purposes.
(n)
“Effective Date” shall mean the later of (A) the
date on which any member of the Company Group commences to be
includible in a Vivendi Group Tax Return and (B) the Closing
Date.
(o)
“Final Determination” shall mean a final
“determination” as defined under section 1313 of the
Code or under any similar provision for state or local Tax law
purposes.
(p)
“Group Tax Return” shall mean any consolidated,
unitary, or combined income or franchise Tax Return.
(q)
“Investor Agreement” shall mean that “Investor
Agreement” dated as of the date hereof among Vivendi S.A.,
VGAC LLC, Vivendi Games and Company.
(r)
“Non-Company Vivendi Group” shall mean all members of
the Vivendi Group other than the members of the Company
Group.
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(s)
“Non-US Subsidiary” shall mean a foreign corporation
for United States Federal income tax purposes that is directly or
indirectly wholly-owned by Vivendi Games on the Closing
Date.
(t)
“Non-US Subsidiary Cash” shall mean, with respect to a
Non-US Subsidiary, the cash and cash equivalents held by the
Non-US Subsidiary on the Closing Date.
(u)
“Post-Closing Earnings” shall mean, with respect to a
Non-US Subsidiary as of any particular date
upon
which such earnings are required to be determined
hereunder, an amount equal the aggregate current and
accumulated earnings and profits accumulated from the Closing Date
up to and including such date, without adjustment for any portion
of any distribution that qualifies as Repatriation Amount (or
Adjusted Repatriation Amount, as the case may be) hereunder.
(v)
“ Post- Termination
Taxable
Period” shall mean any taxable period
beginning on or after the Termination Date.
(w)
“ Pre- Termination
Taxable
Period” shall mean any taxable period
beginning before the Termination Date.
(x)
The “Repatriation Amount” attributable to a Dividend
shall mean, in respect of any Non-US Subsidiary, an amount equal to
the lesser of (i) the excess, if any, of (A) the amount
of such Dividend, over (B) the Post-Closing Earnings of such
Non-US subsidiary as determined on the date immediately preceding
the distribution date of such Dividend and (ii) the
Repatriation Balance as determined immediately prior to the payment
of such Dividend.
(y)
The “Repatriation Balance” shall mean, with
respect to a Non-US subsidiary as of any particular time when a
determination of a Repatriation Balance is required to be made
hereunder, the excess, if any, of (i) the Non-US Subsidiary
Cash associated with such Non-US Subsidiary over (ii) the sum
of (A) the aggregate Repatriation Amount (or Adjusted
Repatriation Amount, as the case may be) attributable to Dividends
made by such Non-US Subsidiary after the Closing Date and
immediately prior to such determination, (B) any amount paid
by the Non-US Subsidiary after the Closing Date to acquire an
equity interest in any entity, (C) the net aggregate amount
contributed by the Non-US Subsidiary after the Closing Date as
equity to any other entity, (D) the aggregate amount lent by
the Non-US Subsidiary to any other Non-US Subsidiary after the
Closing Date, and (E) any other amount invested by the Non-US
Subsidiary after the Closing Date that is an investment in a
capital asset or otherwise capitalizable for United States Federal
income tax purposes.
(z)
“Repatriation Cutoff” means the fifth (5th) anniversary
of the Closing Date.
(aa)
The “Repatriation Offset” attributable to a Dividend
shall mean an amount equal to fifty percent (50%) of the
Repatriation Tax attributable to such Dividend.
(bb)
The “Repatriation Tax” attributable to a Dividend shall
mean the excess, if any, of (i) the aggregate actual or
hypothetical (as the case may be) United States Federal income Tax
liability (net of any foreign tax credits associated with the
Repatriation Amount (or Adjusted
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Repatriation Amount, as the case may be)
attributable to such Dividend under sections 901, 902 or 903 of the
Code and allowable to the Company US Group, regardless of whether
such credits are actually claimed) of the Company US Group,
determined on an actual or pro forma basis as if Company were not
part of a consolidated group of which it is not the parent, over
(ii) the aggregate hypothetical United States Federal income
Tax liability, determined in the same manner as under clause (i),
that the Company US Group would have incurred if the Repatriation
Amount (or Adjusted Repatriation Amount, as the case may be)
attributable to the Dividend had not been distributed.
(cc)
“Resolution Accountant” shall have the meaning set
forth in Section 7 hereof.
