Document:

Exhibit 10.2

    
      

      

    

     

     

     

     

     

     

     

     

     

     

     

    

     

    Q
      COMM INTERNATIONAL, INC.

     

    REGISTRATION
      RIGHTS AGREEMENT

     

     

    December
      19, 2005

    
       

       

       

       

       

       

       

       

       

       

       

      

        
 

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

     

     

    TABLE
      OF CONTENTS

    

     

      
        	 	 	
                Page

              
	 	 	 
	 	 	 
	
                Section
                  1

              	
                Definitions

              	
                1

              
	 	 	 	 
	 	
                1.1

              	
                Certain
                  Definitions

              	
                1

              
	 	 	 	 
	
                Section
                  2 

              	
                Registration
                  Rights

              	
                3

              
	 	 	 	 
	 	
                2.1

              	
                Company
                  Registration

              	
                3

              
	 	
                2.2

              	
                Registration
                  on Form S-3

              	
                4

              
	 	
                2.3

              	
                Expenses
                  of Registration

              	
                6

              
	 	
                2.4

              	
                Registration
                  Procedures

              	
                6

              
	 	
                2.5

              	
                Indemnification

              	
                7

              
	 	
                2.6

              	
                Information
                  by Holder

              	
                9

              
	 	
                2.7

              	
                Restrictions
                  on Transfer

              	
                9

              
	 	
                2.8

              	
                Rule
                  144 Reporting

              	
                11

              
	 	
                2.9

              	
                Delay
                  of Registration

              	
                11

              
	 	
                2.10

              	
                Transfer
                  or Assignment of Registration Rights

              	
                11

              
	 	
                2.11

              	
                Limitations
                  on Subsequent Registration Rights

              	
                11

              
	 	
                2.12

              	
                Termination
                  of Registration Rights

              	
                12

              
	 	 	 	 
	
                Section
                  3 

              	
                Miscellaneous

              	
                12

              
	 	 	 	 
	 	
                3.1

              	
                Amendment

              	
                12

              
	 	
                3.2

              	
                Notices

              	
                12

              
	 	
                3.3

              	
                Governing
                  Law

              	
                13

              
	 	
                3.4

              	
                Successors
                  and Assigns

              	
                13

              
	 	
                3.5

              	
                Entire
                  Agreement

              	
                13

              
	 	
                3.6

              	
                Delays
                  or Omissions

              	
                13

              
	 	
                3.7

              	
                Severability

              	
                13

              
	 	
                3.8

              	
                Titles
                  and Subtitles

              	
                13

              
	 	
                3.9

              	
                Counterparts

              	
                13

              
	 	
                3.10

              	
                Telecopy
                  Execution and Delivery

              	
                13

              
	 	
                3.11

              	
                Jurisdiction;
                  Venue

              	
                14

              
	 	
                3.12

              	
                Further
                  Assurances

              	
                14

              
	 	
                3.13

              	
                Attorneys’
                  Fees

              	
                14

              
	 	
                3.14

              	
                Aggregation

              	
                14

              
	 	
                3.15

              	
                Obligation
                  of Company

              	
                14

              

      

    

    

    

    

    

    
      
        
          
             

          

           

        

        
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    Q
      COMM INTERNATIONAL, INC.

     

    

    REGISTRATION
      RIGHTS AGREEMENT

     

     

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of December 19, 2005, by and among Q Comm
      International, Inc., a Utah corporation (the “Company”),
      and
      the persons and entities (each, an “Investor”
and
      collectively, the “Investors”)
      listed
      on Exhibit A
      hereto.
      Unless otherwise defined herein, capitalized terms used in this Agreement have
      the meanings ascribed to them in Section
      1.

     

    RECITALS

     

    Whereas
      the Company has sold Shares of the Company’s Common Stock to the Investors
      listed on Exhibit
      A
      hereto
      pursuant to the Purchase Agreements; and

     

    Whereas,
      in connection with the sale of these Shares, the Company desires to grant
      registration rights to the Investors, which will allow the Investors to resell
      the shares in the public market upon certain conditions;

     

    NOW,
      THEREFORE:
      In
      consideration of the mutual promises and covenants set forth herein, and other
      consideration, the receipt and adequacy of which is hereby acknowledged, the
      parties hereto agree as follows:

    Section
      1

    Definitions

     

    1.1    Certain
      Definitions.
      As used
      in this Agreement, the following terms shall have the meanings set forth
      below:

     

    (a)    “Commission”
shall
      mean the Securities and Exchange Commission or any other federal agency at
      the
      time administering the Securities Act.

     

    (b)    “Common
      Stock”
means
      the Common Stock of the Company.

     

    (c)    “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, or any similar successor
      federal statute and the rules and regulations thereunder, all as the same shall
      be in effect from time to time. 

     

    (d)    “Holder”
shall
      mean any Investor who holds Registrable Securities and any holder of Registrable
      Securities to whom the registration rights conferred by this Agreement have
      been
      duly and validly transferred in accordance with Section
      2.10
      of this
      Agreement.

     

    (e)    “Indemnified
      Party”
shall
      have the meaning set forth in Section 2.5(c)
      hereto.

     

    (f)    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 2.5(c)
      hereto.

     

    (g)    “Investors”
shall
      mean the persons and entities listed on Exhibit
      A
      hereto.

    

    
      
        
           

           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    (h)    “Purchase
      Agreements”
shall
      mean the Stock Purchase Agreements, dated the same date as this Agreement,
      that
      have been entered into severally between the Company and each of the
      Investors.

     

    (i)    “Registrable
      Securities”
shall
      mean (i) shares of Common Stock issued pursuant to the Purchase Agreements
      and (ii) any Common Stock issued as a dividend or other distribution with
      respect to or in exchange for or in replacement of the shares referenced in
      (i) above; provided,
      however,
      that
      Registrable Securities shall not include any shares of Common Stock described
      in
      clause (i) or (ii) above which have previously been registered or which have
      been sold to the public either pursuant to a registration statement or
      Rule 144, or which have been sold in a private transaction in which the
      transferor’s rights under this Agreement are not validly assigned in accordance
      with this Agreement.

     

    (j)    The
      terms
“register,”
      “registered”
and
      “registration”
shall
      refer to a registration effected by preparing and filing a registration
      statement in compliance with the Securities Act and the applicable rules and
      regulations thereunder, and the declaration or ordering of the effectiveness
      of
      such registration statement.

     

    (k)    “Registration
      Expenses”
shall
      mean all expenses incurred in effecting any registration pursuant to this
      Agreement, including, without limitation, all registration, qualification,
      and
      filing fees, printing expenses, escrow fees, blue sky fees and expenses, and
      expenses of any regular or special audits incident to or required by any such
      registration, but shall not include Selling Expenses and the compensation of
      regular employees of the Company.

     

    (l)    “Restricted
      Securities”
shall
      mean any Registrable Securities required to bear the legend set forth in
Section 2.7(c)
      hereof.

     

    (m)    “Rule 144”
shall
      mean Rule 144 as promulgated by the Commission under the Securities Act, as
      such Rule may be amended from time to time, or any similar successor rule that
      may be promulgated by the Commission.

     

    (n)    “Rule
      145”
shall
      mean Rule 145 as promulgated by the Commission under the Securities Act, as
      such Rule may be amended from time to time, or any similar successor rule that
      may be promulgated by the Commission

     

    (o)    “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended, or any similar successor federal
      statute and the rules and regulations thereunder, all as the same shall be
      in
      effect from time to time.

     

    (p)    “Selling
      Expenses”
shall
      mean all underwriting discounts, selling commissions, and stock transfer taxes
      applicable to the sale of Registrable Securities and fees and disbursements
      of
      counsel for any Holder.

     

    (q)    “Shares”
shall
      mean the shares
      of
      Common Stock held by the Investors.

    

    
      
        
           

           

        

        
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    Section 2

     

    Registration
      Rights

     

    2.1    Company
      Registration

     

    

     

    (a)    Company
      Registration.
      If the
      Company shall determine to register any of its securities either for its own
      account or the account of a security holder or holders, other than a
      registration pursuant to Section
      2.2
      herein,
      a registration relating solely to employee benefit plans, a registration
      relating to the offer and sale of debt securities, a registration relating
      to a
      corporate reorganization or other Rule 145 transaction, or a registration on
      any
      registration form that does not permit secondary sales, the Company
      will:

     

    (i)    promptly
      give written notice of the proposed registration to all Holders;
      and

     

    (ii)    use
      its
      reasonable best efforts to include in such registration (and any related
      qualification under blue sky laws or other compliance), except as set forth
      in
Section 2.1(b)
      below,
      and in any underwriting involved therein, all of such Registrable Securities
      as
      are specified in a written request or requests made by any Holder or Holders
      received by the Company within fifteen (15) days after such written notice
      from
      the Company is mailed or delivered. Such written request may specify all or
      a
      part of a Holder’s Registrable Securities for inclusion in such
      registration.

     

    (b)    Underwriting.
      If the
      registration of which the Company gives notice is for a registered public
      offering involving an underwriting, the Company shall so advise the Holders
      as a
      part of the written notice given pursuant to Section 2.1(a)(i).
      In such
      event, the right of any Holder to registration pursuant to this Section 2.1
      shall be
      conditioned upon such Holder’s participation in such underwriting and the
      inclusion of such Holder’s Registrable Securities in the underwriting to the
      extent provided herein. All Holders proposing to distribute their securities
      through such underwriting shall (together with the Company and the other holders
      of securities of the Company proposing to distribute their securities through
      such underwriting) enter into an underwriting agreement in customary form with
      the representative of the underwriter or underwriters selected by the
      Company.

     

    Notwithstanding
      any other provision of this Section 2.1,
      if the
      underwriters advise the Company in writing that marketing factors require a
      limitation on the number of shares to be underwritten, the underwriters may
      (subject to the limitations set forth below) limit the number of Registrable
      Securities to be included in the registration and underwriting. The Company
      shall so advise all holders of securities requesting registration, and the
      number of shares of securities that are entitled to be included in the
      registration and underwriting shall be allocated, as follows: (i) first, to
      the
      Company for securities being sold for its own account, (ii) second, to the
      Holders requesting to include Registrable Securities in such registration
      statement based on the pro
      rata
      percentage of Registrable Securities held by such Holders, (iii) third, to
      the
      other selling stockholders requesting to include other shares in such
      registration statement based on the pro rata percentage of other shares held
      by
      such other selling stockholders. If a person who has requested inclusion in
      such
      registration as provided above does not agree to the terms of any such
      underwriting, such person shall also be excluded therefrom by written notice
      from the Company or the underwriter. Any Registrable Securities or other
      securities excluded or withdrawn from such underwriting shall also be withdrawn
      from such registration. If shares are so withdrawn from the registration and
      if
      the number of shares of Registrable Securities to be included in such
      registration was previously reduced as a result of marketing factors pursuant
      to
Section
      2.1(b),
      the
      Company shall then offer to all persons who have retained the right to include
      securities in the registration the right to include additional securities in
      the
      registration in an aggregate amount equal to the number of shares so withdrawn,
      with such shares to be allocated among the persons requesting additional
      inclusion in the manner set forth above.

    

    
      
        
           

           

        

        
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    (c)    Right
      to Terminate Registration.
      The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under this Section 2.1
      prior to
      the effectiveness of such registration, whether or not any Holder has elected
      to
      include securities in such registration.

     

    2.2    Registration
      on Form S-3

     

    (a)    Request
      for Form S-3 Registration.
      The
      Company shall use its reasonable best efforts to qualify itself to register
      it
      securities on Form S-3 or any comparable or successor form or forms of the
      Commission. Subject to the conditions set forth in this Section 2.2,
      if the
      Company shall receive from a Holder or Holders of Registrable Securities a
      written request that the Company effect any registration on Form S-3 or any
      similar short form registration statement with respect to all or part of the
      Registrable Securities (with such request stating the number of shares of
      Registrable Securities to be disposed of and the intended methods of disposition
      of such shares by such Holder or Holders), the Company will: 

     

    (i)    promptly
      give written notice of the proposed registration to all other Holders;
      and

     

    (ii)    as
      soon
      as practicable, file and use its reasonable best efforts to effect such
      registration (including, without limitation, filing post-effective amendments,
      appropriate qualifications under applicable blue sky or other state securities
      laws, and appropriate compliance with the Securities Act) and to permit or
      facilitate the sale and distribution of all or such portion of such Registrable
      Securities as are specified in such request, together with all or such portion
      of the Registrable Securities of any Holder or Holders joining in such request
      as are specified in a written request received by the Company within twenty
      (20)
      days after such written notice from the Company is mailed or
      delivered.

     

    If,
      at
      the time the Holder(s) make a request for a registration on Form S-3 pursuant
      to
      this Section
      2.2, the
      Company does not qualify to use Form S-3 pursuant the qualification requirements
      of that form (or cannot reasonably be expected to so qualify within sixty (60)
      days of such request), then the Company shall be required to file a registration
      on Form S-1 or such other form of the Commission that would allow the Holders
      to
      sell the Registrable Securities in a registered offering. In such instance,
      all
      the provisions of this Section
      2.2 shall
      continue to apply to such alternative form of registration.

     

    (b)    Limitations
      on Form S-3 Registration.
      The
      Company shall not be obligated to effect, or take any action to effect, any
      such
      registration pursuant to this Section 2.2:
      

     

    (i)    Prior
      to
      one hundred and eighty (180) days from the date of this Agreement.

     

    (ii)    In
      any
      particular jurisdiction in which the Company would be required to execute a
      general consent to service of process in effecting such registration,
      qualification, or compliance, unless the Company is already subject to service
      in such jurisdiction and except as may be required by the Securities Act;

    

    
      
        
           

           

        

        
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    (iii)    If
      the
      Holders, together with the holders of any other securities of the Company
      entitled to inclusion in such registration, propose to sell Registrable
      Securities and such other securities (if any) on Form S-3 at an aggregate price
      to the public of less than Five Hundred Thousand Dollars ($500,000);
      or

     

    (iv)    If,
      in
      any twelve-month period, the Company has already effected two (2) such
      registrations in such period.

     

    (c)    Deferral.
      If
      (i) in the good faith judgment of the Board of Directors of the Company
      (the “Board”),
      the
      filing of a registration statement covering the Registrable Securities would
      be
      materially detrimental to the Company and the Board concludes, as a result,
      that
      it is in the best interests of the Company to defer the filing of such
      registration statement at such time, and (ii) the Company shall furnish to
      such Holders a certificate signed by the President of the Company, stating
      that,
      in the good faith judgment of the Board, it would be materially detrimental
      to
      the Company for such registration statement to be filed in the near future
      and
      that it is, therefore, in the best interests of the Company to defer the filing
      of such registration statement, then the Company shall have the right to defer
      such filing for a period of not more than ninety (90) days after receipt of
      the
      request of the Holder or Holders under this Section
      2.2;
      provided
      that the Company shall not defer its obligation in this manner more than once
      in
      any twelve-month period.

     

    (d)    Underwriting.
      If the
      Holder(s) intend to distribute the Registrable Securities covered by their
      request by means of an underwriting, they shall so advise the Company as a
      part
      of their request made pursuant to this Section 2.2
      and the
      Company shall include such information in the written notice given pursuant
      to
Section 2.2(a)(i).
      In such
      event, the right of any Holder to include all or any portion of its Registrable
      Securities in such registration pursuant to this Section 2.2
      shall be
      conditioned upon such Holder’s participation in such underwriting and the
      inclusion of such Holder’s Registrable Securities in such registration to the
      extent provided herein. The Company shall (together with all Holders and other
      persons proposing to distribute their securities through such underwriting)
      enter into an underwriting agreement in customary form with the representative
      of the underwriter or underwriters selected for such underwriting by such
      Holders that hold a majority in interest of the Registrable Securities to be
      registered in such registration, which underwriters are reasonably acceptable
      to
      the Company.

     

    Notwithstanding
      any other provision of this Section 2.2,
      if the
      underwriters advise the Initiating Holders in writing that marketing factors
      require a limitation on the number of shares to be underwritten, the number
      of
      Registrable Securities and other Shares that may be so included shall be
      allocated as follows: (i) first, among all Holders requesting to include
      Registrable Securities in such registration statement based on the pro rata
      percentage of Registrable Securities held by such Holders; (ii) second, to
      the
      Company, for its own account; and (iii) to other selling stockholders holding
      other Shares. 

     

    If
      a
      person who has requested inclusion in such registration as provided above does
      not agree to the terms of any such underwriting, such person shall be excluded
      therefrom by written notice from the Company, the underwriter, or the Holder(s).
      The Registrable Securities or other securities so excluded shall also be
      withdrawn from such registration. Any Registrable Securities or other securities
      excluded or withdrawn from such underwriting shall also be withdrawn from such
      registration. If Shares are so withdrawn from the registration and if the number
      of Shares to be included in such registration was previously reduced as a result
      of marketing factors pursuant to this Section 2.2(d),
      then
      the Company shall then offer to all Holders who have retained rights to include
      securities in the registration the right to include additional Registrable
      Securities in the registration in an aggregate amount equal to the number of
      shares so withdrawn, with such shares to be allocated among such Holders
      requesting additional inclusion, as set forth above.

    

    
      
        
           

           

        

        
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    2.3    Expenses
      of Registration.
      All
      Registration Expenses incurred in connection with registrations pursuant to
      Sections 2.1
      and 2.2 hereof
      shall be borne by the Company; provided,
      however,
      that
      the Company shall not be required to pay for any expenses of any registration
      proceeding begun pursuant to Section
      2.2
      if the
      registration request is subsequently withdrawn at the request of the Holders
      of
      a majority of the Registrable Securities to be registered or because a
      sufficient number of Holders shall have withdrawn so that the minimum offering
      conditions set forth in Section
      2.2
      are no
      longer satisfied (in which case all participating Holders shall bear such
      expenses pro
      rata
      among
      each other based on the number of Registrable Securities requested to be so
      registered). All Selling Expenses relating to securities registered on behalf
      of
      the Holders shall be borne by the holders of securities included in such
      registration pro rata among each other on the basis of the number of Registrable
      Securities so registered.

     

    2.4    Registration
      Procedures.
      In
      the
      case of each registration effected by the Company pursuant to Section 2,
      the
      Company will keep each Holder advised in writing as to the initiation of each
      registration and as to the completion thereof. At its expense, the Company
      will
      use its reasonable best efforts to and as expeditiously as
      possible:

     

    (a)    Keep
      such
      registration effective for a period ending on the earlier of the date which
      is
      one hundred twenty (120) days from the effective date of the registration
      statement or such time as the Holder or Holders have completed the distribution
      described in the registration statement relating thereto; provided,
      however,
      that
      (i) such 120-day period shall be extended for a period of time equal to the
      period the Holder refrains from selling any securities included in such
      registration at the request of an underwriter of Common Stock (or other
      securities) of the Company; and (ii) in the case of any registration of
      Registrable Securities on Form S-3 which are intended to be offered on a
      continuous or delayed basis, subject to compliance with applicable SEC rules,
      such 120-day period shall be extended for up to 90 days, if necessary, to keep
      the registration statement effective until all such Registrable Securities
      are
      sold.

     

    (b)    Prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection with such
      registration statement as may be necessary to comply with the provisions of
      the
      Securities Act with respect to the disposition of all securities covered by
      such
      registration statement for the period set forth in subsection (a)
      above;

     

    (c)    Furnish
      such number of prospectuses, including any preliminary prospectuses, and other
      documents incident thereto, including any amendment of or supplement to the
      prospectus, as a Holder from time to time may reasonably request; 

     

    (d)    Register
      and qualify the securities covered by such registration statement under such
      other securities or Blue Sky laws of such jurisdiction as shall be reasonably
      requested by the Holders; provided,
      that
      the Company shall not be required in connection therewith or as a condition
      thereto to qualify to do business or to file a general consent to service of
      process in any such states or jurisdictions. 

    

    
      
        
           

           

        

        
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    (e)    Notify
      each seller of Registrable Securities covered by such registration statement
      at
      any time when a prospectus relating thereto is required to be delivered under
      the Securities Act of the happening of any event as a result of which the
      prospectus included in such registration statement, as then in effect, includes
      an untrue statement of a material fact or omits to state a material fact
      required to be stated therein or necessary to make the statements therein not
      misleading or incomplete in light of the circumstances then existing, and
      following such notification promptly prepare and furnish to such seller a
      reasonable number of copies of a supplement to or an amendment of such
      prospectus as may be necessary so that, as thereafter delivered to the
      purchasers of such shares, such prospectus shall not include an untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading or incomplete
      in light of the circumstances then existing;

     

    (f)    Furnish,
      on the date that such Registrable Securities are delivered to the underwriters
      for sale, if such securities are being sold through underwriters, (i) an
      opinion, dated as of such date, of the counsel representing the Company for
      the
      purposes of such registration, in form and substance as is customarily given
      to
      underwriters in an underwritten public offering, addressed to the underwriters,
      if any, and reasonably satisfactory to a majority in interest of the Holders
      requesting registration of Registrable Securities and (ii) a “comfort”
letter dated as of such date, from the independent certified public accountants
      of the Company, in form and substance as is customarily given by independent
      certified public accountants to underwriters in an underwritten public offering,
      addressed to the underwriters.

     

    (g)    Provide
      a
      transfer agent and registrar for all Registrable Securities registered pursuant
      to such registration statement and a CUSIP number for all such Registrable
      Securities, in each case not later than the effective date of such
      registration;

     

    (h)    Otherwise
      comply with all applicable rules and regulations of the Commission, and make
      available to its security holders, as soon as reasonably practicable, an
      earnings statement covering the period of at least twelve months, but not more
      than eighteen months, beginning with the first month after the effective date
      of
      the Registration Statement, which earnings statement shall satisfy the
      provisions of Section 11(a) of the Securities Act;

     

    (i)    Cause
      all
      such Registrable Securities registered pursuant hereunder to be listed on each
      securities exchange on which similar securities issued by the Company are then
      listed; and

     

    (j)    In
      connection with any underwritten offering pursuant to a registration statement
      filed pursuant to Section 2.2
      hereof,
      enter into an underwriting agreement in form reasonably necessary to effect
      the
      offer and sale of Common Stock, provided such underwriting agreement contains
      reasonable and customary provisions.

     

    2.5    Indemnification

     

    . 
      

    

    
      
        
           

           

        

        
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    (a)    To
      the
      extent permitted by law, the Company will indemnify and hold harmless each
      Holder, each of its officers, directors and partners, legal counsel, and
      accountants and each person controlling such Holder within the meaning of
      Section 15 of the Securities Act, with respect to which registration,
      qualification, or compliance has been effected pursuant to this Section 2,
      and
      each underwriter, if any, and each person who controls within the meaning of
      Section 15 of the Securities Act any underwriter, against all expenses,
      claims, losses, damages, and liabilities (or actions, proceedings, or
      settlements in respect thereof) arising out of or based on: (i) any untrue
      statement (or alleged untrue statement) of a material fact contained or
      incorporated by reference in any prospectus, offering circular, or other
      document (including any related registration statement, notification, or the
      like) incident to any such registration, qualification, or compliance,
      (ii) any omission (or alleged omission) to state therein a material fact
      required to be stated therein or necessary to make the statements therein not
      misleading, or (iii) any violation (or alleged violation) by the Company of
      the Securities Act, any state securities laws or any rule or regulation
      thereunder applicable to the Company and relating to action or inaction required
      of the Company in connection with any offering covered by such registration,
      qualification, or compliance, and the Company will reimburse each such Holder,
      each of its officers, directors, partners, legal counsel, and accountants and
      each person controlling such Holder, each such underwriter, and each person
      who
      controls any such underwriter, for any legal and any other expenses reasonably
      incurred in connection with investigating and defending or settling any such
      claim, loss, damage, liability, or action; provided
      that the
      Company will not be liable in any such case to the extent that any such claim,
      loss, damage, liability, or action arises out of or is based on any untrue
      statement or omission based upon written information furnished to the Company
      by
      such Holder, any of such Holder’s officers, directors, partners, legal counsel
      or accountants, any person controlling such Holder, such underwriter or any
      person who controls any such underwriter and stated to be specifically for
      use
      therein; and provided,
      further
      that,
      the indemnity agreement contained in this Section 2.5(a)
      shall
      not apply to amounts paid in settlement of any such loss, claim, damage,
      liability, or action if such settlement is effected without the consent of
      the
      Company (which consent shall not be unreasonably withheld).

     

    (b)    To
      the
      extent permitted by law, each Holder will, if Registrable Securities held by
      such Holder are included in the securities as to which such registration,
      qualification, or compliance is being effected, indemnify and hold harmless
      the
      Company, each of its directors, officers, partners, legal counsel, and
      accountants and each underwriter, if any, of the Company’s securities covered by
      such a registration statement, each person who controls the Company or such
      underwriter within the meaning of Section 15 of the Securities Act, each
      other such Holder, and each of their officers, directors, and partners, and
      each
      person controlling such Holder, against all claims, losses, damages and
      liabilities (or actions in respect thereof) arising out of or based on:
      (i) any untrue statement (or alleged untrue statement) of a material fact
      contained or incorporated by reference in any such registration statement,
      prospectus, offering circular, or other document, or (ii) any omission (or
      alleged omission) to state therein a material fact required to be stated therein
      or necessary to make the statements therein not misleading, and will reimburse
      the Company and such Holders, directors, officers, partners, legal counsel,
      and
      accountants, persons, underwriters, or control persons for any legal or any
      other expenses reasonably incurred in connection with investigating or defending
      any such claim, loss, damage, liability, or action, in each case to the extent,
      but only to the extent, that such untrue statement (or alleged untrue statement)
      or omission (or alleged omission) is made in such registration statement,
      prospectus, offering circular, or other document in reliance upon and in
      conformity with written information furnished to the Company by such Holder
      and
      stated to be specifically for use therein; provided,
      however,
      that
      the obligations of such Holder hereunder shall not apply to amounts paid in
      settlement of any such claims, losses, damages, or liabilities (or actions
      in
      respect thereof) if such settlement is effected without the consent of such
      Holder (which consent shall not be unreasonably withheld); and provided
      that in
      no event shall any indemnity under this Section 2.5
      exceed
      the net proceeds from the offering received by such Holder.

    

    
      
        
           

           

        

        
          8

          
            

          

        

        
           

        

      

    

     

     

    (c)    Each
      party entitled to indemnification under this Section 2.5
      (the
“Indemnified Party”)
      shall
      give notice to the party required to provide indemnification (the “Indemnifying Party”)
      promptly after such Indemnified Party has actual knowledge of any claim as
      to
      which indemnity may be sought, and shall permit the Indemnifying Party to assume
      the defense of such claim or any litigation resulting therefrom; provided
      that
      counsel for the Indemnifying Party, who shall conduct the defense of such claim
      or any litigation resulting therefrom, shall be approved by the Indemnified
      Party (whose approval shall not be unreasonably withheld), and the Indemnified
      Party may participate in such defense at such party’s expense; and provided further
      that the
      failure of any Indemnified Party to give notice as provided herein shall not
      relieve the Indemnifying Party of its obligations under this Section 2.5,
      to the
      extent such failure is not prejudicial. No Indemnifying Party, in the defense
      of
      any such claim or litigation, shall, except with the consent of each Indemnified
      Party, consent to entry of any judgment or enter into any settlement that does
      not include as an unconditional term thereof the giving by the claimant or
      plaintiff to such Indemnified Party of a release from all liability in respect
      to such claim or litigation. Each Indemnified Party shall furnish such
      information regarding itself or the claim in question as an Indemnifying Party
      may reasonably request in writing and as shall be reasonably required in
      connection with defense of such claim and litigation resulting
      therefrom.

     

    (d)    If
      the
      indemnification provided for in this Section 2.5
      is held
      by a court of competent jurisdiction to be unavailable to an Indemnified Party
      with respect to any loss, liability, claim, damage, or expense referred to
      herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
      Party hereunder, shall contribute to the amount paid or payable by such
      Indemnified Party as a result of such loss, liability, claim, damage, or expense
      in such proportion as is appropriate to reflect the relative fault of the
      Indemnifying Party on the one hand and of the Indemnified Party on the other
      in
      connection with the statements or omissions that resulted in such loss,
      liability, claim, damage, or expense as well as any other relevant equitable
      considerations. The relative fault of the Indemnifying Party and of the
      Indemnified Party shall be determined by reference to, among other things,
      whether the untrue or alleged untrue statement of a material fact or the
      omission to state a material fact relates to information supplied by the
      Indemnifying Party or by the Indemnified Party and the parties’ relative intent,
      knowledge, access to information, and opportunity to correct or prevent such
      statement or omission.

     

    (e)    Notwithstanding
      the foregoing, to the extent that the provisions on indemnification and
      contribution contained in the underwriting agreement entered into in connection
      with the underwritten public offering are in conflict with the foregoing
      provisions, the provisions in the underwriting agreement shall
      control.

     

    2.6    Information
      by Holder.
      Each
      Holder of Registrable Securities shall furnish to the Company such information
      regarding such Holder and the distribution proposed by such Holder as the
      Company may reasonably request in writing and as shall be reasonably required
      in
      connection with any registration, qualification, or compliance referred to
      in
      this Section 2.

     

    2.7    Restrictions
      on Transfer

     

    (a)    The
      holder of each certificate representing Registrable Securities by acceptance
      thereof agrees to comply in all respects with the provisions of this
Section 2.7.
      Each
      Holder agrees not to make any sale, assignment, transfer, pledge or other
      disposition of all or any portion of the Restricted Securities, or any
      beneficial interest therein, unless and until the transferee thereof has agreed
      in writing for the benefit of the Company to take and hold such Restricted
      Securities subject to, and to be bound by, the terms and conditions set forth
      in
      this Agreement, including, without limitation, this Section 2.7,
      except
      for transfers permitted under Section 2.8(b):

    

    
      
        
           

           

        

        
          9

          
            

          

        

        
           

        

      

    

     

     

    (i)    There
      is
      then in effect a registration statement under the Securities Act covering such
      proposed disposition and such disposition is made in accordance with such
      registration statement; or

     

    (ii)    Such
      Holder shall have given prior written notice to the Company of such Holder’s
      intention to make such disposition and shall have furnished the Company with
      a
      detailed description of the manner and circumstances of the proposed
      disposition, and, if requested by the Company, such Holder shall have furnished
      the Company, at its expense, with (i) an opinion of counsel, reasonably
      satisfactory to the Company, to the effect that such disposition will not
      require registration of such Restricted Securities under the Securities Act
      or
      (ii) a “no action” letter from the Commission to the effect that the
      transfer of such securities without registration will not result in a
      recommendation by the staff of the Commission that action be taken with respect
      thereto, whereupon the holder of such Restricted Securities shall be entitled
      to
      transfer such Restricted Securities in accordance with the terms of the notice
      delivered by the Holder to the Company. It is agreed that the Company will
      not
      require opinions of counsel for transactions made pursuant to Rule 144
      except in unusual circumstances.

     

    (b)    Permitted
      transfers include (i) a transfer not involving a change in beneficial
      ownership, or (ii) in transactions involving the distribution without
      consideration of Restricted Securities by any Holder to (x) a parent, subsidiary
      or other affiliate of Holder, or (y) any of its partners, members or other
      equity owners, or retired partners, retired members or other equity owners,
      or
      to the estate of any of its partners, members or other equity owners or retired
      partners, retired members or other equity owners, or (iii) transfers in
      compliance with Rule 144(k), as long as the Company is furnished with
      satisfactory evidence of compliance with such Rule; provided,
      in each
      case, that the Holder thereof shall give written notice to the Company of such
      Holder’s intention to effect such disposition and shall have furnished the
      Company with a detailed description of the manner and circumstances of the
      proposed disposition.

     

    (c)    Each
      certificate representing Registrable Securities shall (unless otherwise
      permitted by the provisions of this Agreement) be stamped or otherwise imprinted
      with a legend substantially similar to the following (in addition to any legend
      required under applicable state securities laws):

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES.
      THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
      OR
      HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES
      LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE
      SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
      SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH
      THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

     

     

    
 

    
      
        
           

           

        

        
          10

          
            

          

        

        
           

        

      

    

     

     

    The
      Holders consent to the Company making a notation on its records and giving
      instructions to any transfer agent of the Restricted Securities in order to
      implement the restrictions on transfer established in this Section 2.7.

     

    (d)    The
      legend referring to federal and state securities laws identified in Section 2.7(c)
      hereof
      stamped on a certificate evidencing the Restricted Securities and the stock
      transfer instructions and record notations with respect to such Restricted
      Securities shall be removed and the Company shall issue a certificate without
      such legend to the holder of such Restricted Securities if (i) such
      securities are registered under the Securities Act, or (ii) such holder
      provides the Company with an opinion of counsel reasonably acceptable to the
      Company to the effect that a public sale or transfer of such securities may
      be
      made without registration under the Securities Act, or (iii) such holder
      provides the Company with reasonable assurances, that such securities can be
      sold pursuant to Section (k) of Rule 144 under the Securities
      Act.

     

    2.8    Rule 144
      Reporting.
      With
      a
      view to making available the benefits of certain rules and regulations of the
      Commission that may permit the sale of the Restricted Securities to the public
      without registration, the Company agrees to use its reasonable best efforts
      to:

     

    (a)    Make
      and
      keep public information regarding the Company available as those terms are
      understood and defined in Rule 144 under the Securities Act; 

     

    (b)    File
      with
      the Commission in a timely manner all reports and other documents required
      of
      the Company under the Securities Act and the Exchange Act at any time after
      it
      has become subject to such reporting requirements; and

     

    (c)    So
      long
      as a Holder owns any Restricted Securities, furnish to the Holder forthwith
      upon
      written request a written statement by the Company as to its compliance with
      the
      reporting requirements of Rule 144 and of the Securities Act and the
      Exchange Act, a copy of the most recent annual or quarterly report of the
      Company, and such other reports and documents so filed as a Holder may
      reasonably request in availing itself of any rule or regulation of the
      Commission allowing a Holder to sell any such securities without
      registration.

     

    2.9    Delay
      of Registration.
      No
      Holder
      shall have any right to take any action to restrain, enjoin, or otherwise delay
      any registration as the result of any controversy that might arise with respect
      to the interpretation or implementation of this Agreement.

     

    2.10    Transfer
      or Assignment of Registration Rights.
      The
      rights to cause the Company to register securities granted to a Holder by the
      Company under this Agreement may be transferred or assigned by a Holder only
      to
      a transferee, assignee or holder of not less than 40,000 shares of Registrable
      Securities (as presently constituted and subject to subsequent adjustments
      for
      stock splits, stock dividends, reverse stock splits, and the like); provided
      that
      (i) such transfer or assignment of Registrable Securities is effected in
      accordance with the terms of Section 2.7
      hereof
      and applicable securities laws and (ii) the transferee or assignee of such
      rights assumes in writing the obligations of such Holder under this
      Agreement.

     

    2.11    Limitations
      on Subsequent Registration Rights.
      From
      and
      after the date of this Agreement, the Company shall not, without the prior
      written consent of a the holders holding at least a majority of the Registrable
      Securities, enter into any agreement with any holder or prospective holder
      of
      any securities of the Company giving such holder or prospective holder any
      registration rights the terms of which are pari
      passu
      with or
      senior to the registration rights granted to the Holders hereunder.

    

    
      
        
           

           

        

        
          11

          
            

          

        

        
           

        

      

    

    

     

    2.12    Termination
      of Registration Rights.
      The
      right
      of any Holder to request registration or inclusion in any registration pursuant
      to this Agreement shall terminate on the earlier of: (i) the date on which
      all
      shares of Registrable Securities held any Holder that holds less than 1% of
      the
      outstanding capital stock of the Company may immediately be sold under
      Rule 144 during any ninety (90)-day period, or (ii) five (5) years
      after the date of this Agreement.

     

    

    Section
      3

    Miscellaneous

     

    3.1    Amendment.
      Except
      as
      expressly provided herein, neither this Agreement nor any term hereof may be
      amended, waived, discharged or terminated other than by a written instrument
      referencing this Agreement and signed by (i) the Company and (ii) the Investors
      holding at least a majority of the Registrable Securities then held by the
      Investors. Any such amendment, waiver, discharge or termination effected in
      accordance with this paragraph shall be binding upon each Investor.

     

    3.2    Notices.
      All
      notices and other communications required or permitted hereunder shall be in
      writing and shall be mailed by registered or certified mail, postage prepaid,
      sent by facsimile or electronic mail or otherwise delivered by hand or by
      messenger addressed:

     

    (a)    if
      to an
      Investor, at the Investor’s address, facsimile number or electronic mail address
      as shown in the Company’s records, as may be updated in accordance with the
      provisions hereof;

     

    (b)    if
      to any
      Holder, at such address, facsimile number or electronic mail address as shown
      in
      the Company’s records, or, until any such holder so furnishes an address,
      facsimile number or electronic mail address to the Company, then to and at
      the
      address of the last holder of such shares for which the Company has contact
      information in its records; or

     

    (c)    if
      to the
      Company, one copy should be sent to Q Comm International, Inc., 510 East
      Technology Avenue, Building C, Orem, Utah 84097; Telephone: (801) 226-4222;
      Facsimile: (801) 222-9555; Attn: Chief Executive Officer, or at such other
      address as the Company shall have furnished to the Investors, with a copy to
      Jones Waldo Holbrook McDonough, PC, 170 South Main Street, Suite 1500, Salt
      Lake
      City Utah, 84101; Attn: Ronald S. Poelman.

     

    Each
      such
      notice or other communication shall for all purposes of this Agreement be
      treated as effective or having been given when delivered if delivered
      personally, or, if sent by mail, at the earlier of its receipt or 48 hours
      after
      the same has been deposited in a regularly maintained receptacle for the deposit
      of the United States mail, addressed and mailed as aforesaid or, if sent by
      facsimile, upon confirmation of facsimile transfer or, if sent by electronic
      mail, upon confirmation of delivery when directed to the electronic mail address
      set forth on the Schedule of Investors.

    

    
      
        
           

           

        

        
          12

          
            

          

        

        
           

        

      

    

    

     

    3.3    Governing
      Law.
      This
      Agreement shall be governed in all respects by the internal laws of the State
      of
      Utah as applied to agreements entered into among Utah residents to be performed
      entirely within Utah, without regard to principles of conflicts of
      law.

     

    3.4    Successors
      and Assigns.
      This
      Agreement, and any and all rights, duties and obligations hereunder, shall
      not
      be assigned, transferred, delegated or sublicensed by any Investor without
      the
      prior written consent of the Company. Any attempt by an Investor without such
      permission to assign, transfer, delegate or sublicense any rights, duties or
      obligations that arise under this Agreement shall be void. Subject to the
      foregoing and except as otherwise provided herein, the provisions of this
      Agreement shall inure to the benefit of, and be binding upon, the successors,
      assigns, heirs, executors and administrators of the parties hereto.

     

    3.5    Entire
      Agreement.
      This
      Agreement and the exhibits hereto constitute the full and entire understanding
      and agreement between the parties with regard to the subject hereof and
      supercedes all prior understandings or agreements with regard to the subject
      matter hereof.

     

    3.6    Delays
      or Omissions.
      Except
      as expressly provided herein, no delay or omission to exercise any right, power
      or remedy accruing to any party to this Agreement upon any breach or default
      of
      any other party under this Agreement shall impair any such right, power or
      remedy of such non-defaulting party, nor shall it be construed to be a waiver
      of
      any such breach or default, or an acquiescence therein, or of or in any similar
      breach or default thereafter occurring, nor shall any waiver of any single
      breach or default be deemed a waiver of any other breach or default theretofore
      or thereafter occurring. Any waiver, permit, consent or approval of any kind
      or
      character on the part of any party of any breach or default under this
      Agreement, or any waiver on the part of any party of any provisions or
      conditions of this Agreement, must be in writing and shall be effective only
      to
      the extent specifically set forth in such writing. All remedies, either under
      this Agreement or by law or otherwise afforded to any party to this Agreement,
      shall be cumulative and not alternative.

     

    3.7    Severability.
      If any
      provision of this Agreement becomes or is declared by a court of competent
      jurisdiction to be illegal, unenforceable or void, portions of such provision,
      or such provision in its entirety, to the extent necessary, shall be severed
      from this Agreement, and such court will replace such illegal, void or
      unenforceable provision of this Agreement with a valid and enforceable provision
      that will achieve, to the extent possible, the same economic, business and
      other
      purposes of the illegal, void or unenforceable provision. The balance of this
      Agreement shall be enforceable in accordance with its terms.

     

    3.8    Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this Agreement. All
      references in this Agreement to sections, paragraphs and exhibits shall, unless
      otherwise provided, refer to sections and paragraphs hereof and exhibits
      attached hereto.

     

    3.9    Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      enforceable against the parties that execute such counterparts, and all of
      which
      together shall constitute one instrument.

    

    
      
        
           

           

        

        
          13

          
            

          

        

        
           

        

      

    

     

     

    3.10    Telecopy
      Execution and Delivery.
      A
      facsimile, telecopy or other reproduction of this Agreement may be executed
      by
      one or more parties hereto and delivered by such party by facsimile or any
      similar electronic transmission device pursuant to which the signature of or
      on
      behalf of such party can be seen. Such execution and delivery shall be
      considered valid, binding and effective for all purposes. At the request of
      any
      party hereto, all parties hereto agree to execute and deliver an original of
      this Agreement as well as any facsimile, telecopy or other reproduction
      hereof.

     

    3.11    Jurisdiction;
      Venue.
      With
      respect to any disputes arising out of or related to this Agreement, the parties
      consent to the exclusive jurisdiction of, and venue in, the state courts in
      Salt
      Lake County in the State of Utah (or in the event of exclusive federal
      jurisdiction, the courts of the Northern District of Utah).

     

    3.12    Further
      Assurances.
      Each
      party hereto agrees to execute and deliver, by the proper exercise of its
      corporate, limited liability company, partnership or other powers, all such
      other and additional instruments and documents and do all such other acts and
      things as may be necessary to more fully effectuate this Agreement.

     

    3.13    Attorneys’
      Fees.
      In the
      event that any suit or action is instituted to enforce any provision in this
      Agreement, the prevailing party in such dispute shall be entitled to recover
      from the losing party all fees, costs and expenses of enforcing any right of
      such prevailing party under or with respect to this Agreement, including without
      limitation, such reasonable fees and expenses of attorneys and accountants,
      which shall include, without limitation, all fees, costs and expenses of
      appeals.

     

    3.14    Aggregation.
      All
      shares of Common Stock held or acquired by affiliated entities or persons of
      an
      Investor (including but not limited to: (i) a constituent partner or a
      retired partner of an Investor that is a partnership; (ii) a parent,
      subsidiary or other affiliate of an Investor that is a corporation;
      (iii) an immediate family member living in the same household, a
      descendant, or a trust therefore, in the case of an Investor who is an
      individual; or (iv) a member of an Investor that is a limited liability
      company) shall be aggregated together for the purpose of determining the
      availability of any rights under this Agreement which are triggered by the
      beneficial ownership of a threshold number of shares of the Company’s capital
      stock.

     

    3.15    Obligation
      of Company.
      The
      Company agrees to use its reasonable best efforts to enforce the terms of this
      Agreement, to inform the Investors of any breach hereof (to the extent the
      Company has knowledge thereof) and to assist the Investors in the exercise
      of
      their rights and the performance of their obligations hereunder.

     

    

     

    [Remainder
      of page intentionally left blank.]

    

    
      
        
           

           

        

        
          14

          
            

          

        

        
           

        

      

    

     

     

     

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Amended and Registration
      Rights Agreement effective as of the day and year first above
      written.

     

    

    
      	 	
               

              Q
                COMM INTERNATIONAL, INC.

            
	 	
               

              By:
                _____________________________________

            
	 	
              Name:
                Mark Robinson

            
	 	 
	 	
              Title:
                Chief Financial Officer

            
	
               

              If
                Investor is an individual

            	
               

              ________________________________________

            
	 	
              (Signature)

            
	 	 
	 	
              
                ________________________________________

              

            
	 	
              (Name
                of Investor)

            
	 	 
	 	 
	
              If
                Investor is an entity:

            	
              
                ________________________________________

              

            
	 	
              (Name
                of Investor)

            
	 	 
	 	 
	 	
              By:
                _____________________________________
                

            
	 	
              (Signature
                of Authorized Representative)

            
	 	 
	 	 
	 	
              
                
                  ________________________________________

                

              

            
	 	
              (Name
                of Authorized Representative)

            
	 	 
	 	 
	 	
              
                ________________________________________

              

            
	 	
              (Title
                of Authorized Representative)

            

    

    

    

    

    
      
        
          
            

          

           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    EXHIBIT A

     

    INVESTORS

     

    Pike
      Capital Partners, L.P.

     

    Jurika
      Family TrustExhibit 10.1

 

Execution Version

 

SEPARATION AGREEMENT

BY AND BETWEEN

VIACOM INC.

AND

NEW VIACOM CORP.

 

 

Dated as of December 19, 2005

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
  2

  
	
  Section 1.01

  	
  Certain Defined Terms

  	
  2

  
	
   

  	
   

  
	
  ARTICLE II THE SEPARATION

  	
  26

  
	
  Section 2.01

  	
  Transfer of Assets

  	
  26

  
	
  Section 2.02

  	
  Assumption of Liabilities

  	
  26

  
	
  Section 2.03

  	
  Mixed Contracts

  	
  27

  
	
  Section 2.04

  	
  Intercompany Accounts

  	
  28

  
	
  Section 2.05

  	
  Substitution of Obligors

  	
  28

  
	
  Section 2.06

  	
  Transfer Documents

  	
  33

  
	
  Section 2.07

  	
  Ancillary Agreements

  	
  34

  
	
  Section 2.08

  	
  Special Dividend

  	
  35

  
	
  Section 2.09

  	
  Conduct of Business
  Following the Separation

  	
  37

  
	
  Section 2.10

  	
  Disclaimer of
  Representations and Warranties

  	
  38

  
	
  Section 2.11

  	
  Deferred Transfers

  	
  39

  
	
  Section 2.12

  	
  Transfers of Assets or
  Liabilities Following the Separation

  	
  40

  
	
  Section 2.13

  	
  Corporate Names;
  Trademarks

  	
  41

  
	
  Section 2.14

  	
  Office of the Chairman

  	
  41

  
	
   

  	
   

  
	
  ARTICLE III
  CONFIDENTIALITY; EXCHANGE OF INFORMATION

  	
  42

  
	
  Section 3.01

  	
  Ownership of Information

  	
  42

  
	
  Section 3.02

  	
  Restrictions on Disclosure
  of Information

  	
  42

  
	
  Section 3.03

  	
  Disclosure of Information

  	
  43

  
	
  Section 3.04

  	
  Access to Information

  	
  43

  
	
  Section 3.05

  	
  Record Retention

  	
  44

  
	
  Section 3.06

  	
  Information Relating to
  Certain Taxes

  	
  45

  
	
  Section 3.07

  	
  Witness Services

  	
  45

  
	
  Section 3.08

  	
  Privileged Matters

  	
  45

  
	
   

  	
   

  
	
  ARTICLE IV FINANCIAL AND OTHER INFORMATION

  	
  48

  
	
  Section 4.01

  	
  Financial and Other
  Information

  	
  48

  
	
  Section 4.02

  	
  Sarbanes-Oxley Section 404
  Compliance

  	
  52

  
	
   

  	
   

  
	
  ARTICLE V INSURANCE

  	
  52

  
	
  Section 5.01

  	
  Insurance Matters

  	
  52

  
	
  Section 5.02

  	
  Captive Insurance and
  Reinsurance Companies

  	
  59

  
	
  Section 5.03

  	
  Claims Made Policies

  	
  59

  
	
  Section 5.04

  	
  Miscellaneous

  	
  60

  
	
   

  	
   

  
	
  ARTICLE VI EMPLOYEE MATTERS

  	
  61

  
	
  Section 6.01

  	
  Defined Benefit Pension
  Plans

  	
  61

  
	
  Section 6.02

  	
  401(k) Plans

  	
  66

  
	
  Section 6.03

  	
  Executive Benefit Plans

  	
  68

  
	
  Section 6.04

  	
  Welfare Plans

  	
  69

  
	
  Section 6.05

  	
  Employment Agreements

  	
  74

  

 

i

 

	
  Section 6.06

  	
  Non-U.S. Benefit Plans

  	
  75

  
	
  Section 6.07

  	
  Equity-Based Plans

  	
  75

  
	
  Section 6.08

  	
  Employee Benefit Plan
  Participation

  	
  75

  
	
  Section 6.09

  	
  Fees, Rebates and
  Performance Guarantees

  	
  76

  
	
  Section 6.10

  	
  General and Administrative

  	
  76

  
	
  Section 6.11

  	
  Viacom Plus

  	
  77

  
	
   

  	
   

  
	
  ARTICLE VII INTELLECTUAL PROPERTY MATTERS

  	
  77

  
	
  Section 7.01

  	
  Intellectual Property
  Matters

  	
  77

  
	
   

  	
   

  
	
  ARTICLE VIII LEGAL MATTERS

  	
  78

  
	
  Section 8.01

  	
  Control of Legal Matters

  	
  78

  
	
  Section 8.02

  	
  Claims Against Third
  Parties

  	
  79

  
	
  Section 8.03

  	
  Retention of Counsel

  	
  79

  
	
  Section 8.04

  	
  Notice to Third Parties;
  Service of Process; Cooperation

  	
  80

  
	
  Section 8.05

  	
  Applicability

  	
  80

  
	
   

  	
   

  
	
  ARTICLE IX INDEMNIFICATION

  	
  80

  
	
  Section 9.01

  	
  Indemnification by New
  Viacom

  	
  80

  
	
  Section 9.02

  	
  Indemnification by CBS

  	
  81

  
	
  Section 9.03

  	
  Adjustments to
  Indemnification Obligations

  	
  82

  
	
  Section 9.04

  	
  Contribution

  	
  82

  
	
  Section 9.05

  	
  Characterization of
  Payments

  	
  83

  
	
  Section 9.06

  	
  Notice of Loss; Third Party
  Claims

  	
  83

  
	
  Section 9.07

  	
  Remedies

  	
  84

  
	
  Section 9.08

  	
  Tax Matters

  	
  84

  
	
  Section 9.09

  	
  Additional Matters

  	
  84

  
	
  Section 9.10

  	
  Survival of Indemnities

  	
  85

  
	
   

  	
   

  
	
  ARTICLE X DISPUTE RESOLUTION

  	
  85

  
	
  Section 10.01

  	
  Disputes

  	
  85

  
	
  Section 10.02

  	
  Dispute Resolution

  	
  85

  
	
  Section 10.03

  	
  Continuity of Service and
  Performance

  	
  87

  
	
   

  	
   

  
	
  ARTICLE XI FURTHER ASSURANCES

  	
  87

  
	
  Section 11.01

  	
  Further Assurances

  	
  87

  
	
   

  	
   

  
	
  ARTICLE XII TERMINATION

  	
  87

  
	
  Section 12.01

  	
  Termination

  	
  87

  
	
  Section 12.02

  	
  Effect of Termination

  	
  88

  
	
  Section 12.03

  	
  Amendment

  	
  88

  
	
  Section 12.04

  	
  Waiver

  	
  88

  
	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
  88

  
	
  Section 13.01

  	
  Limitation of Liability

  	
  88

  
	
  Section 13.02

  	
  Expenses

  	
  88

  
	
  Section 13.03

  	
  Counterparts

  	
  89

  

 

ii

 

	
  Section 13.04

  	
  Notices

  	
  89

  
	
  Section 13.05

  	
  Public Announcements

  	
  90

  
	
  Section 13.06

  	
  Severability

  	
  90

  
	
  Section 13.07

  	
  Entire Agreement;
  Assignment

  	
  90

  
	
  Section 13.08

  	
  Parties in Interest

  	
  90

  
	
  Section 13.09

  	
  Governing Law

  	
  90

  
	
  Section 13.10

  	
  Waiver of Jury Trial

  	
  90

  
	
  Section 13.11

  	
  Headings

  	
  91

  
	
  Section 13.12

  	
  Survival of Covenants

  	
  91

  

 

iii

 

SEPARATION AGREEMENT

 

SEPARATION
AGREEMENT, dated as of December 19, 2005, by and between Viacom Inc., a
Delaware corporation (“Viacom”),
and New Viacom Corp., a Delaware corporation (“New Viacom”).

 

WHEREAS,
Viacom, directly and through its various Subsidiaries (as defined herein), is
engaged in the CBS Business (as defined herein) and in the New Viacom Business
(as defined herein);

 

WHEREAS,
the Board of Directors of Viacom has determined that it is in the best
interests of Viacom and its stockholders to separate Viacom into two separate,
publicly traded companies, which shall operate the CBS Business and the New
Viacom Business, respectively;

 

WHEREAS,
in order to effect such separation, (i) Viacom will, and will cause certain of
its Subsidiaries to, transfer to New Viacom and to the New Viacom Subsidiaries
(as defined herein) (A) all of the New Viacom Assets (as defined herein) that
are not already owned or otherwise held by New Viacom and the New Viacom
Subsidiaries and (B) all of the New Viacom Liabilities (as defined herein) that
are not already Liabilities (as defined herein) of New Viacom or the New Viacom
Subsidiaries (in each case in the manner provided in this Agreement, the
Ancillary Agreements (as defined herein) and the Restructuring Plan (as defined
herein)), (ii) New Viacom will, and will cause the New Viacom Subsidiaries to,
transfer to Viacom and the CBS Subsidiaries (as defined herein) (A) all of the
CBS Assets (as defined herein) that are not already owned or otherwise held by
Viacom and the CBS Subsidiaries and (B) all of the CBS Liabilities that are not
already Liabilities of CBS (as defined herein) or the CBS Subsidiaries (in each
case in the manner provided in this Agreement, the Ancillary Agreements and the
Restructuring Plan), (iii) Viacom and New Viacom each will retain certain
CBS Liabilities and New Viacom Liabilities, respectively, and (iv) Viacom
and Viacom Merger Sub Inc., a Delaware corporation (“Viacom Merger Sub”),
will consummate the Merger (as defined herein) (the transactions described in
clauses (i), (ii), (iii) and (iv), collectively, the “Separation”);

 

WHEREAS,
in the Merger, Viacom will be renamed “CBS Corporation” (“CBS”) and New
Viacom will be renamed “Viacom Inc.” and, following the Separation, CBS will
conduct the CBS Business and New Viacom will conduct the New Viacom Business;

 

WHEREAS,
pursuant to the Merger Agreement (as defined herein), (i) each share of class A
common stock, par value $0.01 per share, of Viacom (the “Viacom Class A
Common Stock”) issued and outstanding immediately prior to the Effective
Time (as defined in the Merger Agreement) shall be converted automatically into
the right to receive 0.5 of a share of class A common stock, par value $0.001
per share, of New Viacom (the “New Viacom Class A Common Stock”) and 0.5
of a share of class A common stock, par value $0.001 per share, of CBS
(the “CBS Class A Common Stock”) and (ii) each share of
class B common stock, par value $0.01 per share, of Viacom (together with
the Viacom Class A Common Stock, the “Viacom Common Stock”) issued and
outstanding immediately prior to the Effective Time shall be converted
automatically into the right to receive 0.5 of a share of class B common
stock, par value $0.001 per share, of New Viacom (together with the New Viacom
Class A Common Stock, the “New

 

1

 

Viacom
Common Stock”) and 0.5 of a share of class B common
stock, par value $0.001 per share, of CBS (together with the CBS Class A
Common Stock, the “CBS Common Stock”);

 

WHEREAS,
the formation of New Viacom and the distribution of the New Viacom Common Stock
pursuant to the Merger are intended to qualify as a tax-free reorganization
under Section 368(a)(1)(D) of the Code (as defined herein), and this Agreement
is intended to be, and is hereby adopted as, a plan of reorganization under
Section 368 of the Code, with each of Viacom and New Viacom as a party to
the reorganization;

 

WHEREAS,
the receipt of the New Viacom Common Stock by the stockholders of Viacom is
intended to be tax-free under Section 355 of the Code; and

 

WHEREAS,
Viacom and New Viacom have determined that it is necessary and desirable to set
forth the agreements that will effect the Separation and govern certain matters
following the Separation;

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, Viacom
and New Viacom hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01           Certain
Defined Terms.  For purposes of this
Agreement:

 

“2005
Internal Control Audit and Management Assessments” has the meaning set
forth in Section 4.02.

 

“401(k)
Plan” means the Viacom 401(k) Plan or the New Viacom 401(k) Plan, as the
context requires.

 

“Action” means any demand, claim,
counterclaim, action, suit, arbitration, inquiry, proceeding or investigation,
in each case brought by or pending before any Governmental Authority.

 

“Actual
Special Dividend Amount” has the meaning set forth in Section 2.08(g).

 

“Adjusted
Swap Rate” means the bid-side quote for U.S. dollar interest rate swaps,
plus 50 basis points, as shown on Bloomberg page IRSB as of the close of
business on the date as of which the determination is to be made for swaps with
a maturity closest to the average life of the payments being discounted.

 

“Affiliate” means, with respect to
any specified Person, any other Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with, such specified Person.

 

“Aggregate
Threshold” has the meaning set forth in Section 13.02.

 

2

 

“Agreement” means this Separation
Agreement between the parties hereto (including, without limitation, the
Exhibits and Schedules hereto), as it may be amended from time to time in
accordance with the provisions of Section 12.03.

 

“Agreement
Disputes” has the meaning set forth in Section 10.01.

 

“Allocation”
has the meaning set forth in Section 5.01(m).

 

“Ancillary Agreements” means the
Merger Agreement, the Tax Matters Agreement, the Transition Services Agreement,
the Intercompany Agreements, the License Agreements and the Implementation
Agreements.

 

“Annual
Financial Statements” has the meaning set forth in Section 4.01(d).

 

“Approved
Leave of Absence” means an absence from active service (i) due to an
individual’s inability to perform his or her regular job duties by reason of
illness or injury and resulting in eligibility to receive benefits pursuant to
the terms of the Viacom Short-Term Disability Plan or the Viacom Long-Term
Disability Plan or (ii) pursuant to an approved leave policy with a guaranteed
right of reinstatement.

 

“ASO
Contract” has the meaning set forth in Section 6.04(i)(i).

 

“Assets” means the assets,
properties and rights (including, without limitation, goodwill), wherever
located, whether tangible or intangible, real, personal or mixed, in each case
whether or not recorded or reflected or required to be recorded or reflected on
the books and records or financial statements of the owner or licensee of such
Assets, including, without limitation, the following:

 

(a)           all accounting and other books,
records and files, whether in paper, microfilm, microfiche, computer tape or
disk, magnetic tape or any other form;

 

(b)           all apparatus, computers and other
electronic data processing equipment, fixtures, machinery, equipment,
furniture, office equipment, automobiles, trucks, motor vehicles and other
transportation equipment, special and general tools, test devices, prototypes
and models and other tangible personal property;

 

(c)           all inventories of materials, parts,
supplies, work-in-process and finished goods and products;

 

(d)           all interests in real property of
whatever nature, including, without limitation, easements, whether as owner,
mortgagee or holder of an Encumbrance in real property, lessor, sublessor,
lessee, sublessee, licensor, licensee, sublicensor, sublicensee or otherwise;

 

(e)           all interests in any capital stock or
other equity interests of any Subsidiary or any other Person, all bonds, notes,
debentures or other securities issued by any Subsidiary or any other Person,
all loans, advances or other extensions of credit or capital

 

3

 

contributions to any
Subsidiary or any other Person and all other investments in securities of any
Person;

 

(f)            all leases of personal property,
open purchase orders for raw materials, supplies, parts or services, unfilled
orders for the manufacture and sale of products and other contracts, agreements
or commitments;

 

(g)           all deposits, letters of credit and
performance and surety bonds;

 

(h)           all written technical information,
data, specifications, research and development information, engineering
drawings, operating and maintenance manuals, and materials and analyses
prepared by consultants and other third parties;

 

(i)            all Intellectual Property (together
with all goodwill associated therewith and the right to sue and recover at law
or in equity for past, present and future infringement, misappropriation,
dilution, violation or other impairment of such Intellectual Property) and all
license agreements (including, without limitation, licenses from or to third
parties in respect of Intellectual Property);

 

(j)            Software;

 

(k)           all cost information, sales and
pricing data, customer prospect lists, supplier records, customer and vendor
data, correspondence and lists, product literature, artwork, design, research
and development files, vendor and customer specifications, quality records and
reports and other books, records, studies, surveys, reports, plans and
documents;

 

(l)            all prepaid expenses, trade accounts
and other accounts and notes receivables;

 

(m)          all rights under Contracts, all claims
or rights against any Person, choses in action or similar rights, whether
accrued or contingent;

 

(n)           subject to Section 5.01(k), all
Insurance Rights and all rights in the nature of insurance, indemnification or
contribution;

 

(o)           all licenses, permits, approvals and
authorizations which have been issued by any Governmental Authority;

 

(p)           all cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and

 

(q)           all interest rate, currency,
commodity or other swap, collar, cap or other hedging or similar agreements or
arrangements.

 

“Blended
Index” has the meaning set forth in Section 6.01(d)(iii).

 

4

 

“Broadcast
Interest” means a direct or indirect ownership, managerial or other interest
in a radio broadcast station, television broadcast station or television
broadcast network that is “cognizable” or “attributable” for purposes of one or
more of the FCC Broadcast Ownership Rules.

 

“Business”
means either the New Viacom Business or the CBS Business, as the context
requires.

 

“Business
Day” means any day that is not a Saturday, a Sunday or any other day on
which banks are required or authorized by Law to be closed in The City of New
York.

 

“Cable
Operator Interest” means a direct or indirect ownership, managerial or
other interest in (i) a cable operator, (ii) a common carrier or an affiliate
of a common carrier that provides video programming by any means directly to
subscribers, or (iii) an open video system operator that is “cognizable” or “attributable”
for purposes of one or more of the FCC Program Access Rules.

 

“Capital
Taxes” has the meaning set forth in the Tax Matters Agreement.

 

“CBS” has the meaning set forth in
the Recitals.

 

“CBS
Actuary” means an independent actuary selected by CBS.

 

“CBS Assets” means all of the
right, title and interest of Viacom and its Subsidiaries in and to all Assets
owned by Viacom and its Subsidiaries or to which any of them are entitled,
including, without limitation:

 

(i)            any and all Assets as set forth in
this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto)
as Assets to be transferred to or retained by any member of the CBS Group,
including, without limitation, those Assets that are listed on
Schedule 1.01(a) hereto;

 

(ii)           any and all Assets reflected on the
CBS Balance Sheet or the accounting records supporting such balance sheet,
subject to any disposition of such Assets subsequent to the date of the CBS
Balance Sheet and prior to the Separation Date;

 

(iii)          any and all Assets that have been
written off, expensed or fully depreciated that, had they not been written off,
expensed or fully depreciated, would have been reflected on the CBS Balance
Sheet if such balance sheet had been prepared in accordance with the same
principles and accounting policies under which the CBS Balance Sheet was
prepared;

 

(iv)          any and all Assets acquired by Viacom
or any of its Subsidiaries after the date of the CBS Balance Sheet and prior to
the Separation Date that would have been reflected on a consolidated balance
sheet of CBS and the CBS Subsidiaries if such balance sheet were prepared as of
the Separation Date using the same principles and accounting policies under
which the CBS Balance Sheet was prepared;

 

5

 

(v)           the Actual Special Dividend Amount;

 

(vi)          all CBS Contracts, including all
rights of any member of the CBS Group under any Intercompany Agreement,
including, without limitation, those listed on Schedule 1.01(j) hereto;

 

(vii)         all issued and outstanding capital
stock or membership or partnership interest in the Subsidiaries of Viacom and
other entities listed on Schedule 1.01(b) hereto;

 

(viii)        all CBS Claims and 50% of all Joint New
Viacom and CBS Claims;

 

(ix)           with respect to any CBS Liability or
CBS Loss, all Insurance Rights under any of the Policies to the extent that,
with respect to any such CBS Liability or CBS Loss, any member of the CBS Group
is, or is deemed under the Law to be, an insured under the Policies or is
otherwise permitted under the terms of the Policies in accordance with
applicable Law, including, without limitation, as assignee, to obtain the
benefits or proceeds of such Policies; and

 

(x)            except as expressly provided for in
this Agreement or any Ancillary Agreement, any and all Assets as and to the
extent related to the business of Viacom as conducted immediately before the
Separation and not otherwise transferred to or retained by a member of the CBS
Group as a CBS Asset.  The intention of
this subparagraph (x) is only to rectify any inadvertent omission of transfer
or conveyance of any Asset that, had the parties given specific consideration
to such Asset as of the Separation Date, would have otherwise been classified
as a CBS Asset.  No Asset shall be deemed
to be a CBS Asset solely as a result of this subparagraph (x) if such Asset is
expressly covered by the subject matter of an Ancillary Agreement or is
expressly provided for in this Agreement. 
In addition, no member of the CBS Group may claim ownership of an Asset
within the scope of this subparagraph (x) unless (A) CBS submits to New Viacom
a claim with respect to the ownership of such Asset prior to the fifth
anniversary of the Separation Date or (B) if CBS submits to New Viacom a claim
with respect to the ownership of such Asset after the fifth anniversary of the
Separation Date, a member of the CBS Group must have actively and openly used
or otherwise claimed such Asset prior to such fifth anniversary;

 

provided, however, that
notwithstanding anything in clauses (i)–(x), “CBS Assets” shall not include any
New Viacom Assets.

 

For purposes of this Agreement, refunds and credits of
Income Taxes or Capital Taxes in respect of taxable periods (or portions
thereof) ending on or prior to the Separation Date shall not constitute CBS
Assets, but rather the allocation of any such refunds or credits shall be
exclusively governed by the Tax Matters Agreement.

 

“CBS
Auditors” means CBS’s independent certified public accountants.

 

“CBS
Balance Sheet” means the pro forma consolidated condensed balance sheet of
CBS and the CBS Subsidiaries, including the notes thereto, as of September 30,
2005 included in the Registration Statement.

 

6

 

“CBS Business” means the business
of the CBS Group as described in the Registration Statement and as conducted
immediately following the Separation, in each case subject to further
specificity as may be described in this Agreement or the Ancillary Agreements.

 

“CBS
Claims” has the meaning set forth in Section 8.02.

 

“CBS
Class A Common Stock” has the meaning set forth in the Recitals.

 

“CBS
Common Stock” has the meaning set forth in the Recitals.

 

“CBS
Contracts” means all Contracts to which Viacom or any CBS Subsidiary is a
party or by which any of them or any of their respective Assets is bound,
whether or not in writing, other than New Viacom Contracts and License
Agreements.

 

“CBS
Employee” means an individual who, immediately after the Separation Date,
is actively employed by, or then on an Approved Leave of Absence from, any
member of the CBS Group.  

 

“CBS Group” means, collectively,
CBS and each CBS Subsidiary.

 

“CBS Indemnified Party” has the
meaning set forth in Section 9.01.

 

“CBS
Last 10-K Date” has the meaning set forth in Section 4.01(a).