(dd)
“Separate Return Tax Liability” shall mean, in the case
of any particular Determination Year, the hypothetical Federal,
state, local, or foreign income or franchise Tax liability, as the
case may be, of the Company Subgroup determined (i) on a pro
forma basis, in accordance with Section 2.3 hereof, as if such
Company Subgroup had filed their own Group Tax Return for such
year, (ii) taking into account the Tax Items for each previous
Determination Year in respect of which a Separate Return Tax
Liability was determined for such members, and, (iii) if
applicable, as adjusted pursuant to
Section 8(a) hereof.
(ee)
“Tax” or “Taxes” shall mean all federal,
state, local, foreign and value-added taxes, and other assessments
of a similar nature (whether imposed directly, through withholding,
or in the nature of a sales or value added tax), including any
interest, additions to Tax, or penalties applicable thereto,
imposed by any Tax Authority.
(ff)
“Tax Contest” shall mean any audit, assessment of Tax,
other examination by any Taxing Authority, or any proceeding or
appeal of such proceeding.
(gg)
“ Tax
Items ” shall mean any item of
income, gain, loss, deduction, expense, Tax credit, Tax basis,
capitalized cost, or any related carryover or carryback Tax Items
or other Tax attributes that may have the effect of increasing or
decreasing the determination of the Tax liability of a person for
any particular taxable period.
(hh)
“Tax Return” shall mean any return, report, or
information statement (including all exhibits and schedules
thereto), in respect of any Tax, that has been, or is required to
be, filed with a Taxing Authority.
(ii)
“Taxing Authority” shall mean any governmental
authority having jurisdiction over the imposition, determination,
assessment, or collection of any Tax.
(jj)
“Termination Event” shall mean, for any particular
member of the Company Group that has joined with the Vivendi Group
in the filing of a Vivendi Group Tax Return, any event pursuant to
which such member ceases to be includible in a Vivendi Group Tax
Return.
(kk)
“Termination Date” shall mean, for any particular
member of the Company Group that has joined with the Vivendi Group
in the filing of a Vivendi Group Tax Return, the date on which a
Termination Event occurs.
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(ll)
“Vivendi” shall mean Vivendi Holding I Corp., as
defined in the Preamble hereto and any predecessor or successor
corporation.
(mm)
“Vivendi Controlled Tax Issue” shall have the meaning
set forth in Section 6 hereof.
(nn)
“Vivendi Games” shall mean Vivendi Games, Inc., as
defined in the Preamble hereto and any predecessor or successor
corporation.
(oo)
“Vivendi Group” shall mean, for any particular taxable
year, Vivendi and any other corporation that has joined, or will
join, with Vivendi in the filing of a Vivendi Group Tax
Return.
(pp)
“Vivendi Group Tax Return” shall mean any Group Tax
Return of the Vivendi Group.
(qq)
“Vivendi Group Taxable Year” shall mean each taxable
year commencing after, or including, the Closing Date, in respect
of which (i) a Vivendi Group Tax Return is permitted or
required to be filed and (ii) such Vivendi Group Tax Return
includes one or more members of the Company Group.
2.
Vivendi Group Tax Returns .
2.1
Filing by Vivendi . For each taxable period during
which a member of the Company Group is eligible, or required, to
join with the Vivendi Group in the filing of a Vivendi Group Tax
Return, Company shall, and shall cause each relevant Company Group
member to, (A) consent to and join with the Vivendi Group in
the filing of any Vivendi Group Tax Return as Vivendi may elect or
be required to file, (B) become a party to this Agreement, and
(C) execute such documents and take such actions as Vivendi
may reasonably request in connection with such filing. For
each such Vivendi Group Taxable Year, Vivendi shall file the
Vivendi Group Tax Return on a timely basis.
2.2
Payment of Tax Liability . Company shall timely pay to
the appropriate Taxing Authority or discharge any Taxes required to
be paid by any member of the Company Group. For each Vivendi
Group Taxable Year, Vivendi shall timely pay or discharge, or cause
to be timely paid or discharged, the Tax liability of the Vivendi
Group for such taxable year to the extent such liability is not
required to be paid or discharged by Company pursuant to this
Section 2.2.
2.3
Separate Return Tax Liability . At least 60 days prior
to the due date (taking into account any applicable extensions) for
the filing of a Vivendi Group Tax Return in respect of which a
member of the Company Group is included in such filing, Company
shall furnish to Vivendi a written calculation in reasonable detail
setting forth the amount of the Separate Return Tax Liability for
the Company Subgroup, which calculation shall be subject to the
reasonable review and approval of Vivendi. In the case of
estimated payments of Tax, the Company Subgroup shall make a
reasonable estimate of the Separate Return Tax Liability (the
“Estimated Separate Tax Return Liability”) for the
Company Subgroup after good faith consultation with Vivendi and pay
such estimated amount to Vivendi at the time specified
in
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