 

“CBS Liabilities” means all of the
Liabilities of Viacom and its Subsidiaries including, without limitation:

 

(i)            any and all Liabilities that are set
forth in this Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as Liabilities to be retained or assumed by CBS or any other member of
the CBS Group, including, without limitation, those Liabilities listed on
Schedule 1.01(c) hereto;

 

(ii)           any and all Liabilities related to
the rights of an actor, director, writer, producer or other party to the
payment of any fixed or contingent compensation, including, without limitation,
royalties, participations, residuals and use payments and other similar
payments related to the production and dissemination by CBS of Paramount
television product, excluding television product acquired by or exclusively for
Paramount Home Entertainment;

 

(iii)          all Insured New Viacom Liabilities,
all Insured New Viacom Losses, all of the Liabilities related to the CBS
Litigation Matters, all Liabilities related to Future CBS Litigation Matters
and 50% of any Future Joint Litigation Matter;

 

(iv)          50% of any and all Liabilities under
applicable Laws (including, without limitation, federal and state securities
Laws) arising from or relating to the Registration Statement or any other
document filed with any Governmental Authority (including, without limitation,
the SEC) at or prior to the Separation Date by New Viacom or Viacom or any
Subsidiary of Viacom in connection with the Separation or Merger;

 

7

 

(v)           50% of any and all Liabilities
arising from or relating to any claim, demand or Action with respect to the
Separation or the Merger made or brought by any Person against Viacom, CBS or
New Viacom or any member of their respective Groups;

 

(vi)          50% of any and all Liabilities
relating to, arising from or involving a general corporate matter of Viacom or
Paramount Pictures Corporation, including, without limitation, (A) those
Liabilities set forth on Schedule 1.01(d)(vi), (B) Liabilities relating to
Unallocated Employees and (C) claims under federal and state securities Laws
and claims for breach of fiduciary duties, that relate to events that took
place prior to the Separation Date and, in any case, that are not otherwise
specified to be a CBS Liability or New Viacom Liability or otherwise
specifically allocated under this Agreement or any Ancillary Agreement;

 

(vii)         any and all Liabilities as and to the
extent relating to, arising out of or resulting from any CBS Assets;

 

(viii)        100% of any Insurance Charges arising
solely and directly from the CBS Business; and

 

(ix)           except as expressly provided for in
this Agreement or any Ancillary Agreement, any and all Liabilities as and to
the extent related to the CBS Business on the Separation Date and not otherwise
transferred to or retained by a member of the CBS Group as a CBS
Liability.  The intention of this
subparagraph (ix) is only to rectify any inadvertent omission of transfer
or conveyance of any Liability that, had the parties given specific
consideration to such Liability as of the Separation Date, would have otherwise
been classified as a CBS Liability.  No
Liability shall be deemed to be a CBS Liability solely as a result of this
subparagraph (ix) if such Liability is expressly covered by the subject
matter of an Ancillary Agreement.  In
addition, no member of the New Viacom Group may claim that a Liability within
the scope of this subparagraph (ix) should be a CBS Liability unless New Viacom
submits to CBS a claim with respect to the ownership of such Liability on or
prior to the fifth anniversary of the Separation Date;

 

provided, however, that
(1) ”CBS Liabilities” shall not include any Insured CBS Liabilities,
(2) notwithstanding anything in this definition to the contrary, “CBS
Liabilities” shall not include any New Viacom Liabilities and (3) ”CBS
Liabilities” shall not include Liabilities for Income Taxes or Capital Taxes,
which shall be governed by the Tax Matters Agreement.

 

“CBS
Litigation Matters” means the Actions listed on Schedule 1.01(e) hereto and
any other Actions, claims or demands solely related to the CBS Assets or CBS
Liabilities commenced on or before the Separation Date.

 

“CBS
Loss” means any Insured New Viacom Loss and any diminution in value,
injury, damage, loss or similar insurable event sustained by or in connection
with the CBS Business and covered or potentially covered under a Policy
providing property or other first-party insurance; provided, however,
CBS Loss shall not include any Insured CBS Loss.

 

“CBS
Obligations” has the meaning set forth in Section 2.05(a).

 

8

 

“CBS
Subsidiary” means any entity controlled by CBS or of which CBS shares
equally in the control with another Person, in either case, directly or
indirectly through one or more intermediaries, after giving effect to the
Separation.

 

“CCPP”
means the CBS Combined Pension Plan.

 

“COBRA”
means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
and the regulations promulgated thereunder, including, without limitation, any
successor legislation.

 

“Code” means the Internal Revenue
Code of 1986, as amended.

 

“Confidential Information” has the
meaning set forth in Section 3.02(a).

 

“Consents” means any consents,
waivers or approvals from, or notification requirements to, any Person other
than a Governmental Authority.

 

“Contracts” means any contract,
agreement, lease, license, sales order, purchase order, instrument or other
commitment that is binding on any Person or any part of its property under
applicable Law.

 

“control”
(including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two or more Persons, means
the possession, directly or indirectly or as trustee, personal representative
or executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee, personal representative or executor, by contract or credit arrangement
or otherwise.

 

“Deferred
Transfer Asset” has the meaning set forth in Section 2.11(a).

 

“Deferred
Transfer Liability” has the meaning set forth in Section 2.11(a).

 

“Employee
Benefit Plan” means either a New Viacom Employee Benefit Plan or a Viacom
Employee Benefit Plan, as the case may be.

 

“Encumbrance” means any security
interest, pledge, hypothecation, mortgage, lien or encumbrance, other than any
licenses of Intellectual Property or Software.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder, including, without limitation, any
successor legislation.

 

“Escalation
Notice” has the meaning set forth in Section 10.02(a).

 

“Estimated
Pension Plan Transfer Amount” has the meaning set forth in Section 6.01(d)(ii).

 

9

 

“Estimated
Special Dividend Amount” has the meaning set forth in Section 2.08(g).

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, together with the rules and regulations
promulgated thereunder.

 

“FCC” means
the Federal Communications Commission or any successor agency.

 

“FCC Broadcast
Ownership Rules” means any federal statute, including, without limitation,
Section 202 of the Telecommunications Act of 1996, as amended, or FCC
rule, including, without limitation, 47 C.F.R. § 73.658(g) and § 73.3555, that
limits, directly or indirectly, the ownership or control of radio broadcast
stations, television broadcast stations and/or television broadcast networks,
as currently in effect and as may hereafter be amended or become effective from
time to time, and any FCC policy or decision implementing, interpreting or
modifying such statute or rule.

 

“FCC Program
Access Rules” means any federal statute, including, without limitation, 47
U.S.C. § 548, or FCC rule, including, without limitation, 47 C.F.R. Part
76, Subpart O, regulating contractual relationships between satellite cable
programming vendors and multichannel video programming distributors, as
currently in effect and as may hereafter be amended or become effective from
time to time, and any FCC policy or decision implementing, interpreting or
modifying such statute or rule.

 

“Final
Calculation Statement” has the meaning set forth in Section 2.08(g).

 

“Final
Pension Plan Transfer Amount” has the meaning set forth in
Section 6.01(d)(iv).

 

“Final
Transfer Date” has the meaning set forth in Section 6.01(d)(v).

 

“Former
CBS Employee” means (i) a Former Viacom Employee, other than a Viacom
or Paramount corporate office employee, whose most recent active employment
with Viacom and its Subsidiaries (prior to or on the Separation Date) was with
a CBS Business,  (ii) a Former Viacom
Employee whose most recent active employment with Viacom and its Subsidiaries
was with one of the sold or discontinued businesses listed on
Schedule 1.01(f)(ii) hereto, (iii) an individual (or member of a
group) listed on Schedule 1.01(g)(iii) hereto, (iv) a Former Viacom
Employee whose most recent active employment with Viacom and its Subsidiaries
was with a predecessor of a CBS Business or a terminated, divested or
discontinued business, in each case that was operated by any member of the CBS
Group or that relates, or was related, to the CBS Business or to any
predecessor of a CBS Business or to any member of the CBS Group and that is not
set forth on Schedule 1.01(h)(ii) hereto, (v) an individual whose
employment by the former CBS Corporation terminated prior to that corporation’s
merger with Viacom on May 4, 2000 and whose most recent active employment with
the former CBS Corporation was with the CBS Corporation corporate office or
(vi) any individual who was a Viacom or Paramount corporate office employee and
who was offered and accepted employment with CBS for periods after the Separation
Date, but whose active employment terminated prior to the Separation Date.

 

10

 

“Former
New Viacom Employee” means (i) a Former Viacom Employee, other than a
Viacom or Paramount corporate office employee, whose most recent active
employment with Viacom and its Subsidiaries (prior to or on the Separation
Date) was with a New Viacom Business, (ii) a Former Viacom Employee whose
most recent active employment with Viacom and its Subsidiaries was with one of
the sold or discontinued businesses listed on Schedule 1.01(h)(ii) hereto,
(iii) an individual (or member of a group) listed on Schedule 1.01(i)(iii)
hereto, (iv) a Former Viacom Employee whose most recent active employment with
Viacom and its Subsidiaries was with a predecessor of a New Viacom Business or
a terminated, divested or discontinued business, in each case that was operated
by any member of the New Viacom Group or that relates, or was related, to the
New Viacom Business or to any predecessor of a New Viacom Business or to any
member of the New Viacom Group and that is not set forth on
Schedule 1.01(f)(ii) hereto or (v) any individual who was a Viacom or
Paramount corporate office employee and who was offered and accepted employment
with New Viacom for periods after the Separation Date, but whose active
employment terminated prior to the Separation Date.

 

“Former
Viacom Employee” means an individual (i) whose employment by Viacom or its
Subsidiaries terminated prior to or on the Separation Date and (ii) who is not a
New Viacom Employee or CBS Employee immediately after the Separation Date.

 

“Future
CBS Litigation Matter” has the meaning set forth in Section 8.01(c)(ii).

 

“Future
Joint Litigation Matters” has the meaning set forth in Section
8.01(c)(iii).

 

“Future
New Viacom Litigation Matter” has the meaning set forth in Section
8.01(c)(i).

 

“Governmental Approvals” means any
notices or reports to be submitted to, or other filings to be made with, or any
consents, registrations, approvals, permits or authorizations to be obtained
from, any Governmental Authority.

 

“Governmental Authority” means any
U.S. or non-U.S. federal, national, supranational, state, provincial,
local or other government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal or judicial or arbitral
body.

 

“Governmental Order” means any
order, writ, judgment, injunction, decree, stipulation, determination or award
entered by or with any Governmental Authority.

 

“Group” means the CBS Group or the
New Viacom Group, as the context requires.

 

“Group
Insurance Policies” has the meaning set forth in Section 6.04(i)(i).

 

“HIPAA”
means the Health Insurance Portability and Accountability Act of 1996, as
amended.

 

“HMO
Agreements” has the meaning set forth in Section 6.04(i)(i).

 

11

 

“Implementation Agreements” means
the agreements necessary to effect the Restructuring Plan.

 

“Income
Taxes” has the meaning set forth in the Tax Matters Agreement.

 

“Indemnified Party” has the meaning
set forth in Section 9.03(a).

 

“Indemnifying Party” has the
meaning set forth in Section 9.03(a).

 

“Indemnity Payment” has the meaning
set forth in Section 9.03(a).

 

“Information” means information,
whether or not patentable or copyrightable, in written, oral, electronic or
other tangible or intangible forms, stored in any medium, including, without
limitation, studies, reports, records, books, contracts, instruments, surveys,
discoveries, ideas, concepts, know-how, techniques, designs, specifications,
drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data,
computer data, disks, diskettes, tapes, computer programs or other software,
marketing plans, customer names, communications by or to attorneys (including,
without limitation, attorney-client privileged communications), memoranda and
other materials prepared by attorneys or under their direction (including,
without limitation, attorney work product), and other technical, financial,
employee or business information or data.

 

“Initial
Transfer Amount” has the meaning set forth in Section 6.01(d)(iii).

 

“Initial
Transfer Date” has the meaning set forth in Section 6.01(d)(iii).

 

“Insurance
Charges” has the meaning set forth in Section 5.01(f).

 

“Insurance Proceeds” means those
monies (a) received by an insured or reinsured from an insurer or
reinsurer or (b) paid by an insurer or reinsurer on behalf of the insured
or reinsured, in any such case net of any applicable premium adjustments
(including, without limitation, retrospectively rated premium adjustments) and
net of any self-insured retention, deductible or other form of self-insurance
and net of any third party costs or expenses incurred in the collection
thereof.

 

“Insurance
Rights” means any and all rights under or arising out of the Policies and
any and all claims and choses in action under or arising out of the Policies
and for benefits and proceeds thereof, including, without limitation, those
rights, claims or choses in action held directly as an insured, additional insured,
additional named insured, subsidiary, affiliate, division or department,
successor-in-interest or assignee to the fullest extent permitted under the
terms of the Policies in accordance with applicable Law.

 

“Insured
CBS Liabilities” means that portion of any CBS Liability, without giving
effect to clause (1) of the proviso included at the end of the definition of “CBS
Liabilities,” to the extent, and only to the extent, that, with respect to such
portion of such Liability, Insurance Proceeds of the Policies are actually
recoverable by a member of the New Viacom Group directly, as a successor in
interest or permitted assignee under the terms of the Policies in accordance
with applicable Law, and not by any member of the CBS Group.

 

12

 

“Insured
CBS Loss” means that portion of any CBS Loss, without giving effect to the
proviso at the end of the definition of “CBS Loss,” to the extent and only to
the extent that, with respect to such portion of such CBS Loss, Insurance
Proceeds of the Policies are actually recoverable by a member of the New Viacom
Group directly, as a successor in interest or permitted assignee under the
terms of the Policies in accordance with applicable Law, and not by any member
of the CBS Group.

 

“Insured
New Viacom Liabilities” means that portion of any New Viacom Liability,
without giving effect to clause (1) of the proviso included at the end of the
definition of “New Viacom Liabilities,” but only to the extent that, with
respect to such portion of such Liability, Insurance Proceeds of the Policies
are actually recoverable by a member of the CBS Group directly, as a successor
in interest or permitted assignee under the terms of the Policies in accordance
with applicable Law, and not by any member of the New Viacom Group.

 

“Insured
New Viacom Loss” means that portion of any New Viacom Loss, without giving
effect to the proviso at the end of the definition of “New Viacom Loss,” to the
extent and only to the extent that, with respect to such portion of such New
Viacom Loss, Insurance Proceeds of the Policies are actually recoverable by a
member of the CBS Group directly, as a successor in interest or permitted
assignee under the terms of the Policies in accordance with applicable Law, and
not by any member of the New Viacom Group.

 

“Intellectual
Property” means all right, title and interest in or relating to
intellectual property or industrial property, whether arising under the Law of
the United States or any other country or any political subdivision thereof or
multinational Laws or any other Law, including, without limitation, (a)
patents, patent applications, and all divisionals, continuations and
continuations-in-part thereof, together with all reissues, reexaminations,
renewals and extensions thereof and all rights to obtain such divisionals,
continuations and continuations-in-part, reissues, reexaminations, renewals and
extensions, and all utility models and statutory invention registrations, (b)
trademarks, service marks, Internet domain names, trade dress, trade styles,
logos, trade names, services names, brand names, corporate names, assumed
business names and general intangibles and other source identifiers of a like
nature, together with the goodwill associated with any of the foregoing, and
all registrations and applications for registrations thereof, together with all
renewals and extensions thereof and all rights to obtain such renewals and
extensions, (c) copyrights, mask work rights, database and design rights,
moral rights and rights in Internet websites, whether registered or
unregistered and whether published or unpublished, all registrations and
recordings thereof and all applications in connection therewith, together with
all renewals, continuations, reversions and extensions thereof and all rights
to obtain such renewals, continuations, reversions and extensions and (d)
confidential and proprietary information, including, without limitation, trade
secrets and know-how.

 

“Intercompany
Agreements” means the agreements, arrangements, commitments or
understandings, whether or not in writing, between one or more members of the
New Viacom Group, on the one hand, and one or more members of the CBS Group, on
the other hand, including, without limitation, the agreements listed on Schedule
1.01(j) hereto.

 

13

 

“Intercompany
Balances” means all accounts receivable and accounts payable between (i)
Viacom or a member of the CBS Group, on the one hand, and (ii) a member of the
New Viacom Group, on the other hand.

 

“Interim
Benefit Obligation Payment Amount” has the meaning set forth in Section
6.01(b).

 

“IRS”
means the United States Internal Revenue Service.

 

“Joint
Liability” means any Liability that is (i) both a CBS Liability and a New
Viacom Liability and (ii) not exclusively a CBS Liability or a New Viacom
Liability.

 

“Joint
Loss” means any diminution in value, injury, damage, loss or similar
insurable event that is (i) both a CBS Loss and a New Viacom Loss and (ii) not
exclusively a CBS Loss or a New Viacom Loss.

 

“Joint
New Viacom and CBS Claims” has the meaning set forth in Section 8.02.

 

“Law”
means any U.S. or non-U.S. federal, national, supranational, state, provincial,
local or similar statute, law, ordinance, regulation, rule, code, order,
requirement or rule of law (including, without limitation, common law).

 

“Liabilities” means any and all
debts, liabilities and obligations, whether accrued or fixed, absolute or
contingent, matured or unmatured, reserved or unreserved, or determined or
determinable, including, without limitation, those arising under any Law,
claim, demand, Action, whether asserted or unasserted, or Governmental Order
and those arising under any contract, agreement, arrangement, commitment or
undertaking or any fines, damages or equitable relief which may be imposed and
including, without limitation, all costs and expenses related thereto.

 

“License
Agreements” means the Intellectual Property license agreements between any
member or members of the CBS Group, on the one hand, and any member or members
of the New Viacom Group, on the other hand, listed on Schedule 1.01(k) hereto,
and as hereafter amended.

 

“Loss”
has the meaning set forth in Section 9.01.

 

“Lost
Participants” has the meaning set forth in Section 6.01(h).

 

“Media Company
Interest” means a direct or indirect ownership, managerial or other
interest in a radio broadcast station, television broadcast station, television
broadcast network or daily newspaper that is “cognizable” or “attributable” for
purposes of one or more of the FCC Broadcast Ownership Rules.

 

“Merger” means the merger of Viacom
Merger Sub with and into Viacom pursuant to the Merger Agreement.

 

“Merger Agreement” means the Merger
Agreement by and among Viacom, New Viacom and Viacom Merger Sub dated as of
November 21, 2005.

 

14

 

“Mixed
Contract” has the meaning set forth in Section 2.03(a).

 

“Named
Party” has the meaning set forth in Section 8.01(d).

 

“New Viacom” has the meaning set
forth in the Preamble.

 

“New
Viacom 401(k) Plan” has the meaning set forth in Section 6.02(b)(i).

 

“New
Viacom 401(k) Plan Transfer Date” has the meaning set forth in
Section 6.02(b)(ii).

 

“New Viacom Actuary” means an independent
actuary selected by New Viacom.

 

“New
Viacom Assets” means all of the right, title and interest in and to:

 

(i)            all Assets owned by Viacom and its
Subsidiaries that relate primarily to the New Viacom Business, except for any
such Assets listed on Schedule 1.01(a) hereto or as may otherwise be contemplated
by a written Intercompany Agreement;

 

(ii)           any and all Assets as set forth in
this Agreement or any Ancillary Agreement (including, without limitation, the
Schedules hereto or thereto) as Assets to be transferred to or retained by any
member of the New Viacom Group, including, without limitation, those Assets
that are listed on Schedule 1.01(l) hereto;

 

(iii)          any and all Assets reflected on the
New Viacom Balance Sheet or the accounting records supporting such balance
sheet, subject to any disposition of such Assets subsequent to the date of the
New Viacom Balance Sheet and prior to the Separation Date;

 

(iv)          any and all Assets that have been
written off, expensed or fully depreciated that, had they not been written off,
expensed or fully depreciated, would have been reflected on the New Viacom
Balance Sheet if such balance sheet had been prepared in accordance with the
same principles and accounting policies under which the New Viacom Balance
Sheet was prepared;

 

(v)           any and all Assets acquired by Viacom
or any of its Subsidiaries after the date of the New Viacom Balance Sheet and
prior to the Separation Date that would have been reflected on a consolidated
balance sheet of New Viacom and the New Viacom Subsidiaries if such balance
sheet were prepared as of the Separation Date using the same principles and
accounting policies under which the New Viacom Balance Sheet was prepared;

 

(vi)          all New Viacom Contracts and all
rights of any member of the New Viacom Group under any Intercompany Agreement,
including, without limitation, those listed on Schedule 1.01(j) hereto;

 

15

 

(vii)         all issued and outstanding capital
stock or membership or partnership interests in the Subsidiaries of Viacom and
other entities listed on Schedule 1.01(m) hereto;

 

(viii)        all New Viacom Claims and 50% of all
Joint New Viacom and CBS Claims;

 

(ix)           with respect to any New Viacom
Liability or New Viacom Loss, all Insurance Rights under any of the Policies to
the extent that, with respect to such New Viacom Liability or New Viacom Loss,
any member of the New Viacom Group is, or is deemed under the Law to be, an
insured under such Policies or is otherwise permitted under the terms of the
Policies in accordance with applicable Law, including, without limitation, as
assignee, to obtain the benefits or proceeds of such Policies;

 

(x)            50% of any Assets relating to,
arising from or involving a general corporate matter of Viacom or Paramount
Pictures Corporation that relates to events that took place prior to the
Separation Date and that are not otherwise specified to be a CBS Asset or New
Viacom Asset under this Agreement or any Ancillary Agreement; and

 

(xi)           except as expressly provided for in
this Agreement or any Ancillary Agreement, any and all Assets as and to the
extent related to the New Viacom Business and not otherwise transferred to or
retained by a member of the New Viacom Group as a New Viacom Asset.  The intention of this subparagraph (xi) is
only to rectify any inadvertent omission of transfer or conveyance of any
Assets that, had the parties given specific consideration to such Assets as of
the Separation Date, would have otherwise been classified as a New Viacom
Asset.  No Asset shall be deemed to be a
New Viacom Asset solely as a result of this subparagraph (xi) if such Asset is
expressly covered by the subject matter of an Ancillary Agreement or is
expressly provided for in this Agreement. 
In addition, no member of the New Viacom Group may claim ownership of an
Asset within the scope of this subparagraph (xi) unless (A) New Viacom submits
to CBS a claim with respect to the ownership of such Asset prior to the fifth
anniversary of the Separation Date or (B) if New Viacom submits to CBS a claim
with respect to the ownership of such Asset after the fifth anniversary of the
Separation Date, a member of the New Viacom Group must have actively and openly
used or otherwise claimed such Asset prior to such fifth anniversary;

 

For purposes of this Agreement, refunds and credits of
Income Taxes or Capital Taxes in respect of taxable periods (or portions
thereof) ending on or prior to the Separation Date shall not constitute New
Viacom Assets, but rather the allocation of any such refunds or credits shall
be exclusively governed by the Tax Matters Agreement.

 

“New
Viacom Auditors” means New Viacom’s independent certified public
accountants.

 

“New Viacom Balance Sheet” means
the pro forma consolidated balance sheet of New Viacom and the New Viacom
Subsidiaries, including the notes thereto, as of September 30, 2005
included in the Registration Statement.

 

16

 

“New Viacom Business” means the
business of the New Viacom Group as described in the Registration Statement and
as conducted immediately following the Separation, in each case subject to
further specificity as may be described in this Agreement or the Ancillary
Agreements.

 

“New
Viacom Captive” has the meaning set forth in Section 5.02(a).

 

“New
Viacom Claims” has the meaning set forth in Section 8.02.

 

“New
Viacom Class A Common Stock” has the meaning set forth in the Recitals.

 

“New
Viacom Common Stock” has the meaning set forth in the Recitals.

 

“New
Viacom Commuter Reimbursement Plan” has the meaning set forth in Section
6.04(h)(ii).

 

“New Viacom Contracts” means the
following Contracts to which Viacom or any of the Viacom Subsidiaries is a party
or by which it or any of their Assets are bound, whether or not in writing,
except, in any case, for Mixed Contracts that a member of the CBS Group is a
party to, License Agreements and any such Contract that is explicitly
contemplated to be retained by or assigned to CBS or any other member of the
CBS Group pursuant to any provision of this Agreement or any Ancillary
Agreement:

 

(i)            any Contract entered into in the
name of, or expressly on behalf of, New Viacom, any New Viacom Subsidiary or
any division or business unit of New Viacom;

 

(ii)           any Contract that relates primarily
to the New Viacom Business; and

 

(iii)          any Contract that is otherwise expressly
contemplated to be assigned to any member of the New Viacom Group pursuant to
this Agreement or any of the Ancillary Agreements.

 

“New
Viacom Defined Benefit Pension Plan” has the meaning set forth in
Section 6.01(b).

 

“New
Viacom Employee” means an individual who, immediately after the Separation
Date, is employed by, or then on an Approved Leave of Absence from, New Viacom
or any New Viacom Subsidiary.

 

“New
Viacom Employee Benefit Plans” means all “employee benefit plans” (within
the meaning of Section 3(3) of ERISA), “multiemployer plans” (within the
meaning of Section 3(37) of ERISA), retirement, pension, savings,
profit-sharing, welfare, stock purchase, stock option, equity-based, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements (including, without
limitation, any funding mechanisms therefor), whether or not subject to ERISA,
whether formal or informal, oral or written, legally binding or not, sponsored,
maintained or contributed to by New Viacom or any

 

17

 

New
Viacom Subsidiary (or to which New Viacom or any New Viacom Subsidiary
contributes or is required to contribute) on or after the Separation Date.

 

“New
Viacom Employee Benefit Records” means all agreements, documents, books,
records or files relating to the New Viacom Employee Benefit Plans.

 

“New
Viacom Equity Compensation Plans” means all equity compensation plans
established and adopted by New Viacom prior to, on or after the Separation
Date.

 

“New
Viacom Executive Benefit Plans” has the meaning set forth in
Section 6.03(a).

 

“New
Viacom Flexible Benefit Plan” has the meaning set forth in Section
6.04(h)(i).

 

“New Viacom Group” means,
collectively, New Viacom and each New Viacom Subsidiary.

 

“New Viacom Indemnified Party” has
the meaning set forth in Section 9.02.

 

“New
Viacom Liabilities” means:

 

(i)            all Liabilities of Viacom and its Subsidiaries
as and to the extent related to the New Viacom Business;

 

(ii)           any and all Liabilities that are set
forth in this Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as Liabilities to be retained or assumed by New Viacom or any other
member of the New Viacom Group, including, without limitation, those
Liabilities listed on Schedule 1.01(n) hereto;

 

(iii)          any and all Liabilities reflected on
the New Viacom Balance Sheet or the accounting records supporting such balance
sheet, subject to any discharge of such Liabilities subsequent to the date of
the New Viacom Balance Sheet;

 

(iv)          any and all Liabilities incurred by
Viacom or any of its Subsidiaries after the date of the New Viacom Balance
Sheet that would be reflected on a consolidated balance sheet of New Viacom and
the New Viacom Subsidiaries if it were prepared as of the Separation Date using
the same principles and accounting policies under which the New Viacom Balance
Sheet was prepared;

 

(v)           any and all Liabilities related to
the rights of an actor, director, writer, producer or other party to the
payment of any fixed or contingent compensation, including, without limitation,
royalties, participations, residuals and use payments and other similar
payments related to the production and dissemination by New Viacom of all CBS
theatrical product;

 

18

 

(vi)          all Insured CBS Liabilities, all
Insured CBS Losses, all Liabilities related to the New Viacom Litigation
Matters, all Liabilities related to Future New Viacom Litigation Matters and
50% of any Future Joint Litigation Matter;

 

(vii)         50% of any and all Liabilities under
applicable Laws (including, without limitation, federal and state securities
Laws) arising from or relating to the Registration Statement or any other
document filed with any Governmental Authority (including, without limitation,
the SEC) at or prior to the Separation Date by New Viacom or Viacom or any
Subsidiary of Viacom in connection with the Separation or Merger;

 

(viii)        50% of any and all Liabilities arising
from or relating to any claim, demand or Action with respect to the Separation
or the Merger made or brought by any Person against Viacom, CBS or New Viacom
or any member of their respective Groups;

 

(ix)           all Liabilities arising from or
relating to events that take place (A) on, before or after the Separation
Date involving any member of the New Viacom Group or (B) before the
Separation Date involving any member of the CBS Group, in any case only as and
to the extent related to the New Viacom Business;

 

(x)            any and all Liabilities as and to
the extent relating to, arising out of or resulting from any New Viacom Assets;

 

(xi)           50% of any and all Liabilities
relating to, arising from or involving a general corporate matter of Viacom or
Paramount Pictures Corporation, including, without limitation, (A) those
Liabilities set forth on Schedule 1.01(d), (B) Liabilities relating to
Unallocated Employees and (C) claims under federal and state securities Laws
and claims for breach of fiduciary duties, that relate to events that took
place prior to the Separation Date and, in any case, that are not otherwise
specified to be a CBS Liability or New Viacom Liability or otherwise
specifically allocated under this Agreement or any Ancillary Agreement;

 

(xii)          100% of any Insurance Charges arising
solely and directly from the New Viacom Business;

 

(xiii)         except to the extent they are otherwise
allocated to a member of the CBS Group or a member of the New Viacom Group or
otherwise specified to be a CBS Liability or New Viacom Liability under this
Agreement or any Ancillary Agreement, any and all Liabilities relating to,
arising from or involving any (A) predecessor of a New Viacom Business or (B)
terminated, divested or discontinued business, in each case that was operated
by any member of the New Viacom Group or that relates, or was related, to the
New Viacom Business or to any predecessor of a New Viacom Business or to any
member of the New Viacom Group; and

 

(xiv)        except as expressly provided for in this
Agreement or any Ancillary Agreement, any and all Liabilities as and to the
extent related to the New Viacom Business on the Separation Date and not
otherwise transferred to or retained by a member of the New Viacom Group as a New
Viacom Liability.  The intention of this
subparagraph (xiv) is only to rectify any inadvertent omission of transfer
or conveyance

 

19

 

of any Liability that, had
the parties given specific consideration to such Liability as of the Separation
Date, would have otherwise been classified as a New Viacom Liability.  No Liability shall be deemed to be a New
Viacom Liability solely as a result of this subparagraph (xiv) if such
Liability is expressly covered by the subject matter of an Ancillary
Agreement.  In addition, no member of the
CBS Group may claim that a Liability within the scope of this subparagraph
(xiv) should be a New Viacom Liability unless CBS submits to New Viacom a claim
with respect to the ownership of such Liability on or prior to the fifth
anniversary of the Separation Date;

 

provided, however, that
(1) ”New Viacom Liabilities” shall not include any Insured New Viacom
Liabilities and (2) ”New Viacom Liabilities” shall not include Liabilities
for Income Taxes or Capital Taxes, which are addressed in the Tax Matters
Agreement.

 

“New
Viacom Litigation Matters” means the Actions listed on Schedule 1.01(o)
hereto and any other Actions, claims or demands solely related to the New
Viacom Assets or New Viacom Liabilities commenced on or before the Separation
Date.

 

“New
Viacom Long-Term Management Incentive Plan” has the meaning set forth in
Section 6.07(b).

 

“New
Viacom Loss” means any Insured CBS Loss and any diminution in value,
injury, damage, loss or similar insurable event sustained by or in connection
with the New Viacom Business and covered or potentially covered under a Policy
providing property or other first-party insurance; provided, however,
New Viacom Loss does not include any Insured New Viacom Loss.

 

“New Viacom Obligations” has the
meaning set forth in Section 2.05(d).

 

“New
Viacom Subsidiary” means any entity controlled by New Viacom or of which
New Viacom shares equally in the control with another Person, in either case,
directly or indirectly through one or more intermediaries, after giving effect
to the Separation.

 

“New
Viacom Transferred 401(k) Plan Employees” has the meaning set forth in
Section 6.02(b)(i).

 

“New
Viacom Transferred Pension Employees” has the meaning set forth in Section
6.01(b).

 

“New
Viacom Welfare Plans” has the meaning set forth in Section 6.04(b).

 

“Owning
Party” has the meaning set forth in Section 3.03.

 

“Paramount”
means Paramount Pictures Corporation.

 

“Payment”
has the meaning set forth in Section 9.03(c).

 

“PBGC”
has the meaning set forth in Section 6.01(i).

 

20

 

“Person” means any individual,
partnership, firm, corporation, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under

Section 13(d)(3) of the Exchange Act.

 

“Policies”
means all property, casualty liability and other insurance and reinsurance
policies and programs providing insurance coverage to, and all Contracts
providing indemnification or rights of contribution in favor of, Viacom and its
Subsidiaries or their respective predecessors in effect on or at any time
before the Separation Date, including, without limitation, (i) insurance policies issued to
Viacom or any of its Subsidiaries or their respective predecessors; (ii)
reinsurance policies and retrocession and other agreements providing rights in
the nature of insurance or reinsurance to Viacom, any of its Subsidiaries or
their respective Predecessors, including, without limitation, policies of
reinsurance and retrocession agreements providing benefits to Woburn Insurance
Limited, Sammarnick Insurance Corporation and Central Fidelity Insurance
Company; (iii) insurance policies issued to any other Person to the extent
any such policy provides insurance coverage to Viacom or any of its
Subsidiaries or their respective predecessors as a named insured, additional
insured, additional named insured or otherwise by Contract or under Law; (iv) Contracts
relating to such Policies referenced in clauses (i), (ii) and (iii) immediately
above, including, without limitation, settlement agreements with the issuers of
such Policies; and (v) all Contracts providing indemnification or rights of
contribution in favor of Viacom, any of its Subsidiaries or their respective
predecessors.

 

“Prefunding Payments” has the meaning
set forth in Section 6.04(a)(ii).

 

“Pre-Separation
Claims Expenses” has the meaning set forth in Section 6.04(a)(ii).

 

“Pre-Separation
Liabilities” means any and all Liabilities that arose in or relate to
periods (or portions thereof) ending on or before the Separation Date other
than any amounts relating to Post-Separation Date Interest.

 

“Post-Separation
Date Interest” means interest relating to a period (or portion thereof)
after the Separation Date.

 

“Prior
Relationship” means the relationship between any member of the CBS Group
and any member of the New Viacom Group at any time prior to the Separation
Date.

 

“Prohibited
Cable Interest” has the meaning set forth in Section 2.09(b).

 

“Prohibited
Interest” has the meaning set forth
in Section 2.09(a).

 

“Providing
Party” has the meaning set forth in Section 3.04(a).

 

“Public
Filings” has the meaning set forth in Section 4.01(g).

 

“Quarterly
Financial Statements” has the meaning set forth in Section 4.01(c).

 

21

 

“Records”
means documents, files and other books and records, including, without
limitation, books and records relating to financial reporting, internal audit,
employee benefits, past acquisition or disposition transactions, claims,
demands or Actions, and email files and backup tapes regarding any of the
foregoing.

 

“Registration Statement” means the
registration statement on Form S-4 (Registration No. 333-128821), as
amended, filed with the SEC, pursuant to which the CBS Common Stock and the New
Viacom Common Stock to be distributed in the Merger have been registered under
the Securities Act.

 

“Related
Parties” has the meaning set forth in Section 3.04(a).

 

“Representatives”
means directors, officers, employees, agents, consultants, advisors,
accountants and attorneys, including, without limitation, representatives of
the foregoing.

 

“Requesting
Party” has the meaning set forth in Section 3.04(a).

 

“Required
Deadline” means, with respect to Section 4.01(b)(i) and (ii), two Business
Days before the date which CBS first notifies New Viacom will be the date on
which CBS is to issue its first public earnings release after the Separation
Date, provided that, for purposes of Section 4.01(b)(i) and (ii), the Required
Deadline shall not be earlier than February 20, 2006; and, with respect to
Section 4.01(b)(iii) and (iv), ten Business Days before CBS is required to file
with the SEC its Quarterly Report on Form 10-Q or Annual Report on Form 10-K,
as applicable, for the period in which the Separation Date occurs.

 

“Responsible
Party” has the meaning set forth in Section 8.01(d).

 

“Restrictions”
means restrictions or limitations set forth in a Governmental Order.

 

“Restructuring
Plan” means the restructuring plan comprised of the series of transactions,
agreements and other arrangements describing the manner in which the CBS Assets
and the CBS Liabilities and the New Viacom Assets and the New Viacom
Liabilities will be transferred between the parties hereto and their respective
Subsidiaries pursuant to this Agreement and the Ancillary Agreements, which are
set forth, described or contemplated in Schedule 1.01(p) hereto.

 

“Retention
Period” has the meaning set forth in Section 3.05(a).

 

“Revised
Pension Plan Transfer Amount” has the meaning set forth in
Section 6.01(d)(iv).

 

“Schedules”
means the schedules to this Agreement as they may be updated through the
Separation Date or as provided herein or therein.

 

“SEC”
means the Securities and Exchange Commission.

 

22

 

“Securities Act” means the
Securities Act of 1933, as amended, together with the rules and regulations
promulgated thereunder.

 

“Separation” has the meaning set
forth in the Recitals.

 

“Separation Date” means the date on
which the Effective Time (as defined in the Merger Agreement) occurs pursuant
to the Merger Agreement.

 

“Software”
means computer software, programs, databases and applications, whether in
source code, object code or other form, including, without limitation,
operating software, network software, Internet websites, web content and links,
all versions, updates, corrections, enhancements, replacements and
modifications thereof, and all documentation related thereto.

 

“Special
Dividend Amount” has the meaning set forth in Section 2.08(g).

 

“Subsidiaries”
means any and all corporations, partnerships, limited liability companies,
joint ventures, associations and other entities controlled by a Person directly
or indirectly through one or more intermediaries.

 

“Tax”
or “Taxes” means all federal, state, local or foreign taxes, including,
without limitation, corporate income taxes, property taxes, value added taxes,
gross receipts taxes, capital stock taxes, franchise taxes, stamp taxes, excise
taxes, occupation taxes, sales taxes, use taxes, alternative minimum taxes,
withholding taxes, social security taxes, unemployment taxes, other payroll
taxes and retirement dues or other similar taxes imposed by any Governmental
Authority or political subdivision thereof, and any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties, including, without limitation, any transferee or secondary Liability
in respect of any Tax (whether imposed by Law, contractual agreement or
otherwise) and any Liability in respect of any Tax as a result of being a
member of any affiliated, consolidated, combined, unitary or similar group.

 

“Tax
Basis” has the meaning set forth in Section 9.03(c).

 

“Tax
Contest” means a notice of deficiency, proposed adjustment, assessment,
inquiry, audit, examination, or any administrative or judicial proceeding
involving any matter relating to Taxes or Tax Returns.

 

“Tax Matters Agreement” means the
Tax Matters Agreement by and between Viacom and New Viacom to be entered into
in connection with the Separation, as the same may be amended from time to
time.

 

“Tax
Return” has the meaning set forth in the Tax Matters Agreement.

 

“Third Party Claim” has the meaning
set forth in Section 9.06(b).

 

“Transfer
Taxes” has the meaning set forth in the Tax Matters Agreement.

 

“Transferee”
has the meaning set forth in Section 2.12.

 

23

 

“Transferor”
has the meaning set forth in Section 2.12.

 

“Transferred
Account Balances” has the meaning set forth in Section 6.04(h)(i).

 

“Transition Services Agreement”
means the Transition Services Agreement by and between Viacom and New Viacom to
be entered into in connection with the Separation, as the same may be amended
from time to time.

 

“Transitional
Asset Transfers” has the meaning set forth in Section 6.01(b).

 

“Transitional
Cash Transfers” has the meaning set forth in Section 6.01(b).

 

“True-Up
Amount” has the meaning set forth in Section 6.01(d)(v).

 

“Unallocated
Employee” means an individual (i) who is a Former New Viacom Employee
described in clause (iii) of the definition thereof or Former CBS Employee
described in clause (iii) of the definition thereof or (ii) whose most
recent active employment with Viacom prior to the Separation was with the
Viacom corporate office or the Paramount corporate office and whose employment
terminated prior to the Separation Date (other than a Former New Viacom
Employee described in clause (v) thereof or a Former CBS Employee described in
clause (vi) thereof).

 

“Unexhausted
Insurance Charges” has the meaning set forth in Section 5.01(m).

 

“Viacom”
has the meaning set forth in the Preamble.

 

“Viacom
Class A Common Stock” has the meaning set forth in the Recitals.

 

“Viacom
Common Stock” has the meaning set forth in the Recitals.

 

“Viacom
Commuter Reimbursement Plan” has the meaning set forth in Section
6.04(h)(ii).

 

“Viacom
Defined Benefit Pension Plans” means the Viacom Pension Plan, CBS Combined
Pension Plan, Charter Company Retirement Plan, Infinity Broadcasting Corp.
Pension Plan, Viacom Television Stations Group of San Francisco Inc. Retirement
Plan for Television Technicians, Westinghouse Pension Plan for Operations in
Puerto Rico and Viacom Outdoor Group Inc. Pension Plan for Designated Hourly
Employees.

 

“Viacom
Employee Benefit Plans” means all “employee benefit plans” (within the
meaning of Section 3(3) of ERISA), “multiemployer plans” (within the meaning of
Section 3(37) of ERISA), retirement, pension, savings, profit-sharing,
welfare, stock purchase, stock option, equity-based, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans, agreements,
programs, policies or other arrangements (including, without limitation, any
funding mechanisms therefor), whether or not subject to ERISA, whether formal
or informal, oral or written, legally binding or not, sponsored, maintained or
contributed to by Viacom or any of its

 

24

 

Subsidiaries
(or to which Viacom or any of its Subsidiaries contributes or is required to
contribute) immediately prior to the Separation Date.

 

“Viacom
Employee Benefit Records” means all agreements, documents, books, records
or files relating to the Viacom Employee Benefit Plans.

 

“Viacom
Equity Compensation Plans” means any of the Viacom 1994 Long-Term Management Incentive Plan, Viacom 1997
Long-Term Management Incentive Plan, Viacom 2000 Long-Term Management Incentive
Plan, Viacom 2004 Long-Term Management Incentive Plan, Viacom Senior Executive
Short-Term Incentive Plan, CBS 1991 Long-Term Incentive Plan, CBS 1993
Long-Term Incentive Plan, CBS Corporation Fund the Future Stock Option Program,
Infinity Broadcasting Corporation 1998 Long-Term Incentive Plan, Infinity
Broadcasting Corporation 1999 Long-Term Incentive Plan, Infinity Broadcasting
Corporation Stock Option Plan, Infinity Broadcasting Corporation Warrant
Certificate for Mel Karmazin, BET Holdings II, Inc. 1998 Executive Stock Option
Plan, Stock Option Agreements between Harpo, Inc. and O. Winfrey, D. Pattison,
D. Hudson, T. Bennett and J. Jacobs, King World Productions, Inc. and its
Subsidiaries 1998 Stock Option and Restricted Stock Purchase Plan, King World
Productions, Inc. and its Subsidiaries 1996 Stock Option and Restricted Stock
Purchase Plan, King World Productions, Inc. and Subsidiaries Salesforce Bonus
Plan, Gaylord Entertainment Company Amended and Restated 1993 Stock Option and
Incentive Plan, Gaylord Entertainment Company Amended and Restated 1991 Stock
Option and Incentive Plan, Outdoor Systems, Inc. 1996 Omnibus Plan,
Westinghouse Electric Corporation 1993 Long-Term Incentive Plan and any other
equity-based compensation plan of Viacom, each as in effect immediately prior
to the Separation.

 

“Viacom
Executive Benefit Plans” means the Viacom Excess 401(k) Plan, Viacom Excess
401(k) Plan for Designated Senior Executives, Viacom Bonus Deferral Plan,
Viacom Bonus Deferral Plan for Designated Senior Executives, Viacom Excess
Pension Plan, CBS Supplemental Executive Retirement Plan, CBS Bonus
Supplemental Executive Retirement Plan, CBS Supplemental Employee Investment
Fund, Westinghouse Executive Pension Plan, Paramount Non-Qualified Retirement
Plan, Paramount Communications Inc. Supplemental Executive Retirement Plan,
pension benefits payable under the Viacom Inc. Executive Severance Plan for
Vice Presidents or the Viacom Inc. Executive Severance Plan for Senior Vice
Presidents and any other executive benefit plan of Viacom or related
contractual arrangements, each as in effect immediately prior to the
Separation.

 

“Viacom
Flexible Benefit Plan” means the Viacom FSA Plan, as in effect as of the
time relevant to the applicable provision of this Agreement.

 

“Viacom
Merger Sub” has the meaning set forth in the Recitals.

 

“Viacom
Non-U.S. Benefit Plan” means any plan, policy, program, practice,
arrangement, Contract, trust, insurance policy or other agreement maintained by
Viacom for the benefit of employees who are compensated under a payroll which
is administered outside the United States, its territories and possessions, and
the District of Columbia.

 

“Viacom
Pension Plan” means the Viacom Pension Plan.

 

25

 

“Viacom
Plus” means that group of employees of Viacom currently doing business as “Viacom
Plus.”

 

“Viacom
Welfare Plans” means all Viacom Employee Benefit Plans that are “welfare
plans” within the meaning of Section 3(1) of ERISA, including, without
limitation, plans providing for post-retirement health and life insurance
benefits or COBRA benefits.

 

ARTICLE
II

 

THE SEPARATION

 

Section 2.01           Transfer
of Assets.

 

(a)           Transfer of New Viacom Assets.  In accordance with the Restructuring Plan, on
the terms and subject to the conditions set forth in this Agreement and
pursuant to the Implementation Agreements, on or prior to the Separation Date,
Viacom shall, and shall cause the applicable CBS Subsidiaries to, contribute,
distribute, assign, transfer, convey, license and deliver to the applicable
member of the New Viacom Group, and the applicable member of the New Viacom
Group shall accept from Viacom and the CBS Subsidiaries, all of Viacom’s and
the CBS Subsidiaries’ respective rights, title and interest, if any, in and to
all New Viacom Assets; provided, however, that the Deferred
Transfer Assets shall not be contributed, distributed, assigned, transferred,
conveyed, licensed or delivered on or
prior
to the Separation Date.  Any Deferred
Transfer Asset which is a New Viacom Asset shall be deemed to have been
contributed, distributed, assigned, transferred, conveyed, licensed or
delivered pursuant to this Section 2.01(a) on the Separation Date upon its
actual contribution, distribution, assignment, transfer, conveyance, license or
delivery to a member of the New Viacom Group as contemplated
in Section 2.11(a) hereof.

 

(b)           Transfer of CBS Assets.  In accordance with the Restructuring Plan, on
the terms and subject to the conditions set forth in this Agreement and
pursuant to the Implementation Agreements, on or prior to the Separation Date,
New Viacom shall, and shall cause the applicable New Viacom Subsidiaries to,
contribute, distribute, assign, transfer, convey, license and deliver to Viacom
or the applicable member of the CBS Group, and Viacom or the applicable member
of the CBS Group shall accept from New Viacom and the New Viacom Subsidiaries,
all of New Viacom’s and the New Viacom Subsidiaries’ respective rights, title
and interest, if any, in and to all CBS Assets; provided, however,
that the Deferred Transfer Assets shall not be contributed, distributed,
assigned, transferred, conveyed, licensed or delivered on or prior to the
Separation Date.  Any Deferred Transfer
Asset which is a CBS Asset will be deemed to have been contributed, distributed,
assigned, transferred, conveyed, licensed or delivered pursuant to this Section
2.01(b) on the Separation Date upon its actual contribution, distribution,
assignment, transfer, conveyance, license or delivery to a member of the CBS
Group as contemplated in Section 2.11(a) hereof.

 

Section 2.02           Assumption
of Liabilities.

 

(a)           Assumption of New Viacom
Liabilities.  In accordance with the
Restructuring Plan, on the terms and subject to the conditions set forth in
this Agreement and pursuant to the

 

26

 

Implementation Agreements, on or prior
to the Separation Date, New Viacom shall, and shall cause the applicable
members of the New Viacom Group to, accept, assume (or, as applicable, retain)
and perform, discharge and fulfill, in accordance with their respective terms,
all the New Viacom Liabilities.  New
Viacom shall thereafter be responsible for all New Viacom Liabilities,
regardless of (i) when or where such Liabilities arose or arise, (ii) whether
the facts upon which they are based occurred prior to, on or subsequent to the
Separation Date and (iii) where or against whom such Liabilities are
asserted or determined.  Any Deferred
Transfer Liability which is a New Viacom Liability will be deemed to have been
accepted or assumed pursuant to this Section 2.02(a) on the Separation
Date upon its actual acceptance or assumption by a member of the New Viacom
Group.

 

(b)           Assumption
of CBS Liabilities.  In accordance with
the Restructuring Plan, on the terms and subject to the conditions set forth in
this Agreement and pursuant to the Implementation Agreements, on or prior to
the Separation Date, Viacom shall, and shall cause the applicable members of
the CBS Group to, accept, assume (or, as applicable, retain) and perform,
discharge and fulfill, in accordance with their respective terms, all the CBS
Liabilities.  CBS shall thereafter be
responsible for all CBS Liabilities, regardless of (i) when or where such
Liabilities arose or arise, (ii) whether the facts upon which they are based
occurred prior to, on or subsequent to the Separation Date and (iii) where
or against whom such Liabilities are asserted or determined.  Any Deferred Transfer Liability which is a
CBS Liability will be deemed to have been accepted or assumed pursuant to this
Section 2.02(b) on the Separation Date upon its actual acceptance or assumption
by a member of the CBS Group.

 

(c)           Notwithstanding
anything in this Agreement to the contrary, the foregoing, the rights, duties
and obligations of the members of the New Viacom Group and the members of the
CBS Group with respect to Insured New Viacom Liabilities, Insured New Viacom
Losses, Insured CBS Liabilities and Insured CBS Losses shall be governed by
Section 5.01.

 

Section 2.03           Mixed
Contracts.

 

(a)           Unless CBS and New Viacom otherwise
agree, (i) any Contract that is a New Viacom Asset but inures to the benefit or
burden of any member of the CBS Group (including, without limitation, those
Contracts listed on Schedule 2.03(a)(i)) or that is a CBS Asset but inures to
the benefit or burden of any member of the New Viacom Group (including, without
limitation, those Contracts listed on Schedule 2.03(a)(ii)) (each, a “Mixed
Contract”) shall be assigned in part to the applicable member(s) of the
other Group, if so assignable, prior to, on or after the Separation Date, so
that each party or the members of their respective Groups shall be entitled to
the rights and benefits, and shall assume the related portion of any
Liabilities, inuring to their respective businesses; provided, however,
that in no event shall any member of either Group be required to assign any
Mixed Contract in its entirety
or to assign a portion of any Mixed Contract (including, without limitation,
any Policy) which is not assignable by its terms (including, without
limitation, any terms imposing consents or conditions on an assignment where
such consents or conditions have not been obtained or fulfilled) and (ii) if
any Mixed Contract cannot be so partially assigned by its terms or otherwise,
or if such assignment would impair the benefit the parties thereto derive from
such Mixed Contract, CBS and New Viacom shall, and shall cause each of their
respective Subsidiaries to, take such other reasonable and permissible actions
to cause:  (A) a member of the New
Viacom Group to receive the benefit of

 

27

 

that portion of each Mixed Contract
that relates to the New Viacom Business (to the extent so related) as if such
Mixed Contract had been assigned to a member of the New Viacom Group pursuant
to this Section 2.03 and to bear the burden of the corresponding Liabilities as
if such Liabilities had been assumed by a member of the New Viacom Group
pursuant to this Section 2.03, and (B) a member of the CBS Group to
receive the benefit of that portion of each Mixed Contract that relates to the
CBS Business as if such Mixed Contract had been assigned to a member of the CBS
Group pursuant to this Section 2.03 and to bear the burden of the corresponding
Liabilities as if such Liabilities had been assumed by a member of the CBS
Group pursuant to this Section 2.03. 
Each of New Viacom and CBS shall, and shall cause the members of its
Group to, (i) treat for all Income Tax purposes the portion of each Mixed
Contract inuring to their respective businesses as Assets owned by, or
Liabilities of, such party as of the Separation Date and (ii) neither report
nor take any Income Tax position (on a Tax Return or otherwise) inconsistent
with such treatment (unless required by a change in applicable Tax Law or good faith
resolution of a Tax Contest relating to Income Taxes).

 

(b)           Nothing in paragraph (a) above
shall require any member of either Group to make any material payment (except to the extent advanced, assumed or agreed
in advance to be reimbursed by any member of the other Group),
incur any material obligation or grant any material concession on behalf of any
member of the other Group in
order to effect any transaction contemplated by paragraph (a) above.

 

Section 2.04           Intercompany
Accounts.

 

(a)           On or before the Separation Date, CBS
and New Viacom shall settle in the manner set forth in the Restructuring Plan
all Intercompany Balances, other than those Intercompany Balances that relate
to business-to-business trade payables and receivables arising in the ordinary
course of business of a member of the CBS Group, on the one hand, and a member
of the New Viacom Group, on the other hand, which shall be governed by Section
2.04(b).

 

(b)           Following the Separation Date,
members of the CBS Group, on the one hand, and members of the New Viacom Group,
on the other hand, shall pay in accordance with past practice all Intercompany
Balances that relate to business-to-business trade payables and receivables
arising in the ordinary course of business and were incurred on or prior to the
Separation Date.

 

Section 2.05           Substitution
of Obligors.

 

(a)            With respect to CBS Liabilities
(other than Liabilities arising under CBS Litigation Matters, Future CBS
Litigation Matters and Future Joint Litigation Matters, which are addressed in
Section 8.01) for which a member of the New Viacom Group may be liable under a
Contract as guarantor, assignor, original tenant, primary obligor or otherwise
(the “CBS Obligations”), including, without limitation, those set forth
on Schedule 2.05(a):

 

(i)            With respect to the CBS Obligations
set forth on Schedule 2.05(a)(i), CBS and New Viacom shall use reasonable
efforts to terminate the Liabilities of, and to obtain in writing the
unconditional release of, the relevant member(s) of the New Viacom

 

28

 

Group, or to cause a
member(s) of the CBS Group to be substituted in all respects for the relevant
member(s) of the New Viacom Group, so that, in any such case, members of the
CBS Group will be solely responsible under the terms of the applicable Contract
for such CBS Obligations; provided, however, that any such
termination, release or substitution must be effected pursuant to documentation
reasonably satisfactory in form and substance to the Chief Financial Officer or
the Treasurer of New Viacom.  Except as
agreed pursuant to the preceding sentence, New Viacom shall not, and shall
cause the members of its Group not to, seek to obtain any such termination,
release or substitution.  If CBS is
requested to pay a fee or provide other consideration to obtain such a
termination, release or substitution and CBS refuses to pay such fee or provide
such other consideration, CBS must notify New Viacom of the request and of its
refusal as soon as reasonably practicable and New Viacom shall be entitled to
make such payment or provide such other consideration on behalf of CBS.

 

(ii)           If such a termination, release or
substitution is not effected by the Separation Date, then from and after the
Separation Date,

 

(A)          without the prior written consent of
the Chief Financial Officer or the Treasurer of New Viacom, CBS shall not, and
shall cause the members of the CBS Group not to, renew or extend the term of,
increase its obligations under, or transfer to a third party, any loan, Contract
or other obligation for which any member of the New Viacom Group is or may be
liable thereunder unless all obligations of the New Viacom Group with respect
thereto are thereupon terminated by documentation reasonably satisfactory in
form and substance to the Chief Financial Officer or the Treasurer of New
Viacom; provided that the limitations in this clause (ii)(A) shall not
apply,

 

(1)                                            with
respect to the renewal or extension of the term of any lease of real property
pursuant to the terms thereto; provided that, with respect to any CBS Obligation listed on Schedule
2.05(a)(i), CBS shall seek the termination, release or substitution provided
for in clause (a)(i) above in connection with seeking any such renewal or
extension to the extent that seeking such termination, release or substitution
would not, in CBS’s good faith discretion, have adverse consequences to any
member of the CBS Group; provided  further that, CBS shall only be
required to seek such termination, release or substitution in connection with
the first such renewal or extension,

 

(2)                                            in
the event that a member of the CBS Group obtains a letter of credit for the
benefit of New Viacom in an amount and from a financial institution reasonably
acceptable to New Viacom with respect to the obligation for which a member of
the New Viacom Group is liable and New Viacom has no material obligation under
such loan, Contract or other obligation other than the financial obligation
which is the subject of such letter of credit,

 

29

 

(3)                                            in
the case of a transfer of such loan, Contract or other obligation to a third
party, if

 

a.               CBS or a member of
the CBS Group remains liable for all of the obligations and Liabilities it
would have been liable for under such loan, Contract or other obligation had
such transfer not occurred; and

 

b.              the third party
transferee agrees in writing to be bound by the restrictions of this clause
(ii)(A) and the obligations under Section 2.05(b) as if it were a member
of the CBS Group; provided that, if, after using reasonable efforts, CBS
is unable to obtain the agreement of any such transferee to comply with the
terms and conditions of this (ii)(A)(3)(b), CBS shall be entitled to effect
such transfer without giving effect to this clause (ii)(A)(3)(b) with the prior
written consent of the Chief Financial Officer or the Treasurer of New Viacom,
which consent shall not be unreasonably withheld or delayed; and

 

(B)           without the prior written consent of
the Chief Financial Officer or the Treasurer of CBS, no member of the New
Viacom Group shall renew or extend the term of, increase its obligations under,
or transfer to a third party, any loan, Contract or other obligation for which
any member of the CBS Group is or may be liable under this Agreement.

 

(b)           For so long as any member of the New
Viacom Group may be liable as guarantor, assignor, original tenant, primary
obligor or otherwise under a Contract for a CBS Obligation, (i) within five (5)
days after receipt thereof, CBS and New Viacom shall promptly provide to each
other copies of any and all notices of default with respect to any CBS
Obligations received by any member of their respective Group and (ii) within
ten (10) days following the execution by any member of either Group of any notice
or agreement providing for the renewal or extension of any loan, Contract or
other obligation underlying a CBS Obligation or any other amendment or
modification of such loan, Contract or other obligation (or as soon thereafter
as practicable following receipt thereof from the applicable counterparty) in
accordance with subparagraph (a)(ii), New Viacom and CBS shall provide each
other with a copy of any such notice, agreement, amendment or
modification.  Each of New Viacom and CBS
shall also promptly provide to each other any additional information in
connection with such renewal, extension, amendment or modification as such
other party may reasonably request.

 

(c)           CBS shall update Schedule 2.05(a) to
reflect any CBS Obligations inadvertently omitted from Schedule 2.05(a) or as
to which a member of the New Viacom Group is no longer liable, including,
without limitation, to the extent New Viacom notifies CBS of the need for such
updates, and deliver an electronic copy thereof to New Viacom within 20 Business
Days of the end of each calendar year through the date on which no member of
the New Viacom Group is liable for any CBS Obligations.

 

(d)           With respect to New Viacom
Liabilities (other than Liabilities arising under New Viacom Litigation
Matters, Future New Viacom Litigation Matters and Future Joint

 

30

 

Litigation Matters, which are addressed
in Section 8.01) for which a member of the CBS Group may be liable under a
Contract as guarantor, assignor, original tenant, primary obligor or otherwise
(the “New Viacom Obligations”), including, without limitation, those set
forth on Schedule 2.05(d):

 

(i)            With respect to the New Viacom
Obligations set forth on Schedule 2.05(d)(i), New Viacom and CBS shall use
reasonable efforts to terminate the Liabilities of, and to obtain in writing
the unconditional release of, the relevant member(s) of the CBS Group, or to
cause a member(s) of the New Viacom Group to be substituted in all respects for
the relevant member(s) of the CBS Group, so that, in any such case, members of
the New Viacom Group will be solely responsible under the terms of the
applicable Contract for such New Viacom Obligations; provided, however,
that any such termination, release or substitution must be effected pursuant to
documentation reasonably satisfactory in form and substance to the Chief
Financial Officer or the Treasurer of CBS. 
Except as agreed pursuant to the preceding sentence, CBS shall not, and
shall cause the members of its Group not to, seek to obtain any such
termination, release or substitution.  If
New Viacom is requested to pay a fee or provide other consideration to obtain
such a termination, release or substitution and New Viacom refuses to pay such
fee or provide such other consideration, New Viacom must notify CBS of the
request and of its refusal as soon as reasonably practicable and CBS shall be
entitled to make such payment or provide such other consideration on behalf of
New Viacom.

 

(ii)           If such a termination, release or
substitution is not effected by the Separation Date, then from and after the
Separation Date,

 

(A)          without the prior written consent of
the Chief Financial Officer or the Treasurer of CBS, New Viacom shall not, and
shall cause the members of its Group not to, renew or extend the term of,
increase its obligations under, or transfer to a third party, any loan,
Contract or other obligation for which any member of the CBS Group is or may be
liable thereunder unless all obligations of the CBS Group with respect thereto
are thereupon terminated by documentation reasonably satisfactory in form and
substance to the Chief Financial Officer or the Treasurer of CBS; provided
that the limitations in this clause (ii)(A) shall not apply,

 

(1)                                            with
respect to the renewal or extension of the term of any lease of real property
pursuant to the terms thereto; provided that, with respect to any New Viacom Obligation listed on Schedule
2.05(d)(i), New Viacom shall seek the termination, release or substitution
provided for in clause (d)(i) above in connection with seeking any such renewal
or extension to the extent that seeking such termination, release or
substitution would not, in New Viacom’s good faith discretion, have adverse
consequences to any member of the New Viacom Group; provided  further
that, New Viacom shall only be required to seek such termination, release or
substitution in connection with the first such renewal or extension,

 

31

 

(2)                                            in
the event that a member of the New Viacom Group obtains a letter of credit for
the benefit of CBS in an amount and from a financial institution reasonably
acceptable to CBS with respect to the obligation for which a member of the CBS
Group is liable and CBS has no material obligation under such loan, Contract or
other obligation other than the financial obligation which is the subject of
such letter of credit,

 

(3)                                            in
the case of a transfer of such loan, Contract or other obligation to a third
party, if

 

a.               New Viacom or a
member of the New Viacom Group remains liable for all of the obligations and
Liabilities it would have been liable for under such loan, Contract or other
obligation had such transfer not occurred; and

 

b.              the third party
transferee agrees in writing to be bound by the restrictions of this clause
(ii)(A) and the obligations under Section 2.05(e) as if it were a member
of the New Viacom Group; provided that, if, after using reasonable
efforts, New Viacom is unable to obtain the agreement of any such transferee to
comply with the terms and conditions of this (ii)(A)(3)(b), New Viacom shall be
entitled to effect such transfer without giving effect to this clause
(ii)(A)(3)(b) with the prior written consent of the Chief Financial Officer or
the Treasurer of CBS, which consent shall not be unreasonably withheld or
delayed; and

 

(B)           without the prior written consent of
the Chief Financial Officer or the Treasurer of New Viacom, no member of the
CBS Group shall renew or extend the term of, increase its obligations under, or
transfer to a third party, any loan, Contract or other obligation for which any
member of the New Viacom Group is or may be liable under this Agreement.

 

(e)           For so long as any member of the CBS
Group may be liable as guarantor, assignor, original tenant, primary obligor or
otherwise under a Contract for a New Viacom Obligation, (i) within five (5)
days after receipt thereof, CBS and New Viacom shall promptly provide to each
other copies of any and all notices of default with respect to any New Viacom
Obligations received by any member of their respective Group and (ii) within
ten (10) days following the execution by any member of either Group of any
notice or agreement providing for the renewal or extension of any loan,
Contract or other obligation underlying a New Viacom Obligation or any other
amendment or modification of such loan, Contract or other obligation (or as
soon thereafter as practicable following receipt thereof from the applicable
counterparty) in accordance with subparagraph (d)(ii), New Viacom and CBS shall
provide each other with a copy of any such notice, agreement, amendment or
modification.  Each of New Viacom and CBS
shall also promptly provide to each other any additional information in
connection with such renewal, extension, amendment or modification as such
other party may reasonably request.

 

32

 

(f)            New Viacom shall update Schedule
2.05(d) to reflect any New Viacom Obligations inadvertently omitted from such
Schedule 2.05(d) or as to which a member of the CBS Group is no longer liable,
including, without limitation, to the extent CBS notifies New Viacom of the
need for such updates, and deliver an electronic copy to CBS within 20 Business
Days of the end of each calendar year through the date on which no member of
the CBS Group is liable for any New Viacom Obligations.

 

(g)           Following the Separation Date, (i)
CBS agrees to perform all obligations and to comply with all covenants under
the Contracts and loans relating to the CBS Obligations as if it were the
guarantor, assignor, original tenant, primary obligor or otherwise in respect
of such CBS Obligations and to use its reasonable best efforts to enforce the
provisions related to the CBS Obligations that benefit New Viacom at the
direction of New Viacom, and New Viacom agrees to use its reasonable best
efforts to enforce the provisions under the Contracts related to the CBS
Obligations that benefit CBS at the direction of CBS and (ii) New Viacom agrees
to perform all obligations and to comply with all covenants under the Contracts
and loans relating to the New Viacom Obligations as if it were the guarantor,
assignor, original tenant, primary obligor or otherwise in respect of such New
Viacom Obligations and to use its reasonable best efforts to enforce the provisions
under the Contracts related to the New Viacom Obligations that benefit CBS at
the direction of CBS, and CBS agrees to use its reasonable best efforts to
enforce the provisions related to the New Viacom Obligations that benefit New
Viacom at the direction of New Viacom.  To the extent that the terms of any applicable CBS
Obligation provide that any member of the New Viacom Group shall have a payment
or other similar obligation in respect of such CBS Obligation, New Viacom shall
be entitled to demand that CBS make such payment directly to the Person or
entity entitled thereto or directly satisfy such similar obligation, provided
that doing so is not in violation of the terms of the applicable CBS Obligation
or does not jeopardize or diminish the benefits of such CBS Obligation.  Similarly, to the extent that the terms of
any applicable New Viacom Obligation provide that any member of the CBS Group
shall have a payment or other similar obligation in respect of such New Viacom
Obligation, CBS shall be entitled to demand that New Viacom make such payment
directly to the Person or entity entitled thereto or directly satisfy such
similar obligation, provided that doing so is not in violation of the terms of
the applicable New Viacom Obligation or does not jeopardize or diminish the
benefits of such New Viacom Obligation.

 

(h)           Each of New Viacom and CBS shall, and
shall cause the members of its Group to, (i) treat for all Income Tax purposes
each of the New Viacom Obligations and the CBS Obligations as liabilities of
the appropriate member of the New Viacom Group or the CBS Group, respectively,
as of the Separation Date and (ii) neither report nor take any Income Tax
position (on a Tax Return or otherwise) inconsistent with such treatment
(unless required by a change in applicable Tax Law or good faith resolution of
a Tax Contest relating to Income Taxes).

 

Section 2.06           Transfer
Documents.

 

(a)           In furtherance of the contribution,
assignment, transfer and conveyance of the New Viacom Assets and the acceptance
and assumption of New Viacom Liabilities provided for in this Agreement, on or
prior to the Separation Date or as promptly as practicable thereafter:

 

33

 

(i)            CBS shall execute and deliver, and
shall cause the CBS Subsidiaries to execute and deliver, to New Viacom and the
New Viacom Subsidiaries, such bills of sale, stock powers, special or limited
warranty deeds, assignments of Contracts and other instruments of transfer,
conveyance and assignment as and to the extent necessary to evidence the
transfer, conveyance and assignment to New Viacom and the New Viacom
Subsidiaries of all of CBS’s and the CBS Subsidiaries’ right, title and
interest in and to the New Viacom Assets;

 

(ii)           New Viacom shall execute and deliver,
and shall cause the New Viacom Subsidiaries to execute and deliver, to CBS and
the CBS Subsidiaries such instruments of assumption as and to the extent
necessary to evidence the valid and effective assumption by New Viacom and the
New Viacom Subsidiaries of the New Viacom Liabilities; and

 

(iii)          New Viacom shall record, to the extent
it is customary to do so, all instruments evidencing the transfer of the New
Viacom Assets and, subject to Schedule 2.06(a), New Viacom and CBS shall share
equally the cost of all Transfer Taxes with respect to such New Viacom Assets.

 

(b)           In furtherance of the assignment,
transfer and conveyance of the CBS Assets and the acceptance and assumption of
the CBS Liabilities provided for in this Agreement, on or prior to the Separation
Date or as promptly as practicable thereafter,

 

(i)            New Viacom shall execute and
deliver, and shall cause the New Viacom Subsidiaries to execute and deliver, to
CBS and the CBS Subsidiaries, such bills of sale, stock powers, special or
limited warranty deeds, assignments of Contracts and other instruments of
transfer, conveyance and assignment as and to the extent necessary to evidence
the transfer, conveyance and assignment to CBS and the CBS Subsidiaries of all
of New Viacom’s and the New Viacom Subsidiaries’ right, title and interest in
and to the CBS Assets;

 

(ii)           CBS shall execute and deliver, and
cause the CBS Subsidiaries to execute and deliver, to New Viacom and the New
Viacom Subsidiaries such instruments of assumption as and to the extent necessary
to evidence the valid and effective assumption by CBS and the CBS Subsidiaries
of the CBS Liabilities; and

 

(iii)          CBS shall record, to the extent it is
customary to do so, all instruments evidencing the transfer of the CBS Assets
and, subject to Schedule 2.06(b), CBS and New Viacom shall share equally the
cost of all Transfer Taxes with respect to such CBS Assets.

 

Section 2.07           Ancillary
Agreements.

 

(a)           Effective on or prior to the
Separation Date, the parties shall execute and deliver the Tax Matters
Agreement, the Transition Services Agreement, the written Intercompany
Agreements not already executed, the License Agreements and any other
Implementation Agreements required to effect the Separation.

 

34

 

(b)           On or before the Separation Date:

 

(i)            CBS shall deliver to New Viacom the
resignation, effective as of the Separation Date, of each Person who is an
officer or a director of any member of the New Viacom Group immediately prior
to the Separation Date and who will be an employee or officer of any member of
the CBS Group immediately after the Separation Date other than the individuals
listed on Schedule 2.07(b).

 

(ii)           New Viacom shall deliver to CBS the
resignation, effective as of the Separation Date, of each Person who is an
officer or a director of any member of the CBS Group immediately prior to the
Separation Date and who will be an employee or officer of any member of the New
Viacom Group immediately after the Separation Date other than the individuals
listed on Schedule 2.07(b).

 

Section 2.08           Special
Dividend.

 

(a)           Not less than five days prior to the
Separation Date, Viacom shall have calculated the Estimated Special Dividend
Amount and shall have prepared a schedule in the form attached hereto as
Schedule 2.08(a) (the “Estimated Calculation Statement”) setting forth
such good faith calculation of the Estimated Special Dividend Amount.  The board of directors of New Viacom shall,
in accordance with the Bylaws of New Viacom and the Delaware General
Corporation Law, declare a dividend to Viacom, as the sole stockholder of New
Viacom, in the amount of the Estimated Special Dividend Amount, subject to
adjustment pursuant to Section 2.08(e) hereof, and cause the Estimated Special
Dividend Amount to be paid to Viacom not later than the last Business Day prior
to the Separation Date.

 

(b)           As promptly as practicable, but no
later than 75 days after the Separation Date, CBS shall prepare and deliver to
New Viacom a schedule in the form attached hereto as Schedule 2.08(a) setting
forth CBS’s good faith calculation of the Special Dividend Amount (the “Initial
Calculation Statement”), together with detailed backup supporting such
calculation.  During the 45 days
immediately following New Viacom’s receipt of the Initial Calculation
Statement, New Viacom and its Representatives will be permitted to review CBS’s
books and records relating to the Initial Calculation Statement and CBS’s
calculation of the Special Dividend Amount, and CBS shall reasonably make
available to New Viacom and its Representatives the individuals responsible for
the preparation of the Initial Calculation Statement in order to respond to the
inquiries of New Viacom and its Representatives.

 

(c)           New Viacom shall notify CBS in
writing (the “Notice of Disagreement”) within 45 days after receiving
the Initial Calculation Statement if New Viacom disagrees with CBS’s good faith
calculation of the Special Dividend Amount, which Notice of Disagreement shall
set forth in reasonable detail the basis for such dispute and the U.S. Dollar
amounts involved and New Viacom’s good faith estimate of the Special Dividend
Amount.  If the Special Dividend Amount
set forth on both the Initial Calculation Statement and the Notice of
Disagreement is greater than the Estimated Special Dividend Amount, then New
Viacom shall pay to CBS the undisputed amount of such excess in immediately
available funds, and if the

 

35

 

Special Dividend Amount set forth on
both the Initial Calculation Statement and the Notice of Disagreement is less
than the Estimated Special Dividend amount, then CBS shall pay to New Viacom
the undisputed amount of such deficit in immediately available funds, in either
case within 5 Business Days after delivery of the Notice of Disagreement by New
Viacom (the amount of any such payment by New Viacom or CBS being an “Undisputed
Amount” ).  If no Notice of
Disagreement is received by CBS within such 45-day period, then the Initial
Calculation Statement shall be deemed to have been accepted by New Viacom,
shall become final and binding upon the parties, and as such shall be the Final
Calculation Statement.

 

(d)           During the 20 days immediately
following the delivery of a Notice of Disagreement, New Viacom and CBS shall
seek in good faith to resolve any differences that they may have with respect
to any matter specified in the Notice of Disagreement.  If at the end of such 20-day period New
Viacom and CBS have been unable to agree upon the Special Dividend Amount, New
Viacom and CBS shall submit to Deloitte & Touche LLP or, if Deloitte &
Touche LLP is not at that time independent of both New Viacom and CBS, to an
independent public accounting firm that is acceptable to both New Viacom and
CBS (in either case, the “Independent Decisionmaker”) for review and
resolution any and all matters that remain in dispute with respect to the
Notice of Disagreement.  The Independent
Decisionmaker shall make a determination, which shall be final and binding on
the parties hereto, of the Special Dividend Amount within 20 days, and such
final determination shall be the Final Calculation Statement.  The cost of the Independent Decisionmaker’s
review and determination shall be paid one-half by New Viacom and one-half by
CBS.  During the 20-day review by the
Independent Decisionmaker, New Viacom and CBS will each make available to the
Independent Decisionmaker such individuals and such information, books and
records as may be required by the Independent Decisionmaker to make its final
determination.

 

(e)           (i) If the Special Dividend Amount
(as set forth in the Final Calculation Statement) exceeds the Estimated Special
Dividend Amount, then New Viacom shall pay to CBS an amount equal to such
excess in immediately available funds (less any Undisputed Amount previously
paid by New Viacom in accordance with Section 2.08(c)), and (ii) if the
Estimated Special Dividend Amount exceeds the Special Dividend Amount (as set
forth in the Final Calculation Statement), then CBS shall pay to New Viacom an
amount equal to such excess in immediately available funds (less any Undisputed
Amount previously paid by CBS in accordance with Section 2.08(c)), in either
case within 5 Business Days after the Final Calculation Statement becomes final
and binding on the parties hereto.  If
the Special Dividend Amount (as set forth in the Final Calculation Statement)
is equal to the Estimated Special Dividend Amount, then neither New Viacom nor
CBS shall owe any amount to the other party pursuant to this Section 2.08.

 

(f)            Each of New Viacom and CBS agrees
that following the Separation Date and through the date that payment, if any,
is made pursuant to Section 2.08(e), it will not take any actions with respect
to any accounting books, records, policy or procedure on which the Initial
Calculation Statement or the Final Calculation Statement is to be based that
are inconsistent with past practices of Viacom or that would make it impossible
or impracticable to calculate the Special Dividend Amount in the manner and
utilizing the methods required hereby.

 

(g)           For purpose of this Section 2.08:

 

36

 

“Estimated Special Dividend Amount” means
Viacom’s preliminary good faith estimate of the Special Dividend Amount.

 

“Final Calculation
Statement” means the calculation of the Special Dividend Amount that is
final and binding on New Viacom and CBS, in the manner set forth in this
Section 2.08.

 

“Special
Dividend Amount” means an amount sufficient to establish CBS’s opening
gross debt balance from continuing operations as of the Separation Date at $7.0
billion, as calculated pursuant to, and subject to such adjustments as are
described in, Schedule 2.08(a).

 

Section 2.09           Conduct
of Business Following the Separation.

 

(a)           The New Viacom Group shall not,
directly or indirectly, own, hold or acquire a Media Company Interest to the
extent that such ownership, holding or acquisition would cause any member of
the CBS Group to be in violation of the FCC Broadcast Ownership Rules or limit
in any manner at any time under such Rules the ability of any member of the CBS
Group to acquire or hold Broadcast Interests (any such interest that the New
Viacom Group may not own, hold or acquire being a “Prohibited Interest”);
provided, however, that the New Viacom Group may acquire a
Prohibited Interest in connection with the acquisition of an enterprise if
(i) in the acquired enterprise’s last complete fiscal year prior to such
acquisition, the business or asset of such enterprise giving rise to such
Prohibited Interest generated less than 25% of such enterprise’s consolidated
revenues (calculated on a full-year pro forma basis, if such business or asset
was acquired by such acquired enterprise after commencement of such last
completed fiscal year), (ii) the acquisition does not cause any member of
the CBS Group (or Mr. Sumner M. Redstone, National Amusements, Inc., NAIRI Inc.
or any of their successors, assigns or transferees holding interests in both
the CBS Group and the New Viacom Group that are attributable for purposes of
the FCC Broadcast Ownership Rules) to be in violation of the FCC Broadcast
Ownership Rules and (iii) the New Viacom Group agrees to promptly divest
the Prohibited Interest or the business or asset giving rise to such Prohibited
Interest so that the ability of the members of the CBS Group to operate in a
manner consistent with the FCC Broadcast Ownership Rules or acquire or hold
Broadcast Interests is not impaired in any respect.  To the extent it is not prohibited from doing
so, New Viacom shall, to the extent reasonably practicable, give CBS advance
notice of any agreement to acquire a Prohibited Interest.  If New Viacom is obligated to divest a
Prohibited Interest pursuant to clause (iii) of this paragraph (a), New Viacom
shall provide CBS with a 10-day period to negotiate with New Viacom to acquire
such Prohibited Interest before New Viacom enters into negotiations related
thereto with any other parties.

 

(b)           No member of either the New Viacom
Group or the CBS Group shall, directly or indirectly, own, hold or acquire a
Cable Operator Interest to the extent that such ownership, holding or
acquisition would subject any member of the other Group to the FCC Program
Access Rules (a “Prohibited Cable Interest”); provided, however,
that a Group may own, hold or acquire a Prohibited Cable Interest if at the
time of the acquisition of such Prohibited Cable Interest the other Group is
for independent reasons already subject either to the FCC Program Access Rules
or to a Restriction that imposes effectively the same limitations on such other
Group as the FCC Program Access Rules.

 

37

 

(c)           New Viacom and CBS shall each provide
the other with any information about its Group that any member of the other
Group is required to include in submissions made to the FCC, in accordance with
the provisions of Article III.

 

(d)           Each of New Viacom and CBS shall not,
and shall cause the members of their respective Group not to, directly or
indirectly, (i) acquire any asset, enter into any agreement or
affirmatively accept or agree to any condition that purports to bind any member
of the other Group or that subjects any member of the other Group to
Restrictions to which such other Group is not for independent reasons already
effectively subject, in either case without such member’s express written
consent; or (ii) take any action that would result in any member of the other
Group being in breach of or default under any Contract entered into prior to
the Separation Date and listed on Schedule 2.09(d)(ii), as the same may be
amended from time to time.

 

(e)           The provisions of paragraphs (a), (b)
and (c) of this Section 2.09 and the parties’ rights and obligations
thereunder shall terminate and no longer be in effect from and after such time
as none of Mr. Redstone, National Amusements, Inc., NAIRI Inc. or any of their
successors, assigns or transferees is deemed to have ownership interests in
both CBS and New Viacom that are attributable for purposes of the FCC Broadcast
Ownership Rules (in the case of paragraphs (a) and (c)) or the FCC Program
Access Rules (in the case of paragraphs (b) and (c)).  If not already terminated pursuant to the
first sentence of this paragraph (e), the rights and obligations of a Group
under paragraph (b) of this Section 2.09 shall terminate and no longer be in
effect from and after the earlier to occur of (i) such time as the other Group
ceases to have an ownership interest that is attributable for purposes of the
FCC Program Access Rules in the entities listed in Schedules 2.09(e)(i) or
2.09(e)(ii), as applicable, or (ii) the fourth anniversary of the Separation
Date.  Notwithstanding any termination
pursuant this paragraph (e), the parties hereto shall remain liable for any
breaches of this Section 2.09 occurring prior to such time.

 

Section 2.10           Disclaimer
of Representations and Warranties.

 

(a)           New Viacom (on behalf of itself and
each member of the New Viacom Group) understands and agrees that, except as
expressly set forth in any Ancillary Agreement, no party to this Agreement, any
Ancillary Agreement or any other agreement or document contemplated by this
Agreement, any Ancillary Agreement or otherwise is representing or warranting
in any way as to the New Viacom Assets or New Viacom Liabilities transferred,
assumed or retained as contemplated hereby or thereby, as to any Consents or
Governmental Approvals required in connection therewith, as to the value or
freedom from any Encumbrances of, or any other matter concerning, any New
Viacom Asset or New Viacom Liability, or as to the absence of any defense or
right of setoff or freedom from counterclaim with respect to any claim or other
New Viacom Asset, including, without limitation, any accounts receivable of any
party, or as to the legal sufficiency of any assignment, document or instrument
delivered hereunder or thereunder to convey title to any New Viacom Asset or
thing of value upon the execution, delivery and filing hereof or thereof.

 

(b)           CBS (on behalf of itself and each
member of the CBS Group) understands and agrees that, except as expressly set
forth in any Ancillary Agreement, no party to this Agreement, any Ancillary
Agreement or any other agreement or document contemplated by this Agreement,
any Ancillary Agreement or otherwise is representing or warranting in any way
as to the CBS

 

38

 

Assets or CBS Liabilities transferred,
assumed or retained as contemplated hereby or thereby, as to any Consents or
Governmental Approvals required in connection therewith, as to the value or
freedom from any Encumbrances of, or any other matter concerning, any CBS Asset
or CBS Liability, or as to the absence of any defense or right of setoff or
freedom from counterclaim with respect to any claim or other CBS Asset, including,
without limitation, any accounts receivable of any party, or as to the legal
sufficiency of any assignment, document or instrument delivered hereunder to
convey title to any CBS Asset or thing of value upon the execution, delivery
and filing hereof or thereof.

 

(c)           Except as may expressly be set forth
in any Ancillary Agreement, all such New Viacom Assets and CBS Assets are being
transferred on an “as is,” “where is” basis (and, in the case of any real
property, by means of a special or limited warranty deed or similar form of
deed or conveyance) and the respective transferees shall bear the economic and
legal risks that (i) any conveyance shall prove to be insufficient to vest in
the transferee good and marketable title, free and clear of any Encumbrance,
and (ii) any necessary Consents or Governmental Approvals are not obtained or
any requirements of Law are not complied with.

 

Section 2.11           Deferred
Transfers.

 

(a)           If and to the extent that the
transfer,  assignment or novation to the
New Viacom Group of any New Viacom Assets or New Viacom Liabilities, or to the
CBS Group of any CBS Assets or CBS Liabilities, would be a violation of
applicable Law or require any Consent or Governmental Approval or the
fulfillment of any condition that cannot be fulfilled by the applicable member
of the New Viacom Group or CBS Group, then, unless the parties shall otherwise
agree, the transfer, assignment or novation to the transferee or assignee of
such New Viacom Assets or New Viacom Liabilities or CBS Assets or CBS Liabilities
shall be automatically deemed deferred and any such purported transfer or
assignment shall be null and void until such time as all legal impediments are
removed and/or such Consents or Governmental Approvals have been obtained or
such condition has been fulfilled.  Any
such Liability shall be deemed a “Deferred Transfer Liability.”  Any such Asset shall be deemed (i) a ”Deferred
Transfer Asset” and (ii) notwithstanding the foregoing, a CBS Asset or New
Viacom Asset, as the case may be, for purposes of determining whether any
Liability related thereto is a CBS Liability or a New Viacom Liability.

 

(b)           If the transfer or assignment of any
Deferred Transfer Asset or assumption of any Deferred Transfer Liability is not
consummated prior to or at the Separation Date, whether as a result of the
provisions of Section 2.11(a) or for any other reason, then, insofar as
reasonably possible, (i) the Person retaining such Deferred Transfer Asset
shall thereafter hold such Deferred Transfer Asset for the use and benefit of
the Person entitled thereto (at the expense of the Person entitled thereto) and
(ii) the Person intended to assume such Deferred Transfer Liability shall, or
shall cause the applicable member of its Group to, pay or reimburse the Person
retaining such Deferred Transfer Liability for all amounts paid or incurred in
connection with the retention of such Deferred Transfer Liability.  In addition, the Person retaining such
Deferred Transfer Asset shall, insofar as reasonably possible and to the extent
permitted by applicable Law, treat such Asset in the ordinary course of
business in accordance with past practice and take such other actions as may be
reasonably requested by the Person to which such Deferred Transfer Asset is to
be transferred in order to place such Person, insofar as reasonably possible,

 

39

 

in the same position as if such
Deferred Transfer Asset had been transferred as contemplated hereby and so that
all the benefits and burdens relating to such Deferred Transfer Asset,
including, without limitation, possession, use, risk of loss, potential for
gain, and dominion, control and command over such Deferred Transfer Asset, are
to inure from and after the Separation Date to the member or members of the New
Viacom Group or the CBS Group entitled to the receipt of such Deferred Transfer
Asset.

 

(c)           If and when the Consents,
Governmental Approvals and/or conditions, the absence or non-satisfaction of
which caused the deferral of transfer of any Deferred Transfer Asset or
Deferred Transfer Liability pursuant to Section 2.11(a), are obtained or
satisfied, the transfer, assignment or novation of the applicable Deferred
Transfer Asset or Deferred Transfer Liability shall be effected in accordance
with and subject to the terms of this Agreement and/or the applicable Ancillary
Agreement.

 

(d)           The Person retaining any Deferred
Transfer Asset or Deferred Transfer Liability due to the deferral of the
transfer or assignment of such Deferred Transfer Asset or the deferral of the
assumption of such Deferred Transfer Liability pursuant to Section 2.11(a)
or otherwise shall not be obligated, in connection with the foregoing, to
expend any money unless the necessary funds are advanced, assumed, or agreed in
advance to be reimbursed by the Person entitled to such Deferred Transfer Asset
or the Person intended to be subject to such Deferred Transfer Liability, other
than reasonable attorneys’ fees and recording or similar fees, all of which
shall be promptly reimbursed by the Person entitled to such Deferred Transfer
Asset or the Person intended to be subject to such Deferred Transfer Liability.

 

(e)           Each of New Viacom and CBS shall, and
shall cause the members of its Group to, (i) treat for all Income Tax purposes
(A) the Deferred Transfer Assets as assets owned by the Person entitled to such
Deferred Transfer Assets as of the Separation Date and (B) the Deferred
Transfer Liabilities as liabilities owed by the Person intended to be subject
to such Deferred Transfer Liabilities as of the Separation Date and (ii)
neither report nor take any Income Tax position (on a Tax Return or otherwise)
inconsistent with such treatment (unless required by a change in applicable Tax
Law or good faith resolution of a Tax Contest relating to Income Taxes).

 

Section 2.12           Transfers
of Assets or Liabilities Following the Separation.  Subject to Section 2.11, in the event
that, at any time on or after the Separation Date, any member of the CBS Group
or the New Viacom Group shall receive or otherwise possess any Asset or incur
any Liability that is allocated to a member of the other Group pursuant to this
Agreement or an Ancillary Agreement, such party (the “Transferor”)
shall, to the extent permitted by Law, promptly transfer, or cause to be transferred,
such Asset or Liability to the Person so entitled thereto or to have been
responsible therefor (the “Transferee”), and such Transferee shall
accept or assume, or cause to be accepted or assumed, such Asset or
Liability.  Prior to such transfer, the
Transferor shall hold such Asset or Liability in trust for the benefit of the
Transferee and shall perform all obligations of the Transferee under such
agreement following the Separation Date. 
Each of New Viacom and CBS shall, and shall cause the members of its
Group to, (a) treat for all Income Tax purposes the receipt of any such Asset
or the accrual of any such Liability as having been originally received or
accrued by the Transferee rather than the Transferor and (b) neither report nor
take any Income Tax position (on a Tax

 

40

 

Return or otherwise) inconsistent with such treatment (unless required
by a change in applicable Tax Law or good faith resolution of a Tax Contest
relating to Income Taxes).

 

Section 2.13           Corporate
Names; Trademarks.

 

(a)           Except as specifically provided in
the License Agreements or other Ancillary Agreements, beginning on the
Separation Date, no member of the CBS Group may use any trademark, service
mark, trade dress, Internet domain name, logo or other source identifier owned
by any member of the New Viacom Group, including, without limitation,  the marks “Viacom”, “Viacom Outdoor” and “Paramount”,
except as permitted under applicable Law or subsequent agreement in writing
between the parties.  Notwithstanding the
foregoing or anything in the Ancillary Agreements to the contrary, CBS shall
not be required to take any action to remove any reference to Viacom, including
the “Viacom” name, from (i) any stock certificates relating to shares of Viacom
Common Stock outstanding on or prior to the Separation or (ii) materials
already in the possession of customers or other unaffiliated third parties as
of the Separation Date.

 

(b)           Except as specifically provided in
the License Agreements or other Ancillary Agreements, beginning on the
Separation Date, no member of the New Viacom Group may use any trademark,
service mark, trade dress, Internet domain name, logo or other source
identifier owned by any member of the CBS Group, including, without limitation,
the mark “CBS”, except as permitted under applicable Law or subsequent
agreement in writing between the parties. 
Notwithstanding the foregoing or anything in the Ancillary Agreements to
the contrary, New Viacom shall not be required to take any action to remove any
reference to CBS from materials already in the possession of customers or other
unaffiliated third parties as of the Separation Date.

 

Section 2.14           Office
of the Chairman.

 

(a)           As of the Separation Date, Mr.
Redstone shall be the chairman and an employee of each of CBS and New
Viacom.  Mr. Redstone’s initial base
salary with each of CBS and New Viacom will equal 50% of his base salary with
Viacom at the rate in effect immediately before the Separation Date.  Mr. Redstone’s short-term incentive plan
compensation for 2005 shall be determined jointly by and shared equally between
CBS and New Viacom.  Except as provided
in the preceding two sentences, after the Separation Date, Mr. Redstone’s
base salary and other compensation (including, without limitation, any
long-term incentive compensation awards) from CBS and New Viacom, respectively,
shall be determined independently by each of CBS and New Viacom in its sole
discretion.  Mr. Redstone shall be
eligible to participate in the Viacom Employee Benefit Plans and the New Viacom
Employee Benefit Plans in accordance with the terms of such plans.

 

(b)           As of the Separation Date, Carl Folta
will be a full-time employee of New Viacom and a part-time employee of CBS and
will receive compensation and benefits from New Viacom and CBS pursuant to
separate employment agreements he will enter into with each company.  Mr. Folta’s salary (at the rate in effect
immediately before the Separation Date) will be shared between New Viacom and
CBS on the basis of 50% for New Viacom and 50% for CBS.  Mr. Folta’s short-term incentive plan
compensation for 2005 and subsequent years will be

 

41

 

determined by the parties hereto and
will be shared between New Viacom and CBS on the basis of 50% for New Viacom
and 50% for CBS.  CBS and New Viacom will
jointly determine the amount of Mr. Folta’s long-term incentive compensation
and each will award 50% of Mr. Folta’s long-term compensation, with the form of
the grants to be consistent with grants for other executive officers of CBS and
New Viacom.  Mr. Folta shall be eligible
to participate in the Viacom Employee Benefit Plans and the New Viacom Employee
Benefit Plans in accordance with the terms of such plans.

 

(c)           The individuals identified on
Schedule 2.14(c) shall, as of the Separation Date, be employees of New
Viacom.  Acknowledging that such
individuals will perform significant services for Mr. Redstone and his office
in Mr. Redstone’s capacity as Chairman of CBS and for Mr. Folta in his capacity
as a member of the Office of the Chairman, CBS shall reimburse New Viacom for
50% of the cost of compensation and benefits of such individuals according to
procedures agreed to by CBS and New Viacom.

 

(d)           The tickets listed on Schedule
2.14(d) shall be allocated in accordance with the manner set forth therein.

 

ARTICLE III

 

CONFIDENTIALITY; EXCHANGE OF INFORMATION

 

Section 3.01           Ownership
of Information.  Subject to
Section 3.06, any Information owned by a Providing Party that is provided
to a Requesting Party pursuant to Section 3.04 shall be deemed to remain the
property of the Providing Party.  Unless
specifically set forth herein or in any Ancillary Agreement, nothing contained
in this Agreement shall be construed as granting or conferring rights of
license or otherwise in any such Information.

 

Section 3.02           Restrictions
on Disclosure of Information.

 

(a)           Without limiting any rights or
obligations under any other agreement between or among any member of the CBS
Group and any member of the New Viacom Group relating to confidentiality and
subject to Section 3.03 and Section 3.08, each of the parties hereto agrees
that it shall not, and shall not permit any member of its Group to, and that
its or their respective Representatives shall not, disclose to any Person or
use any Information with respect to the members or the businesses of the other
Group (“Confidential Information”) (other than to such members of its
Group or its or their Representatives on a “need-to-know” basis in connection
with the purpose for which the Confidential Information was originally
disclosed).  Such Information shall not
be deemed Confidential Information to the extent that it is or was (i) in
the public domain other than as a result of the breach of this Agreement or any
other agreement between any member of the CBS Group and any member of the New
Viacom Group, (ii) available to the Requesting Party outside the context
of the Prior Relationship on a non-confidential basis prior to the disclosure
of such Confidential Information by the Providing Party or
(iii) independently developed by, or on behalf of, such party by Persons
who do not have access to, or descriptions of, such Confidential
Information.  Notwithstanding anything to
the contrary in this Section 3.02(a), any member of either Group may,
subject to Section 3.08, disclose or use Confidential Information (x) if
the parties hereto have consented in writing to

 

42

 

such disclosure, which consent shall
not be unreasonably withheld or delayed, or (y) in connection with
preparing and filing Tax Returns or in connection with any Tax Contest.

 

(b)           Each of the parties hereto shall be
responsible for any breach of this Section 3.02 and Section 3.03 by the Representatives
of any member of its Group, and shall maintain and develop, and shall cause the
members of its respective Group to maintain and develop, such policies and
procedures as shall from time to time become necessary or appropriate to ensure
compliance with this Section 3.02 and Section 3.03.

 

Section 3.03           Disclosure
of Information.  If either CBS or New
Viacom or any member of their respective Groups or its or their respective
Representatives becomes legally required to disclose any Confidential Information,
such disclosing party, except to the extent prohibited by applicable Law, shall
promptly notify the party hereto that owns such Confidential Information (the “Owning
Party”), and, except to the extent such Confidential Information is to be
used in connection with preparing or filing Tax Returns or in connection with
any Tax Contest, shall use all commercially reasonable efforts to cooperate
with the Owning Party so that the Owning Party may seek a protective order or
other appropriate remedy and/or waive compliance with this Section 3.03.  All expenses reasonably incurred by the
disclosing party in seeking a protective order or other remedy shall be borne
by the Owning Party.  If such protective
order or other remedy is not obtained, or if the Owning Party waives compliance
with this Section 3.03, the disclosing party shall (a) disclose only
that portion of the Confidential Information it is legally required to
disclose, (b) use all commercially reasonable efforts to obtain reliable
assurances requested by the Owning Party that confidential treatment will be
accorded to such Confidential Information and (c) promptly provide the
Owning Party with a copy of the Confidential Information so disclosed, in the
same form and format as so disclosed, together with the identity of all Persons
to whom such Confidential Information was disclosed.

 

Section 3.04           Access
to Information.

 

(a)           Subject to paragraph (c) below,
during the Retention Period, at the request of either of the parties hereto
(the “Requesting Party”), the other party hereto (the “Providing
Party”) shall, and shall cause the members of its Group or its or their
respective Representatives, successors and assignees to, and shall use
commercially reasonable efforts to cause joint ventures to which it is and they
are a party but that are not members of their respective Groups (collectively, “Related
Parties”) to, cooperate with and afford to the Requesting Party and its
Representatives, upon reasonable advance written request, reasonable access to
all Information within the possession of the Providing Party or any Related
Party (other than Information (i) the disclosure of which would have the
effect of waiving a legal privilege or (ii) that is the subject of a
confidentiality agreement between the Providing Party and a third party which
prohibits disclosure to the Requesting Party, provided that the
Providing Party shall use all commercially reasonable efforts to obtain such
third party’s consent to disclosure of such Information).

 

(b)           Subject to paragraph (c) below, each
party agrees to cooperate fully, and to cause the members of its respective
Group or its or their respective Representatives, successors and assignees, to
cooperate fully and to use commercially reasonable efforts to cause Related
Parties to cooperate fully, to allow access during normal business hours and
upon reasonable notice to each other’s employees (i) to the extent that they
are reasonably necessary to discuss

 

43

 

and explain requested Information with
and to the Requesting Party and (ii) with respect to any claims brought against
the other, or any regulatory proceedings, investigations, Tax Contests,
comments or reviews (formal or informal) to which the other is subject,
involving the conduct of business by Viacom and its predecessors at any time
prior to the Separation Date; provided, however, that such access
will be granted only to the extent that such access does not unreasonably
interfere with any employee’s performance of his or her employment duties.

 

(c)           With respect to paragraphs (a) and
(b) of this Section 3.04, access to the requested Information shall be provided
to the extent (i) permitted or required by Section 3.08, (ii) such Information
reasonably relates to the Requesting Party’s assets, business or operations or
any Liability the Requesting Party has assumed or is responsible for hereunder
or under any of the Ancillary Agreements, and (iii) access is reasonably
required by the Requesting Party for purposes of (A) auditing,
(B) accounting, (C) the Requesting Party’s investigation, defense or
prosecution of claims, demands or Actions (except for claims, demands or
Actions between members of the CBS Group and the New Viacom Group or for which
indemnification from the other party is being sought (other than Third Party
Claims)), (D) employee benefits, regulatory or Tax matters,
(E) subject to Section 3.08, compliance with the request of a
Governmental Authority having jurisdiction over the Requesting Party or a
matter in which the Requesting Party has an interest, (F) fulfilling
regulatory disclosure or reporting obligations, including, without limitation,
Information reasonably necessary for preparing reports or documents required by
or filed under the Securities Act or the Exchange Act with respect to any
period entirely or partially prior to the Separation Date, or preparing and
filing any Tax Return or engaging in any Tax Contest, or (G) any other
reasonable purpose.  Nothing herein is intended
to put either Party’s Information within the possession, custody or control of
the other Party except to the extent expressly provided for herein.  All expenses of the Providing Party complying
with this Section 3.04 shall be borne by the Requesting Party.

 

Section 3.05           Record
Retention.

 

(a)           Each of CBS and New Viacom shall, and
shall cause the members of its respective Group to, preserve and keep their
Records relating to any period prior to the Separation Date in their
possession, whether in electronic form or otherwise, until the latest of, as
applicable, (i) the date on which such Records are no longer required to be
retained pursuant to Viacom’s applicable record retention policy as in effect
immediately prior to the Separation Date, including, without limitation,
pursuant to any “Litigation Hold” issued by Viacom or any of its Subsidiaries
prior to the Separation Date, (ii) any period as may be required by any
applicable Law, (iii) any period during which such Records relate to a pending
or threatened claim, demand or Action which is known to the members of the
Group in possession of such Records, (iv) any period during which the
destruction of such Records could interfere with a pending or threatened
investigation by a Governmental Authority which is known to the members of the
Group in possession of such Records and (v) with respect to Information
relating to Taxes (subject to Section 3.06), one year after the expiration of
the applicable statute of limitations (such latest period, the “Retention
Period”), at such party’s sole cost and expense; provided that with
respect to any pending or threatened claim, demand or Action arising after the
Separation Date, clause (iii) of this sentence applies only to the extent that
whichever member of the New Viacom Group or the CBS Group is in possession of
such Records has been notified in writing pursuant to a “Litigation Hold” by
the other Party of such pending or threatened claim,

 

44

 

demand or Action.  Prior to disposing of any material financial
records or work papers or any internal audit work papers and reports relating
to the business of Viacom or any of its predecessors during any period prior to
the Separation Date, each of CBS and New Viacom shall, and shall cause the
members of its respective Groups to, notify the other party in writing of such
intention and afford the other party the opportunity to take possession or
request copies of such Records at its discretion.

 

(b)           Each of the parties hereto shall, and
shall cause the members of its respective Group to, use reasonable efforts to
deliver to the other party (i) on or prior to the Separation Date, any and all
original corporate organizational books that such party or any member of its
Group has in its possession relating to the other party’s Business, (ii) on or
prior to the Separation Date, originals of any and all Records that any member
of its Group knowingly has in its possession or control, whether in paper or
electronic format, in each case relating primarily to the other party’s Business,
and (iii) as soon as reasonably practicable following their discovery,
originals of any Records described in (ii) above which it or any member of its
Group discovers are in its possession or control following the Separation Date;
provided, however, that, with respect to clauses (i), (ii) and
(iii) of this paragraph (b), the party providing such Records may retain copies
of any such Records that relate to its Business, including, without limitation,
corporate minute books and risk management files.  The parties hereto agree that it shall not be
necessary to search individual offices or desktop computers for such Records
unless specifically requested to do so by the other party and, in each such
case, only to the extent it is reasonably necessary for a specific, identified
business purpose.

 

Section 3.06           Information
Relating to Certain Taxes.  This
Article III shall not apply to Information related to Income Taxes, Capital
Taxes or Transfer Taxes, which shall instead be governed by the Tax Matters Agreement.

 

Section 3.07           Witness
Services.  At all times from and
after the Separation Date, each of CBS and New Viacom shall use its
commercially reasonable efforts to make available to the other, upon reasonable
written request, its and its Subsidiaries’ officers, directors, employees and
agents as witnesses to the extent that (a) such Persons may reasonably be
required in connection with the investigation, prosecution or defense of any
claim, demand or Action in which either CBS or New Viacom or the members of their
respective Groups may from time to time be involved (except for claims, demands
or Actions between members of each Group) and (b) there is no conflict in the
claim, demand or Action between the Requesting Party and the other party hereto
or any such witnesses.  A party providing
witness services to the other party under this Section 3.07 shall be entitled
to receive from the recipient of such services, upon the presentation of
reasonably detailed invoices therefor, payments for such amounts relating to
disbursements and other out-of-pocket expenses (which shall not include the
costs of salaries and benefits of employees who are witnesses or any pro rata
portion of overhead or other costs of employing such employees which would have
been incurred by the such employees’ employer regardless of the employees’
service as witnesses), as may be reasonably incurred in providing such witness
services.

 

Section 3.08           Privileged
Matters.  CBS and New Viacom
recognize that legal and other professional services that have been or will
have been provided prior to the Separation Date have been or will have been
provided for the benefit of each of Viacom, the members of the

 

45

 

CBS Group and the members of the New Viacom Group, and that each of
Viacom, the members of the CBS Group and the members of the New Viacom Group
should be deemed to be the client for the purposes of asserting all privileges
which may be asserted under applicable Law in connection therewith.  Subject to paragraphs (a) through (h) of this
Section 3.08, CBS and New Viacom shall, and shall cause the members of their
respective Group to, maintain their respective separate and joint privileges,
including, without limitation, by executing common interest agreements where
necessary or useful for this purpose. 
All privileges relating to any claims, demands or Actions which involve
members of both the CBS Group and the New Viacom Group in respect of which both
parties retain any responsibility or Liability under this Agreement or any
Ancillary Agreement shall be subject to a shared privilege among them.  To allocate the interests of each party in
the Information as to which any party is entitled to assert a privilege, whether
or not such a privilege exists or the existence of which is in dispute, the
parties agree as follows:

 

(a)           CBS shall be entitled, in perpetuity,
to control the assertion or waiver of all privileges in connection with
privileged Information which relates to the CBS Business and not to the New
Viacom Business, whether or not the privileged Information is in the possession
of or under the control of members of the CBS Group or the New Viacom
Group.  CBS also shall be entitled, in
perpetuity, to control the assertion or waiver of all privileges in connection
with privileged Information which relates to the subject matter of any pending
or future claim, demand or Action that is, or which CBS reasonably anticipates
may become, a CBS Liability and that is not also, or that CBS reasonably
anticipates will not become, a New Viacom Liability, whether or not the
privileged Information is in the possession of or under the control of members
of the CBS Group or the New Viacom Group.

 

(b)           New Viacom shall be entitled, in
perpetuity, to control the assertion or waiver of all privileges in connection
with privileged Information which relates to the New Viacom Business and not to
the CBS Business, whether or not the privileged Information is in the
possession of or under the control of members of the CBS Group or the New
Viacom Group.  New Viacom also shall be
entitled, in perpetuity, to control the assertion or waiver of all privileges
in connection with privileged Information which relates to the subject matter
of any pending or future claim, demand or Action that is, or which New Viacom
reasonably anticipates may become, a New Viacom Liability and that is not also,
or that New Viacom reasonably anticipates will not become, a CBS Liability,
whether or not the privileged Information is in the possession of or under the
control of members of the CBS Group or the New Viacom Group.

 

(c)           Subject to the restrictions in this
Section 3.08, New Viacom and CBS agree that they shall have equal right to
assert all shared privileges and all privileges not allocated pursuant to the
terms of Section 3.08(a) or (b) and which relate to the members of both
the CBS Group and the New Viacom Group.

 

(d)           Each party hereto shall
ensure that no member of its respective Group may waive any privilege which
could be asserted under any applicable Law, and in which the other party hereto
has a shared privilege, without the written consent of the other party which
shall not be unreasonably withheld or delayed or as provided in paragraph (e)
or (f) below.

 

46

 

(e)           In the event of any claim, demand,
Action or other dispute between the members of the New Viacom Group, on the one
hand, and the members of the CBS Group, on the other hand, either such party
may waive a privilege in which the other party has a shared privilege, without
obtaining the consent of the other party; provided, however, that
such waiver of a shared privilege shall be effective only as to the use of
Information with respect to the claim, demand, Action or other dispute between
the members of the New Viacom Group, on the one hand, and the members of the
CBS Group, on the other hand, and shall not operate as a waiver of the shared
privilege with respect to third parties.

 

(f)            If a dispute arises between the
members of the New Viacom Group, on the one hand, and the members of the CBS
Group, on the other hand, regarding whether a privilege should be waived to
protect or advance the interest of either party, each party agrees that it
shall negotiate in good faith, shall endeavor to minimize any prejudice to the
rights of the other party, and shall not unreasonably withhold consent to any
request for waiver by the other party. 
Each party hereto specifically agrees that it will not withhold consent
to waiver for any purpose except to protect its own legitimate interests.

 

(g)           Upon receipt by either party hereto
or by any Subsidiary thereof of any subpoena, discovery or other request which
arguably calls for the production or disclosure of Information subject to a
shared privilege or as to which the other party or a Subsidiary thereof has the
sole right hereunder to assert a privilege, or if either party obtains
knowledge that any of its or any of its Subsidiaries’ current or former
directors, officers, agents or employees have received any subpoena, discovery
or other requests which arguably call for the production or disclosure of such
privileged Information, such party shall promptly notify the other party of the
existence of the request and shall provide the other party a reasonable
opportunity to review the Information and to assert any rights it or they may
have under this Section 3.08 or otherwise to prevent the production or
disclosure of such privileged Information.

 

(h)           The transfer of all Records and other
Information and each party’s retention of Records and other Information which
may include privileged Information of the other pursuant to this Agreement is
made in reliance on the agreement of CBS and New Viacom, as set forth in
Section 3.02 and this Section 3.08, to maintain the confidentiality of
privileged Information and to assert and maintain all applicable
privileges.  The access to Information
being granted pursuant to Sections 3.03 and 3.04 hereof, the
agreement to provide witnesses pursuant to Section 3.07 hereof, the
furnishing of notices and documents and other cooperative efforts contemplated
by Section 9.06 hereof, and the transfer of privileged Information between and
among the parties and their respective Subsidiaries pursuant to this Agreement
shall not be deemed a waiver of any privilege that has been or may be asserted
under this Agreement or otherwise.

 

47

 

ARTICLE IV

 

FINANCIAL AND OTHER INFORMATION

 

Section 4.01           Financial
and Other Information.

 

(a)           Until the date (the “CBS Last 10-K
Date”) on which CBS’s annual report on Form 10-K for the year in which
the Separation Date occurs is filed, New Viacom shall, and shall cause each of
the New Viacom Subsidiaries to, maintain a financial reporting system and a
system of internal accounting controls in accordance with generally accepted
accounting principles and SEC and Tax-related requirements that will provide
reasonable assurance that New Viacom’s and the New Viacom Subsidiaries’ books,
records and accounts fairly reflect all transactions and dispositions of
Assets.

 

(b)           After the end of the fiscal year of
New Viacom in which the Separation Date occurs, New Viacom shall deliver to CBS
each of the items listed on Schedule 4.01(b) no later than the dates set forth
in Schedule 4.01(b) for the delivery of such items, provided that New
Viacom and CBS shall actively consult with each other regarding any changes
(whether or not such changes would be substantive) which New Viacom may
consider making to any items listed on Schedule 4.01(b).   In any
event, by the Required Deadline, New Viacom shall deliver to CBS (i) a final
monthly consolidated income statement and related schedules for New Viacom and
the New Viacom Subsidiaries for the month-to-Separation Date period, (ii) a
year-to-Separation Date consolidated income statement and related schedules for
New Viacom and the New Viacom Subsidiaries, (iii) a consolidated balance sheet
and related schedules as of the Separation Date and (iv) a final statement of
cash flows and related schedules for New Viacom and the New Viacom Subsidiaries
for the year-to-Separation Date period.

 

(c)           This Section 4.01(c) shall not
apply if the Separation Date occurs in the fourth quarter of Viacom’s fiscal
year.  As soon as practicable, and in any
event within 24 days after the end of the quarter in which the Separation Date
occurs and no later than 15 days before CBS is required to file with the SEC
its quarterly financial statements for such fiscal quarter, New Viacom shall
deliver to CBS drafts of (i) the consolidated financial statements of New
Viacom and the New Viacom Subsidiaries (and notes thereto) for such quarterly
period and for the period from the beginning of the then-current fiscal year to
the end of such quarter, setting forth in each case in comparative form for
each such fiscal quarter of New Viacom the consolidated figures (and notes
thereto) for the corresponding quarter and periods of the previous fiscal year
and all in reasonable detail and prepared in accordance with Article 10 of
Regulation S-X, and (ii) a discussion and analysis by management of
New Viacom’s and the New Viacom Subsidiaries’ financial condition and results
of operations for such fiscal period, including, without limitation, an
explanation of any material adverse change, all in reasonable detail and
prepared in accordance with Item 303(b) of Regulation S-K.  The information set forth in subparagraphs
(i) and (ii) above is herein referred to as the “Quarterly Financial
Statements.”  No later than the
earlier of (A) five Business Days prior to the date New Viacom publicly files
the Quarterly Financial Statements with the SEC or otherwise makes such
Quarterly Financial Statements publicly available or (B) five Business
Days prior to the date on which CBS has notified New Viacom that it intends to
file its quarterly financial statements with the SEC, New Viacom shall deliver
to CBS the substantially final form of the Quarterly Financial Statements
certified by the

 

48

 

chief financial officer of New Viacom
as presenting fairly, in all material respects, the financial condition and
results of operations of New Viacom and the New Viacom Subsidiaries; provided
that New Viacom and CBS shall actively consult with each other regarding any
changes (whether or not substantive) which New Viacom may consider making to
its Quarterly Financial Statements and related disclosures prior to the filing
with the SEC.  New Viacom shall deliver
to CBS its final Quarterly Report on Form 10-Q for the quarter in which
the Separation Date occurs no later than 35 days after the end of such
quarter.  If the time periods required by
the SEC for New Viacom or CBS to file their respective Quarterly Reports on
Form 10-Q are changed, New Viacom and CBS shall renegotiate in good faith
to set more appropriate time periods relating to the dates as set forth in this
Section 4.01(c).

 

(d)           As soon as practicable, and in any
event within 58 days after the end of the fiscal year of New Viacom in which
the Separation Date occurs and no later than 15 days before CBS is required to
file with the SEC its annual financial statements for such fiscal year, New
Viacom shall deliver to CBS drafts of (i) the consolidated financial statements
of New Viacom and the New Viacom Subsidiaries (and notes thereto) for such
year, setting forth in comparative form the consolidated figures (and notes
thereto) for the previous fiscal year and all in reasonable detail and prepared
in accordance with Regulation S-X, and (ii) a discussion and analysis
by management of New Viacom’s and the New Viacom Subsidiaries’ financial
condition and results of operations for such year, including, without
limitation, an explanation of any material adverse change, all in reasonable
detail and prepared in accordance with Item 303(a) of Regulation S-K.  The information set forth in subparagraphs
(i) and (ii) above is herein referred to as the “Annual Financial Statements.”  New Viacom shall deliver to CBS all material
revisions to such drafts as soon as any such revisions are prepared or
made.  No later than the earlier of (A)
five Business Days prior to the date New Viacom publicly files the Annual
Financial Statements with the SEC or otherwise makes such Annual Financial
Statements publicly available or (B) five Business Days prior to the date on
which CBS has notified New Viacom that it intends to file its annual financial
statements with the SEC, New Viacom shall deliver to CBS the final form of the
Annual Financial Statements certified by the chief financial officer of New Viacom
as presenting fairly, in all material respects, the financial condition and
results of operations of New Viacom and the New Viacom Subsidiaries; provided
that New Viacom and CBS shall actively consult with each other regarding any
changes (whether or not substantive) which New Viacom may consider making to
its Annual Financial Statements and related disclosures prior to the filing
with the SEC.  New Viacom shall deliver
to CBS its final Annual Report on Form 10-K for the fiscal year of New Viacom
in which the Separation Date occurs no later than as set forth in Schedule
4.01(d).  If the time periods required by
the SEC for New Viacom or CBS to file their respective Annual Reports on Form
10-K are changed, New Viacom and CBS shall renegotiate in good faith to set
more appropriate time periods relating to the dates as set forth in this
Section 4.01(d).

 

(e)           New Viacom shall deliver to CBS all
Quarterly and Annual Financial Statements of each New Viacom Subsidiary for
which it is required to file financial statements with the SEC or otherwise
make such financial statements publicly available, with such financial
statements to be provided for the same periods, in the same manner and detail
and on the same time schedule as those financial statements of New Viacom
required to be delivered to CBS pursuant to Sections 4.01(c) and (d).

 

49

 

(f)            All information provided by New
Viacom or any of the New Viacom Subsidiaries to CBS pursuant to Sections
4.01(b) through (e) inclusive shall be consistent in terms of format and detail
and otherwise with the procedures in effect immediately prior to the Separation
Date with respect to the provision of such financial information by
Subsidiaries of Viacom (and, where appropriate, as presented as of immediately
prior to the Separation Date in financial reports to Viacom’s Board of
Directors), with such changes therein as may be reasonably requested by CBS
from time to time consistent with such procedures and in accordance with generally
accepted accounting principles.

 

(g)           (1) With respect to Public Filings by
CBS, until the CBS Last 10-K Date and (2) with respect to Public Filings by New
Viacom, until the date on which New Viacom’s annual report on Form 10-K for the
year in which the Separation Date occurs is filed, CBS and New Viacom shall
cooperate fully, and cause their respective accountants to cooperate fully, to
the extent requested by the other party, in the preparation of the other party’s
public earnings releases, annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and other proxy, information and
registration statements, reports, notices, prospectuses and filings made with
the SEC or any national securities exchange or otherwise made publicly
available (collectively, the “Public Filings”).  CBS and New Viacom agree to provide to each
other all Information that the other party reasonably requests in connection
with any Public Filings or that, in either party’s judgment, is required to be disclosed
or incorporated by reference therein under any Law.  Such Information shall be provided by such
party in a timely manner on the dates requested by the other party (which may
be earlier than the dates on which such party otherwise would be required
hereunder to have such Information available) to enable the other party to
prepare, print and release all Public Filings on such dates as such party shall
determine.  CBS and New Viacom shall use
their reasonable best efforts to cause their respective accountants to consent
to any reference to them as experts in any Public Filings required under any
Law.  If and to the extent requested by
either party, the other party shall diligently and promptly review all drafts of
such Public Filings and prepare in a diligent and timely fashion any portion of
such Public Filings pertaining to that party. 
Prior to any printing or public release of any Public Filing, an
appropriate executive officer of CBS or New Viacom shall, if requested by the
other party, certify that the Information provided by such party relating to
such party, the members of such party’s Group or such party’s business in such
Public Filing is accurate, true and correct in all material respects.

 

(h)           To the extent it relates to a pre-Separation
Date period, New Viacom shall authorize the New Viacom Auditors to make
available to the CBS Auditors both the personnel who performed or are
performing the annual audit of New Viacom and work papers related to the annual
audit of New Viacom, in all cases within a reasonable time prior to the New
Viacom Auditors’ opinion date, so that the CBS Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of the
New Viacom Auditors as it relates to the CBS Auditors’ report on CBS’s audited
annual financial statements, all within sufficient time to enable CBS to meet
its timetable for the printing, filing and public dissemination of such audited
annual financial statements.

 

(i)            To the extent it relates to a pre-Separation
Date period, New Viacom shall provide CBS’s internal auditors access to New
Viacom’s and its Subsidiaries’ Records so that CBS may conduct reasonable
audits relating to the financial statements provided by New

 

50

 

Viacom pursuant to the provisions of
this Section 4.01 as well as to the internal accounting controls and operations
of New Viacom and its Subsidiaries.

 

(j)            To the extent it relates to a pre-Separation
Date period, (1) each of the parties hereto shall give the other party hereto
as much prior notice as is reasonably practicable of any changes in, or
proposed determination of, its accounting estimates or accounting principles
from those in effect as of immediately prior to the Separation Date or of any
other action with regard to its accounting estimates or accounting principles
or previously reported financial results which may affect the other party’s
financial results, (2) each of the parties hereto will consult with the other
and, if requested by the party contemplating such changes, with such party’s
auditor and (3) unless required by generally accepted accounting principles,
Law or a Governmental Authority, New Viacom shall not make such determination
or changes which would affect CBS’s previously reported financial results
without CBS’s prior consent, which shall not be unreasonably withheld.  Further, notwithstanding the time periods
specified in Sections 4.01(c) through (e) hereof, New Viacom will give CBS
prompt notice of any amendments or restatements of accounting statements with
respect to pre-Separation Date periods, and will provide CBS with access as
provided in Section 4.01(h) hereof as promptly as possible such that CBS will
be able to satisfy its financial reporting requirements.

 

(k)           If, during the fiscal year in which
the Separation Date occurs, New Viacom changes its fiscal year, then CBS and
New Viacom will use their reasonable best efforts to agree on an interim audit
date to support CBS’s pre-Separation Date financial statements for the year
including the Separation Date and cooperate fully to the extent requested by
the other party in connection with the preparation of such financial
statements.

 

(l)            In the event either New Viacom or
CBS is the subject of any SEC comment, review or investigation (formal or
informal) relating to a period prior to the Separation Date and which in any
way relates to the other party or the other party’s Public Filings, such party
shall provide the other party with a copy of any comment or notice of such
review or investigation and shall give the other party a reasonable opportunity
to be involved in responding to such comment, review or investigation, and such
other party shall cooperate with such party in connection with responding to
such comment, review or investigation.

 

(m)          Within 20 days after the end of each
quarter following the Separation Date in which CBS and New Viacom are
Affiliates, each of CBS and New Viacom shall (i) provide the other party hereto
with all material related party Information required to be disclosed under the
Securities Act with respect to such quarter, to the extent such Information is
available, and (ii) cooperate to provide identical disclosure with regard to
such Information in any Public Filings.

 

(n)           Subject to Section 3.02(a),
Information provided pursuant to this Section 4.01 shall be deemed
Confidential Information for purposes of this Agreement.  Nothing in this Section 4.01 shall require
CBS or New Viacom to violate any agreement with any of its customers, suppliers
or other third parties regarding the confidentiality of commercially sensitive
information relating to such customer, supplier or other third party or its
business; provided that in the event that CBS or New Viacom is required
under this Section 4.01 to disclose any such Information, CBS or New Viacom
shall use all commercially reasonable efforts to seek to obtain such customers’,
suppliers’ or other third parties’ consent to the disclosure of such
Information.

 

51

 

Section 4.02           Sarbanes-Oxley
Section 404 Compliance.  Following
the Separation, New Viacom shall continue to provide to CBS all Information
reasonably required to meet the schedule set forth in Schedule 4.02 for
management’s assessment of the effectiveness of its disclosure controls and
procedures and its internal control over financial reporting in accordance with
Items 307 and 308, respectively, of Regulation S-K and its auditor’s audit of
its internal control over financial reporting and management’s assessment
thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and
the SEC’s and Public Company Accounting Oversight Board’s rules and auditing
standards thereunder (such assessments and audit being referred to as the “2005
Internal Control Audit and Management Assessments”).  Without limiting the generality of the
foregoing, New Viacom will provide all required financial and other Information
with respect to the members of the New Viacom Group to the New Viacom Auditors
in a sufficient and reasonable time and in sufficient detail to permit the CBS
Auditors and CBS’s management to complete the 2005 Internal Control Audit and
Management Assessments.

 

ARTICLE V

INSURANCE

 

Section 5.01           Insurance
Matters.

 

(a)           New Viacom agrees, for itself and
each other member of the New Viacom Group, that no member of the CBS Group nor
any of their directors, officers or employees shall have any Liability to any
member of the New Viacom Group whatsoever as a result of the Policies and
insurance practices of Viacom and its Subsidiaries as in effect at any time
prior to the Separation Date, including, without limitation, as a result of the
level or scope of any such insurance, the creditworthiness of any insurance
carrier, the terms and conditions of any Policy, the adequacy or timeliness of
any notice to any insurance carrier with respect to any claim or potential
claim or otherwise.

 

(b)           CBS agrees, for itself and each other
member of the CBS Group, that no member of the New Viacom Group nor any of their
directors, officers or employees shall have any Liability to any member of the
CBS Group whatsoever as a result of the Policies and insurance practices of
Viacom and its Subsidiaries as in effect at any time prior to the Separation
Date, including, without limitation, as a result of the level or scope of any
such insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any Policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.

 

(c)           Except as otherwise provided in this
Agreement or in any Ancillary Agreement, each of the parties intends by this
Agreement, to the fullest extent permitted under the terms of the Policies in
accordance with the applicable Law that, with respect to any New Viacom
Liability or New Viacom Loss, each member of the New Viacom Group retain all of
its Insurance Rights, receive the full benefit of any transfer or assignment of
Insurance Rights pursuant to Article II permitted under the terms of the
Policies in accordance with the applicable Law, and be a successor-in-interest
to all rights that any member of the New Viacom Group may have as of the
Separation Date, so as to avail itself of any such Policy, to obtain the
Insurance

 

52

 

Proceeds and benefits thereof and to
maximize the Insurance Proceeds and benefits recoverable under the
Policies.  At the written request of New
Viacom, CBS shall take all reasonable steps, including, without limitation, the
execution and delivery of any instruments, to effect the foregoing; provided,
however, that CBS shall not be required to incur any out-of-pocket
costs, waive any rights or incur any Liabilities in connection therewith,
except to the extent that such costs are advanced or reimbursed, or such
Liabilities are assumed, by New Viacom.

 

(d)           Except as otherwise provided in this
Agreement or in any Ancillary Agreement, each of the parties intends by this
Agreement, to the fullest extent permitted under the terms of the Policies in
accordance with the applicable Law that, with respect to any CBS Liability or
CBS Loss, each member of the CBS Group retain all of its Insurance Rights,
receive the full benefit of any transfer or assignment of any Insurance Rights
pursuant to Article II permitted under the terms of the Policies in accordance
with the applicable Law, and be a successor-in-interest to all rights that any
member of the CBS Group may have as of the Separation Date, so as to avail
itself of any such Policy, to obtain the Insurance Proceeds and benefits
thereof and to maximize the Insurance Proceeds and benefits recoverable under
the Policies.  At the written request of
CBS, New Viacom shall take all reasonable steps, including, without limitation,
the execution and delivery of any instruments, to effect the foregoing; provided,
however, that New Viacom shall not be required to incur any
out-of-pocket costs, waive any rights or incur any Liabilities in connection
therewith except to the extent that such costs are advanced or reimbursed, or
such Liabilities are assumed, by CBS.

 

(e)           Except as otherwise contemplated in
this Agreement or in any Ancillary Agreement, after the Separation Date, each
member of the CBS Group and New Viacom Group will share such Information as is
reasonably necessary in order to permit the other to manage and conduct its
insurance matters in an orderly fashion and pursue claims for insurance
coverage under the Policies in accordance with the terms of this Agreement, including,
without limitation, sharing Information relating to impairment, exhaustion,
potential exhaustion, and potential impairment of limits of liability of the
Policies and relating to maximums, caps, stop-loss or other limits applicable
to Insurance Charges.  Each member of the
CBS Group and New Viacom Group, at the request of the other, shall cooperate
with and make commercially reasonable efforts to assist the other in recoveries
for claims under any Policy for the benefit of any insured party, including,
without limitation, consulting and sharing Information with the other with
respect to positions regarding insurance coverage, such as, by way of example,
positions relating to the number of “occurrences” or “accidents” and the proper
trigger of coverage, that may affect the other’s insurance rights or recoveries
under the Policies.  No member of the CBS
Group or the New Viacom Group shall take any action which would intentionally
jeopardize or otherwise interfere with the other party’s ability to collect any
proceeds payable pursuant to any Policy, and no member of either the CBS Group
or the New Viacom Group shall, without the consent of the other, which consent
shall not be unreasonably withheld or delayed, provide any such insurance
carrier with a release, or amend, modify or waive any rights under any Policy
or agreement, if such release, amendment, modification or waiver would
adversely affect any rights or potential rights of any member of the other
Group thereunder; provided, however, that, except as otherwise
provided by this Agreement, the foregoing shall not (i) preclude any member of
either Group from presenting or pursuing any insurance coverage claim or from
exhausting or impairing any policy limit in accordance with Section 5.01(m);
(ii) require any member of either Group to pay any premium or other amount or
to incur any Liability except to the extent that

 

53

 

any such premium or other amount is
advanced or reimbursed, or such Liability is assumed, by the other Group; (iii)
require any member of either Group to renew, extend or continue any Policy in
force or (iv) preclude in any manner any member of either Group from pursuing
any litigation or Tax strategy or positioning.

 

(f)            Subject to Sections 5.01(e), (h),
(i) and (m), with respect to New Viacom Liabilities (exclusive of any Insured
CBS Liabilities), New Viacom Losses (exclusive of any Insured CBS Losses),
Insured New Viacom Liabilities, and Insured New Viacom Losses, New Viacom and the New Viacom
Subsidiaries shall have the right, responsibility and authority for claims
administration and financial administration of claims that relate to or affect
the Policies and for presentation and pursuit of claims for insurance coverage
under the Policies; provided, however, that upon notification by
a member of the New Viacom Group of a claim for coverage of any New Viacom
Liability (exclusive of any Insured CBS Liability), any New Viacom Loss
(exclusive of any Insured CBS Losses), Insured New Viacom Liability and Insured
New Viacom Loss under one or more of the Policies, CBS and the CBS Subsidiaries
shall cooperate with New Viacom and the New Viacom Subsidiaries in asserting
and pursuing coverage and payment for such claims by the appropriate insurance
carrier(s) or other obligor under the Policies, including, without limitation
and to the extent reasonably necessary to ensure recoveries under or arising
out of the Policies, consenting to sue in an Action based upon or arising out
of the Policies, to be sued in an Action based upon or arising out of the
Policies or to participate in alternative dispute resolution proceedings, such
as arbitrations, based upon or arising out of the Policies (at the direction
and sole expense of New Viacom, after consultation between the General Counsels
of New Viacom and CBS, provided that (i) New Viacom shall take into account the
legitimate business interests of the CBS Group in determining whether to seek
such consent from CBS and (ii) New Viacom shall, upon CBS’s request, provide
CBS with a letter from New Viacom’s outside counsel confirming that New Viacom
has a good faith basis for pursuing a claim under or arising out of the
Policies).  In asserting and pursuing
such coverage and payment, New Viacom and the New Viacom Subsidiaries shall
have sole power and authority to make binding decisions, determinations,
commitments and stipulations on their own behalf.  Except as otherwise provided for in this
Agreement or in any Ancillary Agreement, the members of the New Viacom Group
shall assume responsibility for, and shall pay to the appropriate insurance
carriers or otherwise, any premiums, retrospectively rated premiums, defense
costs, indemnity payments, deductibles, retentions or other charges under the
Policies (collectively, “Insurance Charges”) whenever arising, that
shall become due and payable under the terms and conditions of any applicable
Policy in respect of any Liabilities, losses, claims, actions or occurrences,
whenever arising or becoming known, to the extent such Insurance Charges
involve or relate to any of the Assets, Businesses, operations or Liabilities
of any member of the New Viacom Group, whether the same relate to the period
prior to, on or after the Separation Date. 
To the extent that the terms of any applicable Policy provide that any
member of the CBS Group shall have an obligation to pay or guarantee the
payment of any Insurance Charges relating to any member of the New Viacom
Group, CBS shall be entitled to demand that New Viacom make such payment directly
to the Person or entity entitled thereto or shall, upon demand by New Viacom,
make such payment with funds advanced to it by New Viacom.  In connection with any such demand, CBS shall
submit to New Viacom a copy of any invoice received by CBS pertaining to such
Insurance Charges, together with appropriate supporting documentation, to the
extent available.  In the event that New
Viacom fails to pay any such Insurance Charges when due and payable, whether at
the request of the Person entitled to payment or upon demand by

 

54

 

CBS, CBS may (but shall not be required
to) pay such Insurance Charges for and on behalf of New Viacom and, thereafter,
New Viacom shall forthwith reimburse CBS for such payment.  Subject to the other provisions of this
Article V, the responsibility for claims administration and financial
administration of such Policies in this Section 5.01(f) is in no way intended
to limit, inhibit or preclude any right of New Viacom, CBS or any other insured
to insurance coverage for any insured claims under the Policies.

 

(g)           Subject to Sections 5.01(e), (h), (j)
and (m), with respect to CBS Liabilities (exclusive of any Insured New Viacom
Liabilities) and CBS Losses (exclusive of any Insured New Viacom Losses),
Insured CBS Liabilities and Insured CBS Losses, CBS
and the CBS Subsidiaries shall have the right, responsibility and authority for
claims administration and financial administration of claims that relate to or
affect the Policies and for presentation and pursuit of claims for insurance
coverage under the Policies; provided, however, that upon
notification by a member of the CBS Group of a claim for coverage of any CBS
Liability (exclusive of any Insured New Viacom Liability), CBS Loss (exclusive
of any Insured New Viacom Losses), Insured CBS Liability and Insured CBS Loss
under one or more of the Policies, New Viacom and the New Viacom Subsidiaries
shall cooperate with CBS and the CBS Subsidiaries in asserting and pursuing
coverage and payment for such claims by the appropriate insurance carrier(s) or
other obligor under the Policies, including, without limitation and to the
extent reasonably necessary to ensure recoveries under or arising out of the
Policies, consenting to sue in an Action based upon or arising out of the
Policies, to be sued in an Action based upon or arising out of the Policies or
to participate in alternative dispute resolution proceedings, such as
arbitrations, based upon or arising out of the Policies (at the direction and sole
expense of CBS, after consultation between the General Counsels of New Viacom
and CBS, provided that (i) CBS shall take into account the legitimate business
interests of the New Viacom Group in determining whether to seek such consent
from New Viacom and (ii) CBS shall, upon New Viacom’s request, provide New
Viacom with a letter from CBS’s outside counsel confirming that CBS has a good
faith basis for pursuing a claim under or arising out of the Policies).  In asserting and pursuing such coverage and
payment, CBS and the CBS Subsidiaries shall have sole power and authority to
make binding decisions, determinations, commitments and stipulations on their
own behalf.  Except as otherwise provided
for in this Agreement or in any Ancillary Agreement, the members of the CBS
Group shall assume responsibility for, and shall pay to the appropriate
insurance carriers or otherwise, any Insurance Charges, whenever arising, that
shall become due and payable under the terms and conditions of any applicable
Policy in respect of any Liabilities, losses, claims, actions or occurrences,
whenever arising or becoming known, to the extent such Insurance Charges
involve or relate to any of the Assets, Businesses, operations or Liabilities
of any member of the CBS Group, whether the same relate to the period prior to,
on or after the Separation Date.  To the
extent that the terms of any applicable Policy provide that any member of the
New Viacom Group shall have an obligation to pay or guarantee the payment of
any Insurance Charges relating to any member of the CBS Group, New Viacom shall
be entitled to demand that CBS make such payment directly to the Person
entitled thereto or shall, upon demand by CBS, make such payment with funds
advanced to it by CBS.  In connection
with any such demand, New Viacom shall submit to CBS a copy of any invoice
received by New Viacom pertaining to such Insurance Charges together with
appropriate supporting documentation, to the extent available.  In the event that CBS fails to pay any such
Insurance Charges when due and payable, whether at the request of the Person
entitled to payment or upon demand by New Viacom, New Viacom may (but shall not
be required to) pay

 

55

 

such Insurance Charges for and on behalf
of CBS and, thereafter, CBS shall forthwith reimburse New Viacom for such
payment.  Subject to the other provisions
of this Article V, the responsibility for claims administration and financial
administration of such Policies in this Section 5.01(g) is in no way intended
to limit, inhibit or preclude any right of CBS, New Viacom or any other insured
to insurance coverage for any insured claims under the Policies.

 

(h)           With respect to any Joint Liability
or any Joint Loss, the right, responsibility and authority for claims
administration and financial administration of claims that relate to or affect
the Policies and for the pursuit and prosecution of claims for insurance
coverage under the Policies shall be held jointly between the members of the
New Viacom Group and the members of the CBS Group.  The members of the New Viacom Group and the
members of the CBS Group shall consult, cooperate and coordinate with each
other, including, without limitation, granting consents to the other, which
consents shall not be unreasonably withheld or delayed, with respect to such
joint claims administration, financial administration of claims, and pursuit
and prosecution of claims for insurance coverage under the Policies.  No member of the CBS Group shall commence any
litigation, arbitration, mediation or similar proceeding concerning coverage
under the Policies for such Joint Liabilities or Joint Losses without the
consent of New Viacom, which consent shall not be unreasonably withheld.  No member of the New Viacom Group shall
commence any litigation, arbitration, mediation or similar proceeding
concerning coverage under the Policies for such Joint Liabilities or Joint
Losses without the consent of CBS, which consent shall not be unreasonably
withheld.  Any insurance recoveries for
such Joint Liability or such Joint Loss shall be allocated between the members
of the CBS Group and the New Viacom Group in accordance with the portion of
insurance recoveries that is attributable to the portion of such Joint
Liability or such Joint Loss that is a CBS Liability or a CBS Loss and the
portion of such Joint Liability or such Joint Loss that is a New Viacom
Liability or New Viacom Loss, respectively.

 

(i)            Claims for coverage of Insured New
Viacom Liabilities or Insured New Viacom Losses shall be tendered by CBS as
necessary to invoke the benefit of the Policies, at New Viacom’s sole option,
cost and expense.  If such insurers do
not promptly acknowledge insurance coverage in connection with the Insured New
Viacom Liabilities or Insured New Viacom Losses, then, with respect to such
Insured New Viacom Liabilities and Insured New Viacom Losses, New Viacom or one
of the New Viacom Subsidiaries on an as-incurred basis (i) shall advance
all amounts expended by the CBS Group for or with respect to such Insured New
Viacom Liabilities or Insured New Viacom Losses, including, without limitation,
all costs and expenses in connection with the defense and settlement and in
satisfaction of any judgment incurred, and amounts sufficient to cover any Losses
required to be paid by CBS or its Subsidiaries and (ii) shall pay all
costs incurred in connection with pursuing and recovering Insurance Proceeds
with respect to the Insured New Viacom Liabilities or Insured New Viacom
Losses.  Any payments made by New Viacom
or the New Viacom Subsidiaries on account of such Insured New Viacom
Liabilities or Insured New Viacom Losses shall be deemed to be advances
pursuant to this Section 5.01(i).  New
Viacom and the New Viacom Subsidiaries shall have the right to recover any
advances made pursuant to Section 5.01(i) from CBS and the CBS Subsidiaries,
and CBS and the CBS Subsidiaries shall have the obligation promptly to
reimburse New Viacom and the New Viacom Subsidiaries for such advances, solely
from the Insurance Proceeds of the Policies that cover such Insured New Viacom
Liabilities or Insured New Viacom Losses and that are received by CBS or the
CBS Subsidiaries.  CBS and the CBS
Subsidiaries

 

56

 

(i) shall, at all times until paid
to a member of the New Viacom Group, hold Insurance Proceeds received for or
with respect to Insured New Viacom Liabilities or Insured New Viacom Losses in
trust for the benefit of New Viacom; and (ii) shall promptly remit such
Insurance Proceeds to New Viacom.

 

(j)            Claims for coverage of Insured CBS
Liabilities or Insured CBS Losses shall be tendered by New Viacom as necessary
to invoke the benefit of the Policies, at CBS’s sole option, cost and
expense.  If such insurers do not
promptly acknowledge insurance coverage in connection with the Insured CBS
Liabilities or Insured CBS Losses, then, with respect to such Insured CBS
Liabilities and Insured CBS Losses, CBS or one of the CBS Subsidiaries on an
as-incurred basis (i) shall advance all amounts expended by the New Viacom
Group for or with respect to such Insured CBS Liabilities or Insured CBS
Losses, including, without limitation, all costs and expenses in connection
with the defense and settlement and in satisfaction of any judgment incurred,
and amounts sufficient to cover any Losses required to be paid by New Viacom or
its Subsidiaries and (ii) shall pay all costs incurred in connection with
pursuing and recovering Insurance Proceeds with respect to the Insured CBS
Liabilities or Insured CBS Losses.  Any
payments made by CBS or the CBS Subsidiaries on account of such Insured CBS
Liabilities or Insured CBS Losses shall be deemed to be advances pursuant to
this Section 5.01(j).  CBS and the CBS
Subsidiaries shall have the right to recover any advances made pursuant to
Section 5.01(j) from New Viacom and the New Viacom Subsidiaries, and New Viacom
and the New Viacom Subsidiaries shall have the obligation promptly to reimburse
CBS and the CBS Subsidiaries for such advances, solely from the Insurance
Proceeds of the Policies that cover such Insured CBS Liabilities or Insured CBS
Losses and that are received by New Viacom or the New Viacom Subsidiaries.  New Viacom and the New Viacom Subsidiaries
(i) shall, at all times until paid to a member of the CBS Group, hold Insurance
Proceeds received for or with respect to Insured CBS Liabilities or Insured CBS
Losses in trust for the benefit of CBS; and (ii) shall promptly remit such
Insurance Proceeds to CBS.

 

(k)           This Agreement is not intended as an assignment
or attempted assignment of any policy of insurance or as a contract of
insurance and shall not be construed to waive any right or remedy of any member
of the CBS Group or the New Viacom Group in respect of any insurance policy or
any other contract or policy of insurance except to the extent such assignment
is permitted by the terms of such policy in accordance with the applicable Law
and New Viacom and CBS have agreed to such assignment.  New Viacom and CBS have agreed to such
assignment of the Policies listed on a schedule mutually agreeable to New
Viacom and CBS.  Nothing in this
Agreement shall be deemed to confer any insurance-related rights other than
those provided under the terms of any applicable Policy on any party other than
the members of the CBS Group and New Viacom Group, each of their insured
persons and their respective successors-in-interest and respective permitted
assignees in accordance with Sections 13.07 and 13.08, including, without
limitation, any right to enforce for any other party’s own benefit the
arrangements made by CBS and New Viacom in subparagraph (m) hereof.

 

(l)            Nothing
in this Agreement shall be deemed to restrict any member of the New Viacom
Group or the CBS Group from acquiring at its own expense any insurance policy
in respect of any Liabilities or covering any period.  Except as otherwise provided in this
Agreement, from and after the Separation Date, New Viacom and CBS shall be
responsible for

 

57

 

obtaining and maintaining their
respective insurance programs for their risk of loss and such insurance
arrangements shall be separate programs apart from each other.

 

(m)          For
purposes of the exhaustion of any limits that apply to coverage available under
the Policies and for purposes of exhaustion of any caps, stop-losses, limits or
maximums that apply to any Insurance Charges, amounts shall be allocated to the
Policies on a first come/first served basis. 
That means that amounts covered by such Policies (including, without
limitation, amounts paid as defense costs, settlements or judgments) shall be
allocated to such Policies in the order in which valid claims for payment of
such amounts were submitted under the Policies by any member of the CBS Group
or New Viacom Group.  With respect to the
application of the first come/first served principles, the members of the CBS
Group and New Viacom Group shall act in good faith and avoid taking any actions
for the purpose or with the intention of accelerating or delaying their payment
of such amounts or their submission of claims under the Policies in order to
obtain some advantage with respect to the exhaustion of applicable limits or
with respect to the application of the Insurance Charges under the Policies; provided,
however, that in the event that both CBS and New Viacom or any of their
respective Subsidiaries make claims under any Policy which may or do
individually or together exceed the amount of any applicable Policy limit or
sublimit, or any cap, stop-loss, limit or maximum that may apply to any
Insurance Charges, under such Policies, a fair and reasonable allocation of
such policy limit or sublimit, or any such cap, stop-loss, limit or maximum
that may apply to any Insurance Charges, shall be made between New Viacom and CBS
(the “Allocation”).  CBS and New
Viacom shall negotiate the Allocation in good faith for a period not to exceed
30 days.  If CBS and New Viacom fail to
agree upon the Allocation within such 30-day period, then each party shall be
free to deliver an Escalation Notice pursuant to Section 10.02(a) and otherwise
follow the dispute resolution provisions of Section 10.02.  For purposes of such Allocation as it relates
to Insurance Charges, the parties agree that such Allocation shall be governed
by the principle that the portion of any cap, stop-loss, limit or maximum
applicable to an Insurance Charge that is unexhausted as of the Separation Date
(“Unexhausted Insurance Charges”) is to be allocated on a 50/50 basis as
between the members of the CBS Group, on the one hand, and the members of the
New Viacom Group, on the other hand, to the extent, but only to the extent,
that any member of one Group ultimately receives the benefit of Insurance
Proceeds as a result of the exhaustion of the Unexhausted Insurance Charges by
virtue of payments ultimately made by any member of the other Group in an
amount greater than 50% of such Unexhausted Insurance Charges.  By way of illustration of this principle, if
(i) the unexhausted aggregate self-insured retention as of the Separation
Date were $1,000,000; (ii) a member of the CBS Group incurred a loss in
the amount of $1,000,000, which loss was properly credited to the aggregate
self-insured retention; and (iii) subsequently a member of the New Group
incurred a loss in the amount of $200,000 and recovered Insurance Proceeds in
the amount of $200,000, which amount would have been subject to the aggregate
self-insured retention but for the $1,000,000 claim of such member of the CBS
Group, such member of the CBS Group would have the right to recover from such
member of the New Viacom Group the amount of $200,000.

 

(n)           Prior
to the Separation Date, Viacom shall take all reasonable steps necessary to
ensure that New Viacom and the New Viacom Subsidiaries are designated as named
insureds, additional insureds or additional named insureds on each Policy in
force as of the Separation Date with respect to insurable events occurring on
or before the Separation Date.

 

58

 

Section 5.02           Captive
Insurance and Reinsurance Companies.

 

The
assets and liabilities of captive insurers Woburn Insurance Limited, Sammarnick
Insurance Corporation, Central Fidelity Insurance Company, Blackrock Insurance
Corporation and any other captive insurer of Viacom and its Subsidiaries and
the rights of the members of the New Viacom Group and the members of the CBS
Group with respect to Policies issued by such captives, shall be treated in
Schedule 5.02.  Such schedule shall
reflect the principle that, except to the extent actually recoverable from
third parties under reinsurance, retrocession or comparable arrangements or
covered by existing funded reserves or other existing assets, no captive
insurer that is a member of the New Viacom Group shall have any out-of-pocket Loss
as a result of claims made directly or indirectly by any member of the CBS
Group, and no captive insurer that is a member of the CBS Group shall have any
out-of-pocket Loss as a result of claims made directly or indirectly by any
member of the New Viacom Group.  The
parties agree this section is not intended to constitute an allocation of any
assets or reserves of any such captive insurers unless or until agreed to by
the parties as set forth in such schedule.

 

Section 5.03           Claims Made Policies.

 

(a)           Viacom shall purchase Directors and
Officers liability insurance Policies having total limits of $250 million,
consisting of $100 million of Side A, Side B and Side C coverage and $150
million of Excess Side A Difference in Conditions Coverage and having a policy
period incepting on the Separation Date and ending on a date that is six years
after the Separation (“D&O Tail Policies”).  Such D&O Tail Policies shall cover the
members of the CBS Group and New Viacom Group and the insured persons thereof
and shall have material terms and conditions no less favorable than those
contained in the Policies comprising the Viacom Directors and Officers
liability insurance program incepting on April 20, 2005, except for the policy
period, premium and provisions excluding coverage for wrongful acts post-dating
the Separation Date.

 

(b)           Viacom shall purchase fiduciary
liability policies having total limits of $50 million and having a policy
period incepting on the Separation Date and ending on a date six years after
the Separation Date (“Fiduciary Tail Policies”).  Such Fiduciary Tail Policies shall cover the
members of the CBS Group and New Viacom Group and the insured persons thereof
and shall have material terms and conditions no less favorable than those
contained in the Policies comprising the Viacom fiduciary liability insurance
program incepting on October 31, 2004, except for the policy period, premium
and provisions excluding coverage for wrongful acts post-dating the Separation
Date.

 

(c)           Viacom shall ensure that employment
practices liability insurance policies having total limits of $25 million are
in force as of the Separation Date (“EPLI Policies”).  Such EPLI Policies shall be in force through
December 31, 2006, shall cover the members of the New Viacom Group and the
insured persons thereof, shall contain no provision excluding coverage for
wrongful acts predating the Separation Date, and shall have material terms and
conditions no less favorable than those contained in the Policies comprising
the Viacom employment practices liability insurance program incepting on
October 31, 2004, except for the policy period and premium.

 

59

 

(d)           Viacom shall ensure that errors and
omissions liability insurance having total limits of $70 million are in force
as of the Separation Date (“E&O Policies”).  Such E&O Policies shall be in force
through December 31, 2006, shall cover the members of the New Viacom Group and
the insured persons thereof, shall contain no provision excluding coverage for
wrongful acts predating the Separation Date, and shall have material terms and
conditions no less favorable than those contained in the Policies comprising
the Viacom errors and omissions liability insurance program incepting on June
30, 2005, except for the policy period and premium.

 

(e)           To the extent that Viacom is unable
prior to the Separation Date to obtain any of the policies as provided for in
paragraphs (a) through (d) of this Section 5.03, then, with respect to claims
based on wrongful acts on or before the Separation Date, CBS shall use
reasonable commercial efforts to secure appropriate alternative insurance
coverage to provide benefits on terms and conditions (including policy limits)
in favor of New Viacom and its Subsidiaries and the insured persons thereof no
less favorable than the benefits (including policy limits) that were to be
afforded by the policies described in paragraphs (a) through (d) of this
Section 5.03 for the six-year period (with respect to the policies provided for
in paragraphs (a) and (b)) and the six-year period (with respect to the
policies provided for in paragraphs (c) and (d)) following the Separation
Date.  With respect to such alternative
insurance coverage, New Viacom and CBS shall share equally that portion of any
premium that is separately ascertainable and directly attributable to the lack
of a provision excluding coverage for claims based on wrongful acts up to and
including the Separation Date.  CBS shall
not under any circumstances purchase any such alternative coverage containing
an exclusion for claims based on wrongful acts up to and including the
Separation Date to the extent such exclusion would preclude coverage for New
Viacom, its Subsidiaries and/or the insured persons thereof, but would not preclude
coverage for CBS, its Subsidiaries and/or the insured persons thereof.

 

Section 5.04           Miscellaneous.

 

(a)           Each of the parties intends by this
Agreement that a third-party Person, including a third-party insurer or
reinsurer, or other third-party Person that, in the absence of the Agreement
would otherwise be obligated to pay any claim or satisfy any indemnity or other
obligation, shall not be relieved of the responsibility with respect thereto
and shall not be entitled to a “windfall” (i.e., avoidance of the obligation
that such Person would have in the absence of this Agreement).  To the extent that any such Person would
receive such a windfall, CBS and New Viacom shall negotiate in good faith
concerning an amendment of this Agreement to avoid such a windfall.

 

(b)           The parties agree that Insurance
Proceeds and Insurance Charges with respect to certain specified known claims
shall be allocated pursuant to a schedule to be mutually agreed upon.

 

(c)           For a period of six years from the
Separation Date, the Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of CBS shall contain provisions no less favorable
with respect to indemnification than are set forth in the Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws of CBS immediately
after giving effect to the Merger, which provisions shall not be amended,
repealed or otherwise modified for

 

60

 

a
period of six years from the Separation Date in any manner that would affect
adversely the rights thereunder of individuals who, at or prior to the
Separation Date, were directors, officers, employees, fiduciaries or agents of
Viacom or any of its Subsidiaries, unless such modification shall be required
by Law and then only to the minimum extent required by Law.

 

ARTICLE VI

 

EMPLOYEE MATTERS

 

Section 6.01           Defined
Benefit Pension Plans.

 

(a)           Viacom Defined Benefit Pension
Plans.  CBS shall retain, and remain
the sponsor of, the Viacom Defined Benefit Pension Plans.  Active participation of New Viacom Employees
(except for any New Viacom Employees who are also CBS Employees) and Former New
Viacom Employees in the Viacom Defined Benefit Pension Plans shall cease
immediately as of the Separation Date. 
Except as otherwise provided herein with respect to the Viacom Pension
Plan and the CCPP, all Assets and Liabilities of the Viacom Defined Benefit
Pension Plans shall remain with CBS.

 

(b)           New Viacom Defined Benefit Pension
Plan.  On or prior to and with effect
as of the Separation Date, New Viacom shall establish and adopt a defined
benefit pension plan and related trust (the “New Viacom Defined Benefit
Pension Plan”) to provide retirement benefits to New Viacom Employees
(whether or not vested) and Former New Viacom Employees who were participants
in, or entitled to present or future benefits under, the Viacom Defined Benefit
Pension Plans immediately prior to the Separation Date (the “New Viacom
Transferred Pension Employees”).  The
New Viacom Defined Benefit Pension Plan will initially have terms and
conditions that are substantially similar to the terms and conditions of the
Viacom Pension Plan.  New Viacom shall be
responsible for taking all necessary, reasonable, and appropriate action to
establish, maintain and administer the New Viacom Defined Benefit Pension Plan
so that it is qualified under Section 401(a) of the Code and that the
related trust thereunder is exempt under Section 501(a) of the Code.  On one or more occasions following the
establishment of the New Viacom Defined Benefit Pension Plan and before the
Initial Transfer Date, CBS shall cause the Viacom Pension Plan to transfer to
the New Viacom Defined Benefit Pension Plan an amount in cash at least
sufficient to fund benefit payments reasonably projected to be required under
the New Viacom Defined Benefit Pension Plan prior to the Initial Transfer Date
(collectively, the “Transitional Cash Transfers”).  To the extent that, prior to the Initial
Transfer Date, such Transitional Cash Transfers are not sufficient to enable
the New Viacom Defined Benefit Pension Plan to meet its obligations to pay
benefits to the New Viacom Transferred Pension Employees (including, without
limitation, benefits that have accrued under the New Viacom Defined Benefit
Pension Plans following the Separation Date) as they come due for payment, such
benefits shall be paid from the Viacom Pension Plan (the aggregate amount of
any such payments by the Viacom Pension Plan being the “Interim Benefit
Obligation Payment Amount”; and, collectively with the Transitional Cash
Transfers, the “Transitional Asset Transfers”).  New Viacom shall be solely responsible for
any and all Liabilities (including, without limitation, Liability for funding)
and other obligations with respect to the New Viacom Defined Benefit Pension
Plan following the assumption of the Viacom Pension Plan Liabilities and the
transfer of related Assets in accordance with Sections 6.01(c) and
6.01(d).  New Viacom (x) shall, prior to

 

61

 

the Initial Transfer Date (as defined
in Section 6.01(d)(iii)), obtain an opinion from counsel that the New Viacom
Defined Benefit Pension Plan is qualified in form under Section 401(a) of the
Code and (y) shall, by the time required under the applicable Treasury
regulations, submit an application for an IRS Determination Letter with respect
to the New Viacom Defined Benefit Pension Plan.

 

(c)           Assumption of Viacom Pension Plan
Liabilities.  Effective as of the Separation Date, New Viacom
will cause the New Viacom Defined Benefit Pension Plan to assume, and to pay in
full, all accrued benefits under the Viacom Pension Plan relating to all New
Viacom Transferred Pension Employees as of the Separation Date (inclusive of
benefits paid by the Viacom Pension Plan to New Viacom Transferred Pension
Employees following the Separation Date in accordance with
Section 6.01(b), and inclusive of benefits attributable to Lost
Participants to the extent provided in Section 6.01(h)).

 

(d)           Transfer of Viacom Pension Plan
Assets.

 

(i)            Viacom and New Viacom intend that the portion of the
Assets of the Viacom Pension Plan corresponding to the accrued benefits of New
Viacom Transferred Pension Employees and the Liability for such benefits shall
be transferred to the New Viacom Defined Benefit Pension Plan in accordance
with Section 414(l) of the Code, Treasury Regulation
Section 1.414(l)-1 and Section 208 of ERISA.  Prior to the date of the first Transitional
Cash Transfer, Viacom and New Viacom shall, to the extent necessary, file an
IRS Form 5310-A regarding the transfer of Assets and Liabilities from the
Viacom Pension Plan to the New Viacom Defined Benefit Pension Plan.

 

(ii)           As soon as reasonably practicable following the
Separation, CBS shall cause the CBS Actuary to determine the estimated value,
as of the Separation Date, of the Assets to be transferred to the New Viacom
Defined Benefit Pension Plan in accordance with the assumptions and valuation
methodology set forth on Schedule 6.01(d)(ii) (the “Estimated Pension
Plan Transfer Amount”).  Promptly
following the calculation of the Estimated Pension Plan Transfer Amount, CBS
shall cause the CBS Actuary to provide New Viacom and the New Viacom Actuary
with such calculation and any supporting documentation reasonably requested by
the New Viacom Actuary to enable it to review such calculation.  The costs of such determination by the CBS
Actuary and such review by the New Viacom Actuary shall be divided equally
between CBS and New Viacom.  CBS and New
Viacom shall cause their respective actuaries to cooperate in good faith to
resolve any disagreements or differences concerning the Estimated Pension Plan
Transfer Amount.

 

(iii)          Within thirty (30) days (or such later time as
mutually agreed to by CBS and New Viacom) following the determination of the
Estimated Pension Plan Transfer Amount, CBS and New Viacom shall cooperate in
good faith to cause an initial transfer of Assets (the date of such transfer,
the “Initial Transfer Date”) from the Viacom Pension Plan to the New
Viacom Defined Benefit Pension Plan in an amount equal to at least ninety
percent (90%) of the Estimated Pension Plan Transfer Amount minus the aggregate
amount of the Transitional Asset Transfers, adjusted to reflect earnings or
losses during the period from the Separation Date to the Initial Transfer Date
(such amount, the “Initial Transfer Amount”). Such earnings or losses
shall be determined based on the actual rate of return of the Viacom Pension
Plan for the period

 

62

 

commencing
on the Separation Date and ending on the last calendar day of the month ending
immediately prior to the Initial Transfer Date. 
Earnings or losses for the period from such last day of the month to the
Initial Transfer Date shall be based on a blended index as follows:
(thirty-seven percent (37%) Russell 1000 Index; eight percent (8%) Russell 2000
Index;   fifteen percent (15%) EAFE
Index; thirty-seven percent (37%) Lehman Aggregate Index; and three percent
(3%) 30-Day U.S. Treasury Bills) (the “Blended Index”) determined as of
the date that is as close as administratively practicable to the Initial
Transfer Date, but in no event more than five (5) business days prior to
the Initial Transfer Date.  CBS shall
satisfy its obligation pursuant to this Section 6.01(d)(iii) by
transferring Assets, in cash or in kind, as mutually agreed to by CBS and New
Viacom, equal to the Initial Transfer Amount consisting of a pro rata
percentage (rounded up or down to the nearest whole lot or distributable unit)
of substantially all investments under the Viacom Pension Plan or such other
distribution of investments as may be mutually agreed to by CBS and New Viacom.

 

(iv)          Within ninety (90) days following the Initial Transfer
Date, CBS shall cause the CBS Actuary to provide New Viacom with a revised
calculation of the value, as of the Separation Date, of the Assets to be
transferred to the New Viacom Defined Benefit Pension Plan determined in
accordance with the assumptions and valuation methodology set forth on
Schedule 6.01(d)(ii) attached hereto (the “Revised Pension Plan
Transfer Amount”).  New Viacom may
submit, at its sole cost and expense, the Revised Pension Plan Transfer Amount
to the New Viacom Actuary for verification; provided that such
verification process and any calculation performed by the New Viacom Actuary in
connection therewith shall be performed solely on the basis of the assumptions
and valuation methodology set forth on Schedule 6.01(d)(ii).  Furthermore, the CBS Actuary and New Viacom
Actuary shall cooperate in good faith to ensure that any such verification
process is performed in a timely manner. 
In the event the New Viacom Actuary determines that the value, as of the
Separation Date, of the Assets to be transferred to the New Viacom Defined
Benefit Pension Plan differs from the Revised Pension Plan Transfer Amount, the
New Viacom Actuary and CBS Actuary shall use good faith efforts to reconcile
any such difference.  If the New Viacom
Actuary and the CBS Actuary fail to reconcile such difference and (A) the
New Viacom Actuary’s calculation is within two percent (2%) of the Revised
Pension Plan Transfer Amount, the average of the Revised Pension Plan Transfer
Amount and the New Viacom Actuary’s calculation shall be used; or (B) the
difference between the New Viacom Actuary’s calculation and the Revised Pension
Plan Transfer Amount exceeds two percent (2%), New Viacom and CBS shall jointly
designate a third, independent actuary whose calculation of the value, as of
the Separation Date, of the Assets to be transferred to the New Viacom Defined
Benefit Pension Plan shall be final and binding; provided that such
calculation must be performed in accordance with the assumptions and valuation
methodology set forth on Schedule 6.01(d)(ii); provided  further
that such value shall be between the value determined by the New Viacom Actuary
and the Revised Pension Plan Transfer Amount or equal to either such
value.  CBS and New Viacom shall each pay
one-half of the costs incurred in connection with the retention of such
independent actuary.  The final, verified
value, as of the Separation Date, of the Assets to be transferred to the New
Viacom Defined Benefit Pension Plan as determined in accordance with this
Section 6.01(d)(iv) shall be referred to herein as the “Final Pension
Plan Transfer Amount.”

 

(v)           Within forty-five (45) days of the determination of
the Final Pension Plan Transfer Amount, CBS shall cause the Viacom Pension Plan
to transfer to the New Viacom

 

63

 

Defined
Benefit Pension Plan (the date of such transfer, the “Final Transfer Date”)
an amount, in cash or kind, equal to:

 

(A)                              the
Final Pension Plan Transfer Amount; minus

 

(B)                                the
sum of:

 

(1)                                  the
Initial Transfer Amount, excluding earnings or losses that were included
therein pursuant to Section 6.1(d)(iii), plus

 

(2)                                  the
Transitional Asset Transfers,

 

as adjusted to reflect earnings or losses, calculated
as described below in this Section 6.01(d)(v), during the period from the
Separation Date to the Final Transfer Date (such adjusted amount, the “True-Up
Amount”); provided that in the event the sum of paragraphs (1) and
(2) above is greater than the Final Pension Plan Transfer Amount, CBS
shall not be required to cause any such additional transfer and instead New
Viacom shall be required to cause a transfer of cash from the New Viacom
Defined Benefit Pension Plan to the Viacom Pension Plan in an amount equal to
the amount by which the sum of paragraphs (1) and (2) above exceeds
the Final Pension Plan Transfer Amount (with such excess amount adjusted to
reflect earnings and losses during the period from the Separation Date to the
Final Transfer Date).  The parties hereto
acknowledge that the Viacom Pension Plan’s transfer of the True-Up Amount to the
New Viacom Defined Benefit Pension Plan shall be in full settlement and
satisfaction of the obligations of CBS and the Viacom Pension Plan to transfer
Assets to the New Viacom Defined Benefit Pension Plan pursuant to this
Section 6.01(d).  The True-Up Amount
shall be paid from the Viacom Pension Plan to the New Viacom Defined Benefit
Pension Plan, in cash or in kind. 
Earnings or losses included in the True-Up Amount shall be determined
based on the actual rate of return of the Viacom Pension Plan without regard to
the Excluded Investments for the period commencing on the Separation Date and
ending on the last calendar day of the month ending immediately prior to the
Final Transfer Date.  Earnings or losses
for the period from such last day of the month to the Final Transfer Date shall
be based on the Blended Index determined as of the date that is as close as
administratively practicable to the Final Transfer Date, but in no event more
than five (5) business days prior to the Final Transfer Date.  In the event that New Viacom is obligated to
cause the New Viacom Defined Benefit Pension Plan to reimburse the Viacom
Pension Plan pursuant to this Section 6.01(d)(v), such reimbursement shall
be performed in accordance with the same principles set forth herein with
respect to the payment of the True-Up Amount. 
Any expenses paid or accrued from the trust of the Viacom Pension Plan
during the period from the Separation Date to the Final Transfer Date shall be
allocated between the parties as mutually agreed to by the parties.

 

(e)           Continuation of Elections.  As
of the Separation Date, New Viacom shall cause the New Viacom Defined Benefit
Pension Plan to recognize and maintain all existing elections, including,
without limitation,  beneficiary
designations, payment form elections and rights of alternate payees under
qualified domestic relations orders with respect to New Viacom Transferred
Pension Employees under the Viacom Pension Plans.

 

64

 

(f)            Certain Former Viacom Employees.  New Viacom shall reimburse CBS for 50% of all
liabilities under the Viacom Defined Benefit Pension Plans incurred in respect
of all individuals described in clause (iii) of the definition of “Former CBS
Employee.”  CBS shall reimburse New Viacom
for 50% of all liabilities under the New Viacom Defined Benefit Pension Plan
incurred in respect of all individuals described in clause (iii) of the
definition of “Former New Viacom Employee.” 
Such reimbursement amounts shall be determined and made pursuant to
documented procedures mutually agreed to by CBS and New Viacom and shall not
affect the calculations and asset transfers provided for in
Section 6.01(d).

 

(g)           Terminated Non-Vested Employees.  Notwithstanding
anything herein to the contrary, the New Viacom Defined Benefit Pension Plan
shall fully restore the accrued benefit of any individual who becomes employed
by any member of the New Viacom Group following the Separation Date and whose
employment with Viacom and its Subsidiaries terminated on or before the
Separation Date with no vested benefit under the Viacom Defined Benefit Pension
Plans; provided that, pursuant to Viacom’s existing practices and
policies, such individual would have been entitled to restoration of such
individual’s accrued benefit under the applicable Viacom Defined Benefit
Pension Plan had such individual been re-employed by a member of the CBS Group
rather than by a member of the New Viacom Group.

 

(h)           Lost Participants.  Viacom
and New Viacom acknowledge that there may be participants in the Viacom Defined
Benefit Pension Plans whose accrued benefit Liability is not recognized by the
actuary for the Viacom Defined Benefit Pension Plans as of the Separation Date
(“Lost Participants”).  To the
extent that any Lost Participants become known following the Separation
Date:  (i) the Viacom Defined
Benefit Pension Plans will be responsible for and will fully perform, pay and
discharge all obligations, when such obligations become due, relating to
benefits attributable to Lost Participants who are Former CBS Employees or
Current CBS Employees; and (ii) the New Viacom Defined Benefit Pension Plan
will be responsible for and will fully perform, pay and discharge all
obligations, when such obligations become due, relating to benefits attributable
to Lost Participants who are Former New Viacom Employees or Current New Viacom
Employees; provided, however, that CBS and New Viacom will share
responsibility for all such obligations relating to benefits attributable to
Lost Participants who are Unallocated Employees, and each of CBS and New Viacom
will reimburse the other for 50% of all such obligations paid or discharged by
(in the case of CBS’s reimbursement obligation) the New Viacom Defined Benefit
Pension Plan or (in the case of New Viacom’s reimbursement obligation) the
Viacom Defined Benefit Pension Plans, as the case may be, according to
procedures mutually agreed to by CBS and New Viacom.  CBS and New Viacom will cooperate in
determining the application of this Section 6.01(h) so that any obligations
owed to a Lost Participant who becomes known following the Separation Date are
appropriately allocated in accordance herewith.

 

(i)            Action in the Event of PBGC
Intervention.  Notwithstanding any
provision of this Agreement to the contrary, in the event that at any time the
Pension Benefit Guaranty Corporation (the “PBGC”) asserts that the
Separation may provide justification for the PBGC to seek termination of any
Viacom Defined Benefit Pension Plan pursuant to ERISA Sec. 4042 or otherwise
asserts that the transaction may increase unreasonably the long-run loss to the
PBGC (within the meaning of Section 4042(a)(4) of ERISA) with respect to
any Viacom Defined Benefit Pension Plan, Viacom may, in its sole discretion (i)
retain all Assets and Liabilities with

 

65

 

respect to New Viacom Employees and
Former New Viacom Employees under the Viacom Defined Benefit Pension Plans and
require New Viacom to provide equivalent benefits under the New Viacom Defined
Benefit Pension Plans with an offset for any benefits continued to be provided
under the Viacom Defined Benefit Pension Plans, (ii) enter into negotiations
with the PBGC to resolve these issues and, upon satisfactorily resolving such
issues, New Viacom shall fully comply with the terms of this Section 6.01, or
(iii) reach such other agreement as may be satisfactory to Viacom and New
Viacom.

 

(j)            Transfers from the CCPP.  In the event that any active participants in
the CCPP transfer employment to the New Viacom Group in connection with the
Separation, CBS and New Viacom shall cooperate to effect a transfer from the
CCPP to the New Viacom Defined Benefit Pension Plan of the Assets and
Liabilities corresponding to the accrued benefits of such participants in
accordance with the principles and procedures set forth in Section 6.01(c) and
Section 6.01(d), with such modifications as they shall consider appropriate to
reflect the number of such participants and the magnitude of such transferred
Assets and Liabilities.  CBS and New
Viacom shall cooperate in good faith to cause such transfer to occur as soon as
practicable after the Separation Date.

 

Section 6.02           401(k)
Plans.

 

(a)           Viacom 401(k) Plan.  CBS shall retain, and remain the sponsor of,
the Viacom 401(k) Plan.  Active
participation of New Viacom Employees (except for any New Viacom Employees who
are also CBS Employees) and Former New Viacom Employees in the Viacom 401(k)
Plan shall cease immediately as of the Separation Date.

 

(b)           New Viacom 401(k) Plan.

 

(i)            On or prior to and with effect as of the Separation Date,
New Viacom shall establish and adopt a defined contribution plan and trust (the
“New Viacom 401(k) Plan”) for the benefit of New Viacom Employees and
Former New Viacom Employees who were participants in the Viacom 401(k) Plan
immediately prior to the Separation Date (the “New Viacom Transferred 401(k)
Plan Employees”).  The New Viacom
401(k) Plan will initially have terms and conditions that are substantially
similar to the terms and conditions of the Viacom 401(k) Plan.  New Viacom shall be responsible for taking
all necessary, reasonable and appropriate action to establish, maintain and
administer the New Viacom 401(k) Plan so that it is qualified under Section 401(a)
of the Code and that the related trust thereunder is exempt under
Section 501(a) of the Code.  New
Viacom shall be responsible for any and all Liabilities (including, without
limitation, Liability for funding) and other obligations with respect to the
New Viacom 401(k) Plan.  The account
balance of each New Viacom Transferred 401(k) Plan Employee, whether or not
vested, shall be transferred from the Viacom 401(k) Plan to the New Viacom
401(k) Plan in accordance with this Section 6.02.

 

(ii)           Prior to the date on which the transfer of assets and
liabilities to the New Viacom 401(k) Plan shall occur (the “New Viacom
401(k) Plan Transfer Date”), which date shall occur as promptly as
practicable (but not later than thirty (30) days or such later time as required
to make all required filings and submissions to the appropriate Governmental
Authorities as set forth in (B) below)) following the Separation Date, CBS
shall (A) cause the

 

66

 

trustee
of the Viacom 401(k) Plan to segregate, in accordance with the spinoff
provisions set forth under Section 414(l) of the Code, the Assets of the Viacom
401(k) Plan representing the full account balances of the New Viacom
Transferred 401(k) Plan Employees for all periods of participation through the
New Viacom 401(k) Plan Transfer Date (including, as applicable, all
contributions and all earnings attributable thereto); (B) make all required
filings and submissions to the appropriate Governmental Authorities (if any);
and (C) make all required amendments to the Viacom 401(k) Plan and related
trust agreement necessary to provide for the segregation and transfer of Assets
described in this Section 6.02.  New
Viacom (x) shall, prior to the New Viacom 401(k) Plan Transfer Date, obtain an
opinion from counsel that the New Viacom 401(k) Plan is qualified in form under
Section 401(a) of the Code and (y) shall, by the time required under the
applicable Treasury regulations, submit an application for an IRS Determination
Letter with respect to the New Viacom 401(k) Plan.

 

(iii)          On the New Viacom 401(k) Plan Transfer Date, CBS shall
cause the trustee of the Viacom 401(k) Plan to transfer to the trustee of the
New Viacom 401(k) Plan (A) the full account balances (inclusive of loans)
of the New Viacom Transferred 401(k) Plan Employees in kind from those
investment funds in which such account balances are then invested, plus
(B) an amount in cash equal to a portion of the forfeiture account of the
Viacom 401(k) Plan determined by multiplying the balance of such account
immediately before such transfer by a fraction the numerator of which is the
amount determined in accordance with the preceding paragraph (A) of this
sentence and the denominator of which is the aggregate of all participant
account balances in the Viacom 401(k) Plan immediately before such
transfer.  In consideration of the
transfer of Assets described herein, the New Viacom 401(k) Plan shall, as of
the New Viacom 401(k) Plan Transfer Date, assume and be solely responsible for
all Liabilities attributable to such Assets.

 

(c)           Outstanding Loans.  During their employment with New Viacom or
any New Viacom Subsidiary, the New Viacom Transferred 401(k) Plan Employees who
have outstanding loans originally made from the Viacom 401(k) Plan shall be
permitted to repay such loans by way of regular deductions from their
paychecks.  In the event that any such
repayments are made before the New Viacom 401(k) Plan Transfer Date, New Viacom
shall cause all such deductions to be forwarded to the Viacom

401(k) Plan as promptly as practicable.

 

(d)           Continuation of Elections.  As
of the Separation Date, New Viacom shall cause the New Viacom 401(k) Plan to
recognize and maintain all elections, including, without limitation, deferral,
investment and payment form elections, beneficiary designations, and the rights
of alternate payees under qualified domestic relations orders with respect to
New Viacom Transferred 401(k) Employees under the Viacom 401(k) Plan; provided
that investment elections relating to the Viacom Common Stock fund under the
Viacom 401(k) Plan shall be deemed to apply to the New Viacom Common Stock fund
under the New Viacom 401(k) Plan.

 

(e)           Terminated Non-Vested Employees.  Notwithstanding
anything herein to the contrary, the New Viacom 401(k) Plan shall fully restore
the unvested portion of the account of any individual who becomes employed by
any member of the New Viacom Group following the Separation Date and whose
employment with Viacom and its Subsidiaries (inclusive of New Viacom)
terminated on or before the Separation Date with a portion of such individual’s
benefits under the Viacom 401(k) Plan not being vested; provided that,
pursuant to Viacom’s existing

 

67

 

practices and policies, such individual
would have been entitled to the restoration of the unvested portion of such
individual’s Viacom 401(k) Plan account had such individual been rehired by a
member of the CBS Group rather than a member of the New Viacom Group.

 

(f)            Stock Considerations.  To the extent that CBS Employees and Former
CBS Employees receive shares of New Viacom Common Stock in connection with the
Separation with respect to Viacom Common Stock held under the Viacom 401(k)
Plan, such shares will be deposited in a New Viacom Common Stock fund under the
Viacom 401(k) Plan, and will be held in such plan subject to the discretion of
the Viacom 401(k) Plan fiduciary.  To the
extent that New Viacom Employees or Former New Viacom Employees hold shares of
CBS Common Stock in their CBS Common Stock fund under the New Viacom 401(k)
Plan following the transfer from the Viacom 401(k) Plan to the New Viacom
401(k) Plan set forth in Section 6.02(b), the New Viacom 401(k) Plan shall
permit such employees to continue to hold such shares in a CBS Common Stock
fund under the New Viacom

401(k) Plan following such transfer, subject to the discretion of the New
Viacom 401(k) Plan fiduciary.  CBS and
New Viacom shall assume sole responsibility for ensuring that their respective
401(k) Plans are maintained in compliance with applicable laws with respect to
holding shares of common stock of the other entity.

 

Section 6.03           Executive
Benefit Plans.

 

(a)           Executive Benefit Plans.  Effective as of the Separation Date, New
Viacom shall retain and be solely responsible for (and, to the extent that it
was not responsible prior to the Separation Date, shall assume) all Liabilities
to or relating to the New Viacom Employees and the Former New Viacom Employees
under all Viacom Executive Benefit Plans, and New Viacom specifically acknowledges
that all such Liabilities are New Viacom Liabilities (and are not CBS
Liabilities).  Active participation of
New Viacom Employees (except for any New Viacom Employees who are also CBS
Employees) and Former New Viacom Employees in the Viacom Executive Benefit
Plans shall cease immediately as of the Separation Date.  Effective as of the Separation Date, CBS
shall retain and be solely responsible for all Liabilities to or relating to
the CBS Employees and the Former CBS Employees under all Viacom Executive Benefit
Plans, and CBS specifically acknowledges that all such Liabilities are CBS
Liabilities (and are not New Viacom Liabilities).  Notwithstanding the three preceding
sentences, (i) New Viacom shall reimburse CBS for 50% of all liabilities
to or relating to individuals described in clause (iii) of the definition of “Former
CBS Employee” under all Viacom Executive Benefit Plans and (ii) CBS shall
reimburse New Viacom for 50% of all liabilities to or relating to individuals
described in clause (iii) of the definition of “Former New Viacom Employee”
under all New Viacom Executive Benefit Plans; such reimbursement amounts shall
be determined and made pursuant to documented procedures mutually agreed to by
CBS and New Viacom.  Effective as of the
Separation Date, New Viacom shall establish and adopt executive benefit plans
that are substantially comparable, in the aggregate, to the Viacom Executive
Benefit Plans (such plans, the “New Viacom Executive Benefit Plans”) to
provide benefits to New Viacom Employees and Former New Viacom Employees from
and after the Separation Date who were participants in the Viacom Executive
Benefit Plans as of the date immediately prior to the Separation Date.  As of the Separation Date, New Viacom shall
cause the New Viacom Executive Benefit Plans to recognize and maintain all
elections (including, without limitation, deferral, distribution and investment
elections) and beneficiary designations with respect to New Viacom Employees
and

 

68

 

Former New Viacom Employees under the
Viacom Executive Benefit Plans, to the extent permitted by the Code (including,
without limitation, Section 409A thereof) and other applicable Laws.

 

(b)           Bonus Plans.  With respect to the year in which the Separation
Date occurs (and, if applicable, the preceding year), CBS shall have exclusive
responsibility for annual bonuses (and any transaction bonuses related to the
Separation) payable to CBS Employees, and New Viacom shall have exclusive
responsibility for annual bonuses (and any transaction bonuses related to the
Separation) payable to New Viacom Employees. 
New Viacom shall be responsible for determining all bonus awards that
would otherwise be payable under the Viacom Senior Executive Short-Term
Incentive Plan to New Viacom Employees for the year in which the Separation
Date occurs (and, if applicable, the preceding year).  New Viacom shall also determine for New
Viacom Employees (i) the extent to which established performance criteria (as
interpreted by New Viacom, in its sole discretion) have been met and (ii) the
payment level for each New Viacom Employee. 
Responsibility for annual bonuses and any transaction bonuses related to
the Separation payable to Unallocated Employees will be shared equally by CBS and
New Viacom.  CBS and New Viacom shall
cooperate with each other to ensure that the other party has reasonable access
to the information relevant to annual bonus determinations by the other party.  CBS and New Viacom shall also cooperate with
a view to achieving parity in bonus awards among employees who, before the
Separation, were Viacom corporate office employees or Paramount corporate
office employees and shall consult with each other in determining the amount of
such awards.

 

Section 6.04           Welfare
Plans.

 

(a)           Viacom Welfare Plans.  Following the Separation Date, CBS shall
continue to sponsor the Viacom Welfare Plans for the benefit of the CBS
Employees and the Former CBS Employees. 
CBS shall also retain the CBS Voluntary Employee Benefits Trust.  Except as provided in Section 6.04(g), active
participation of New Viacom Employees (except for any New Viacom Employees who
are also CBS Employees) and Former New Viacom Employees in the Viacom Welfare
Plans shall cease immediately as of the Separation Date.

 

(i)            Except as set forth in Section 6.04(f), the CBS Group
shall retain responsibility for and continue to pay all expenses and benefits
relating to the Viacom Welfare Plans with respect to claims incurred before,
from and after the Separation Date by the CBS Employees and the Former CBS
Employees, as well as their respective covered dependents.  Notwithstanding the preceding sentence, New
Viacom shall reimburse CBS for 50% of the employer portion of the cost of providing
benefits under the Viacom Welfare Plans to individuals described in clause
(iii) of the definition of “Former CBS Employee”, as well as their respective
covered dependents, according to procedures mutually agreed to by CBS and New
Viacom.

 

(ii)           Prior to the Separation Date, CBS will notify New Viacom
of the amount that it shall have determined, based on historical experience, to
be sufficient to fund anticipated benefit payments under the Viacom Welfare
Plans to New Viacom Employees and the Former New Viacom Employees and their
covered dependants with respect to claims incurred by them before the
Separation Date (the “Pre-Separation Claims Expenses”).  New Viacom shall transfer to CBS, in cash,
the amount determined in accordance with the preceding sentence in six equal

 

69

 

installments
(the “Prefunding Payments”), to be paid on the first and fifteenth of
each of the first three months following the Separation Date.  On or about the 20th day of each month
beginning with the second month following the Separation Date and ending with
the fourth month following the Separation Date, CBS shall provide New Viacom
with a “true-up” calculation based on the actual claims experience through the
end of the prior month and a copy of any invoice or report received by CBS
pertaining to such claims.  To the extent
that such calculation shows that claims actually paid exceeded the Prefunding
Payments for the prior month, New Viacom shall promptly transfer to CBS an
amount in cash by which such claims payments exceed the Prefunding Payments; to
the extent that such calculation shows that claims actually paid were less than
the Prefunding Payments for the prior month, CBS shall promptly transfer to New
Viacom an amount in cash by which the Prefunding Payments for the prior month
exceeded the amount of such claims payments. 
Thereafter, on or about the 20th day of each month beginning with the
fifth month following the Separation Date and ending at such time as defined by
the claim filing deadlines of the Viacom Welfare Plans and other applicable
welfare plan payment regulations, CBS shall invoice New Viacom for the amount
of additional Pre-Separation Claims Expenses it has paid during the preceding
month, and New Viacom shall promptly pay such invoice.  

 

(b)           New Viacom Welfare Plans.  On or prior to and with effect as of the
Separation Date, New Viacom shall establish and adopt health and welfare plans,
the terms of which are substantially comparable, in the aggregate, to the terms
of the Viacom Welfare Plans as in effect immediately prior to the Separation
Date (collectively, the “New Viacom Welfare Plans”), for the benefit of
the New Viacom Employees and the Former New Viacom Employees.  New Viacom shall be responsible for and pay
expenses and benefits relating to all New Viacom Welfare Plan claims incurred
on and after the Separation Date by the New Viacom Employees and the Former New
Viacom Employees and their covered dependents. 
Notwithstanding the preceding sentence, CBS shall reimburse New Viacom
for 50% of the employer portion of the cost of providing benefits under the New
Viacom Welfare Plans to individuals described in clause (iii) of the
definition of “Former New Viacom Employee”, as well as their respective covered
dependents, according to procedures mutually agreed to by CBS and New
Viacom.  Without limiting the generality
of the preceding provisions of this Section 6.04(b), with respect to any New
Viacom Employee or Former New Viacom Employee who is entitled to receive
post-retirement health benefits or post-retirement life insurance benefits
under the Viacom Welfare Plans as of the Separation Date, New Viacom agrees to
establish effective as of the Separation Date plans that provide substantially
the same post-retirement health and post-retirement life insurance benefits
immediately after the Separation Date as provided under the Viacom Welfare
Plans immediately prior to the Separation Date.

 

(c)           Date Claims Are Incurred.  For purposes of this Section 6.04, a
claim or Liability (i) for medical, dental, vision and/or prescription
drug benefits shall be deemed to be incurred upon the rendering of health
services giving rise to the obligation to pay such benefits; (ii) for life
insurance and accidental death and dismemberment and business travel accident
insurance benefits and workers’ compensation benefits shall be deemed to be
incurred upon the occurrence of the event giving rise to the entitlement to
such benefits; (iii) for salary continuation or other disability benefits
shall be deemed to be incurred upon the date on which the individual is
declared disabled under the terms of the applicable disability plan; and
(iv) for a period of

 

70

 

continuous hospitalization shall be
deemed to be incurred on the date of admission to the hospital.

 

(d)           Pre-Existing Conditions; Dollar
Limits.  With respect to any New
Viacom Welfare Plan, New Viacom (i) shall cause there to be waived any
pre-existing condition limitations and (ii) shall give effect, in determining
any deductible and maximum out-of-pocket limitations, to claims incurred by,
and amounts paid by, and amounts reimbursed to (in each case during the
calendar year in which the Separation Date occurs), New Viacom Employees and
Former New Viacom Employees under similar Viacom Welfare Plans for the benefit
of such employees immediately prior to the Separation Date.

 

(e)           Disability.  Any final determination made or settlements
entered into by Viacom with respect to claims incurred under the Viacom
Short-Term Disability Plan or the Viacom Long-Term Disability Plan by New
Viacom Employees or Former New Viacom Employees prior to the Separation Date
shall be final and binding.  CBS shall
transfer to New Viacom, effective immediately after the Separation Date, and
New Viacom shall assume responsibility for (i) administering all claims
incurred under the Viacom Short-Term Disability Plan or the Viacom Long-Term
Disability Plan by New Viacom Employees and Former New Viacom Employees on or
prior to the Separation Date that are administered by Viacom as of the
Separation Date and (ii) all Liabilities under the Viacom Short-Term Disability
Plan and the Viacom Long-Term Disability Plan to New Viacom Employees and
Former New Viacom Employees as of the Separation Date, in the same manner, and
using the same methods and procedures, as Viacom used in determining and paying
such claims.  Effective immediately after
the Separation Date, New Viacom shall have sole discretionary authority to make
any necessary determinations with respect to such claims, including, without
limitation, entering into settlements with respect to such claims, and shall be
solely responsible for any costs, Liabilities or related expenses of any nature
whatsoever related to such claims, payments or obligations.

 

(f)            COBRA and HIPAA Compliance.  CBS shall be responsible for administering
compliance with the health care continuation requirements of COBRA, the
certificate of creditable coverage requirements of HIPAA, and the corresponding
provisions of the Viacom Welfare Plans with respect to CBS Employees and Former
CBS Employees and their covered dependents who incur a COBRA qualifying event
or loss of coverage under the Viacom Welfare Plans at any time before, on or
after the Separation Date.  New Viacom
shall be responsible for administering compliance with the health care
continuation requirements of COBRA, the certificate of creditable coverage
requirements of HIPAA, and the corresponding provisions of the New Viacom
Welfare Plans and/or the Viacom Welfare Plans with respect to New Viacom
Employees and Former New Viacom Employees and their covered dependents who
incur a COBRA qualifying event or loss of coverage under the New Viacom Welfare
Plans and/or the Viacom Welfare Plans at any time before, on or after the Separation
Date.  Viacom and New Viacom agree that
the consummation of the transactions contemplated by the Merger Agreement and
the Separation Agreement shall not constitute a COBRA qualifying event for any
purpose of COBRA.

 

71

 

(g)           Severance Plans.

 

(i)            A New Viacom Employee shall not be deemed to
have terminated employment for purposes of determining eligibility for
severance benefits in connection with or in anticipation of the consummation of
the transactions contemplated by the Merger Agreement.  Except for any New Viacom Employees who are
also CBS Employees and any Unallocated Employees, active participation of New
Viacom Employees and Former New Viacom Employees in the severance plans
maintained by Viacom shall cease immediately as of the Separation Date.

 

(ii)           The CBS Group shall retain all Liabilities with respect to severance
payments made or to be made to CBS Employees and Former CBS Employees other
than Unallocated Employees.  The New
Viacom Group shall assume all Liabilities with respect to severance payments
made or to be made to all New Viacom Employees and Former New Viacom Employees
other than Unallocated Employees. 
Liability for severance payments made or to be made to any Unallocated
Employees will be shared equally by CBS and New Viacom.  CBS shall make all severance payments to the
Unallocated Employees who are Former CBS Employees and shall invoice New Viacom
for 50% of all such payments.  New Viacom
shall reimburse CBS for the amount reflected on each such invoice as soon as
reasonably practicable after the receipt thereof.  New Viacom shall make all severance payments
to the Unallocated Employees who are Former New Viacom Employees and shall
invoice CBS for 50% of all such payments. 
CBS shall reimburse New Viacom for the amount reflected on each such
invoice as soon as reasonably practicable after the receipt thereof.  Such invoices and reimbursements shall be
made pursuant to procedures mutually agreed to by CBS and New Viacom.  For purposes of this Section 6.04(g), the
term “severance payments” shall include any welfare benefit coverage and all
other severance-related benefits provided under severance plans and agreements.

 

(h)           Flexible Spending Plans.

 

(i)            On or prior to and with effect as of
the Separation Date, New Viacom shall establish and adopt health care
reimbursement and dependent care reimbursement programs (collectively, the “New
Viacom Flexible Benefit Plan”) for all New Viacom Employees.  Prior to the Separation Date, Viacom and New
Viacom shall take all actions necessary or appropriate so that, effective as of
the Separation Date, (A) the flexible spending account balances of the New
Viacom Employees (whether positive or negative) for the year in which the
Separation Date occurs and, if applicable, the preceding year (the “Transferred
Account Balances”) under the Viacom Flexible Benefit Plan shall be
transferred to the New Viacom Flexible Benefit Plan; (B) the election levels
and coverage levels of the New Viacom Employees shall apply under the New
Viacom Flexible Benefit Plan in the same manner as under the Viacom Flexible
Benefit Plan; and (C) the New Viacom Employees shall be reimbursed from the New
Viacom Flexible Benefit Plan for eligible healthcare and dependent care claims incurred
at any time which are submitted to the New Viacom Flexible Benefit Plan from
and after the Separation Date on the same basis and the same terms and
conditions as under the Viacom Flexible Benefit Plan.  As soon as practicable after the Separation Date,
CBS shall pay New Viacom in cash the net aggregate amount of the Transferred
Account Balances under the Viacom Flexible Benefit Plan, if such amount is
positive, and New Viacom shall pay

 

72

 

CBS in cash the net
aggregate amount of such Transferred Account Balances, if such amount is
negative.

 

(ii)           On or prior to and with effect as of
the Separation Date, New Viacom shall establish and adopt a transit and parking
reimbursement program (the “New Viacom Commuter Reimbursement Plan”) for
all New Viacom Employees.  The account
balance of New Viacom Employees for 2005 shall remain with the existing transit
and parking reimbursement program of Viacom (the “Viacom Commuter
Reimbursement Plan”), and New Viacom Employees shall be reimbursed from the
Viacom Commuter Reimbursement Plan for eligible claims for 2005 submitted on or
before March 31, 2006.  As soon as
practicable after April 1, 2006, CBS will arrange for the third-party
administrator of the Viacom Commuter Reimbursement Plan to perform a “true up”
calculation to identify any remaining positive account balances of New Viacom
Employees and shall take all actions necessary or appropriate so that such
positive account balances will be transferred to the New Viacom Commuter
Reimbursement Plan and will pay New Viacom in cash the aggregate amount of such
transferred account balances.  The
contribution elections made by New Viacom Employees prior to the Separation
Date with respect to 2006 under the Viacom Commuter Reimbursement Plan shall
carry over and apply under the New Viacom Commuter Reimbursement Plan.

 

(i)            Vendor Contracts.

 

(i)            Third-Party ASO Contracts, Group
Insurance Policies and HMOs.  Viacom
and New Viacom shall use commercially reasonable efforts to obligate the third
party administrator of each administrative-services-only contract with a
third-party administrator that relates to any of the Viacom Employee Benefit
Plans (an “ASO Contract”), each group insurance policy that relates to
any of the Viacom Employee Benefit Plans (“Group Insurance Policies”)
and each agreement with a Health Maintenance Organization that provides medical
services under the Viacom Employee Benefit Plans (“HMO Agreements”), in
each case, in existence as of the Separation Date that is applicable to the New
Viacom Employees and the Former New Viacom Employees, to enter into a separate
ASO Contract, Group Insurance Policy and HMO Agreement, as applicable, with New
Viacom providing for substantially similar terms and conditions as are
contained in the ASO Contracts, Group Insurance Policies and HMO Agreements, as
applicable, to which Viacom is a party. 
Such terms and conditions shall include the financial and termination
provisions, performance standards, methodology, auditing policies, quality
measures and reporting requirements.

 

(ii)           Effect of Change in Rates.  Viacom and New Viacom shall use commercially
reasonable efforts to cause each of the insurance companies and third-party
administrators providing services and benefits under the Viacom Employee
Benefit Plans and the New Viacom Employee Benefit Plans to maintain the premium
and/or administrative rates based on the aggregate number of participants in
both the Viacom Employee Benefit Plans and the New Viacom Employee Benefit Plans
as of the date immediately prior to the Separation Date through December 31,
2006.  To the extent they are not
successful in such efforts, Viacom and New Viacom shall each bear the revised

 

73

 

premium or administrative
rates attributable to the individuals covered by their respective Welfare
Plans.

 

(j)            Workers’ Compensation Liabilities.

 

(i)            Except with regard to Unallocated Employees, the CBS
Group shall be responsible for all workers’ compensation Liabilities relating
to, arising out of or resulting from any claim by a CBS Employee or a Former
CBS Employee resulting from an accident or occupational disease, whether such
accident occurs, or such disease becomes manifest, prior to, on or following
the Separation Date.  Except with regard
to Unallocated Employees, the New Viacom Group shall be responsible for all
workers’ compensation Liabilities relating to, arising out of or resulting from
any claim by a New Viacom Employee or a Former New Viacom Employee resulting
from an accident or occupational disease, whether such accident occurs or such
disease becomes manifest, prior to, on or following the Separation Date.

 

(ii)           All workers’ compensation Liabilities relating to, arising
out of, or resulting from any claims by Unallocated Employees will be shared
equally by CBS and New Viacom.  CBS shall
make all required payments in respect of such claims by Unallocated Employees
who are Former CBS Employees and shall invoice New Viacom on a monthly basis
for 50% of all such payments made during the preceding month.  New Viacom shall reimburse CBS for the amount
reflected on each such invoice as soon as reasonably practicable after the
receipt thereof.  New Viacom shall make
all required payments in respect of such claims by Unallocated Employees who
are Former New Viacom Employees and shall invoice CBS on a monthly basis for
50% of all such payments made during the preceding month.  CBS shall reimburse New Viacom for the amount
reflected on each such invoice as soon as reasonably practicable after the
receipt thereof.  The CBS Group and the
New Viacom Group shall cooperate with respect to any notification to
appropriate governmental agencies of the Separation Date and the issuance of
new, or the transfer of existing, workers’ compensation insurance policies and
claims handling contracts.

 

(k)           Payroll Taxes and Reporting of
Compensation.  CBS and New Viacom
shall, and shall cause the other members of the CBS Group and the New Viacom
Group to, respectively, take such action as may be reasonably necessary or
appropriate in order to minimize Liabilities related to payroll Taxes after the
Separation Date.  CBS and New Viacom
shall, and shall cause the other members of the CBS Group and the New Viacom
Group to, respectively, each bear its responsibility for payroll Tax
obligations and for the proper reporting to the appropriate Governmental
Authorities of compensation earned by their respective employees after the
Separation Date, including, without limitation, compensation related to the
exercise of stock options and the vesting of restricted stock units.

 

Section 6.05           Employment
Agreements.  Following the Separation
Date, each employment agreement between Viacom or Viacom International Inc. and
a CBS Employee or Former CBS Employee shall be retained by the CBS Group.  Effective as of the Separation Date, Viacom
or Viacom International Inc., as applicable, shall assign to New Viacom, or the
applicable New Viacom Subsidiary, and New Viacom shall assume, or shall cause
to be assumed by the applicable New Viacom Subsidiary, each employment
agreement between Viacom or Viacom International Inc. and a New Viacom Employee
or Former New Viacom Employee.

 

74

 

Section 6.06           Non-U.S.
Benefit Plans.  The matters, issues,
and Liabilities relating to, arising out of, or resulting from any Viacom
Non-U.S. Benefit Plan and non-U.S.-related employment matters shall be handled
in a manner that is in compliance with the requirements of applicable Law and,
to the extent practicable, that is consistent with the principles and
procedures set forth in this Agreement for comparable matters, issues, or
Liabilities relating to, arising out of, or resulting from any U.S. Viacom
Employee Benefit Plan and U.S.-related employment matters.  Without in any way limiting the general
principle set forth in the preceding sentence, effective as of the Separation
Date, New Viacom Employees and Former New Viacom Employees who participate in
any Viacom Non-U.S. Benefit Plan, shall transition to the benefit plans and
programs of the non-U.S. Subsidiaries of New Viacom.  CBS and New Viacom shall work together to
determine the actions necessary or appropriate to implement the principles set
forth in this Section 6.06.

 

Section 6.07           Equity-Based
Plans.

 

(a)           Outstanding Awards.  The Merger Agreement shall govern the
treatment of equity-based awards outstanding under the Viacom Equity
Compensation Plans as of the Separation Date.

 

(b)           New Viacom Long-Term Management
Incentive Plan.  Prior to the
Separation Date, Viacom shall cause New Viacom to establish and adopt an equity
compensation plan (the “New Viacom Long-Term Management Incentive Plan”).  Effective as of the Separation Date, New
Viacom shall have adopted the New Viacom Long-Term Management Incentive Plan,
which shall permit the issuance of long-term incentive awards that have
material terms and conditions substantially similar to those long-term
incentive awards issued under the relevant Viacom Equity Plans that are to be substituted
with New Viacom long-term incentive awards in connection with the
Separation.  Viacom, as New Viacom’s sole
shareholder, shall approve the New Viacom Long-Term Management Incentive Plan
prior to the Separation.  All Liabilities
under the New Viacom Equity Compensation Plan shall be the responsibility of
New Viacom.

 

Section 6.08           Employee
Benefit Plan Participation.

 

(a)           Viacom Plans.  Except as specifically provided herein and
except for any New Viacom Employees who are also CBS Employees, all New Viacom
Employees and Former New Viacom Employees shall cease participation in all
Viacom Employee Benefit Plans, and each member of the New Viacom Group shall
cease to be a participating company in any Viacom Employee Benefit Plan, as of
the Separation Date.

 

(b)           New Viacom Plans.  (i) With respect to any New Viacom Employee
Benefit Plan, except as provided in Section 6.01(d), the New Viacom Group shall
cause to be recognized (to the extent applicable) each New Viacom Employee’s
and Former New Viacom Employee’s (A) past service with Viacom and its
Subsidiaries prior to the Separation Date to the extent recognized under
similar plans maintained by Viacom and its Subsidiaries immediately prior to
the Separation Date and (B) accrued but unused vacation time and sick days, and
(ii) any New Viacom Employee or Former New Viacom Employee who participated in
a Viacom Employee Benefit Plan immediately prior to the Separation Date shall
be entitled to immediate participation in a similar New Viacom Employee Benefit
Plan.

 

75

 

(c)                                  Right
to Amend or Terminate. 
Except as specifically provided herein, nothing in this Agreement shall
be construed or interpreted to restrict the CBS Group’s or the New Viacom Group’s
right or authority to amend or terminate any of their respective Employee
Benefit Plans following the Separation Date.

 

Section 6.09                                Fees, Rebates and
Performance Guarantees.  Prior to the
Separation Date, CBS will provide New Viacom with an estimate of fees expected
to be incurred with respect to the Viacom Employee Benefit Plans for periods
before the Separation Date that will not be billed until after the Separation
Date.  CBS will also provide New Viacom
with an estimate of rebates and performance guarantees with respect to the Viacom
Employee Benefit Plans that it expects to receive after the Separation Date for
periods before the Separation Date. 
Following the Separation Date, as CBS receives bills for the
aforementioned fees, it will pay them and invoice New Viacom for its share of
such fees, based on the same methodology used by the relevant vendor to
determine the fee (e.g., based on headcount), and will provide New Viacom with
a copy of any bill, invoice or report that it received pertaining to such
fees.  New Viacom will reimburse CBS for
the amount reflected on the invoice as soon as reasonably practicable after the
receipt thereof.  Following the
Separation Date, as CBS receives rebates or performance guarantees referred to
above, it will promptly pay over to New Viacom its share of such rebates or
performance guarantees, based on the same methodology used by the relevant
vendor to determine the rebate or performance guarantee (e.g., based on
headcount or claims volume), and will provide New Viacom with a copy of any
statement or report that it received pertaining to such rebates or performance
guarantees.

 

Section 6.10                                General and
Administrative.

 

(a)                                  Sharing
of Participant Information. 
CBS and New Viacom shall share, and CBS shall cause each other member of
the CBS Group to share, and New Viacom shall cause each other member of the New
Viacom Group to share with each other and their respective agents and vendors
(without obtaining releases), all participant information necessary for the
efficient and accurate administration of each of the Viacom Employee Benefit
Plans and the New Viacom Employee Benefit Plans.  CBS and New Viacom and their respective
authorized agents shall, subject to applicable laws, be given reasonable and
timely access to, and may make copies of, all information relating to the
subjects of this Agreement in the custody of the other party, to the extent
necessary for such administration.  Until
the Separation Date, all participant information shall be provided in the
manner and medium applicable to participating companies in Viacom Employee Benefit
Plans generally, and thereafter, all participant information shall be provided
in a manner and medium as may be mutually agreed to by CBS and New Viacom.

 

(b)                                 Reasonable
Efforts/Cooperation. 
Each of Viacom and New Viacom will use its commercially reasonable
efforts to promptly take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement,
including, without limitation, amending existing plan documents and adopting
new plan documents.  Each of Viacom and
New Viacom shall cooperate fully on any issue relating to the transactions
contemplated by this Agreement for which the other party seeks a determination
letter or private

 

76

 

letter
ruling from the IRS, an advisory opinion from the Department of Labor or any
other filing, consent or approval with respect to or by a Governmental
Authority.

 

(c)                                  Employee
Records.  Each of Viacom and
New Viacom will use its commercially reasonable efforts to promptly take, or
cause to be taken, all actions necessary to facilitate the transfer of (i) employee
Records of New Viacom Employees and Former New Viacom Employees to New Viacom
and (ii) employee Records of CBS Employees and Former CBS Employees to
CBS, in accordance with the transactions contemplated by this Agreement.

 

(d)                                 Section 162(m).  Notwithstanding anything in this Agreement to
the contrary (including, without limitation, the treatment of outstanding
long-term incentive awards and annual incentive awards as described herein),
Viacom and New Viacom agree to negotiate in good faith regarding any
alternative treatment of any outstanding long-term incentive award, annual
incentive award or other compensation to which any New Viacom Employee who is a
“covered employee” of New Viacom (within the meaning of Section 162(m) of
the Code) may be entitled to ensure that the payment of such long-term
incentive award, annual incentive award or other compensation is deductible by
the party responsible for the payment thereof or otherwise entitled to the
deduction related thereto.

 

Section 6.11                                Viacom Plus.  From and after the Separation Date, the
employees of Viacom Plus shall be employees of New Viacom.  New Viacom will consult with CBS as to all
decisions relating to hiring, termination, compensation and benefits of Viacom
Plus employees, and CBS shall reimburse New Viacom for 50% of the cost of
compensation and benefits of the Viacom Plus employees according to procedures
agreed to by CBS and New Viacom; provided, however, that any
disagreements that cannot be resolved between CBS and New Viacom shall be
presented to the Office of the Chairman for resolution; provided, further,
that CBS and New Viacom shall independently determine the amount of any
incentive compensation (whether cash or, in the case of New Viacom, equity) to
be paid to any Viacom Plus employee for services performed on its behalf.  New Viacom shall be solely responsible for
the payment of all such incentive compensation, and CBS shall reimburse New
Viacom for the amount thereof that it pays to a Viacom Plus employee at the
direction of CBS.  Either CBS or New
Viacom may terminate the arrangements provided for in this Section 6.11 on
six months’ advance written notice to the other party.

 

ARTICLE VII

 

INTELLECTUAL PROPERTY MATTERS

 

Section 7.01                                Intellectual
Property Matters.  Without limiting
the obligations under Section 11.01, from and after the Separation Date,
the parties hereto agree to execute and deliver any documents and perform any
actions (including, without limitation, filings with Internet domain
registries, the U.S. Patent and Trademark Office, the U.S. Copyright Office and
similar foreign offices) reasonably necessary or desirable to evidence,
confirm, effect, perfect and/or record each party’s ownership interest in
Assets that constitute Intellectual Property or Software.

 

77

 

ARTICLE VIII

 

LEGAL MATTERS

 

Section 8.01                                Control of Legal
Matters.

 

(a)                                  On or
prior to the Separation Date, New Viacom shall assume (or, as applicable,
retain) control of each of the New Viacom Litigation Matters, and New Viacom
shall use its reasonable best efforts to have a member of the New Viacom Group
substituted for any member of the CBS Group named as a defendant in any such
New Viacom Litigation Matters; provided, however, that New Viacom
shall not be required to make any such effort if the removal of any member of
the CBS Group would jeopardize insurance coverage or rights to indemnification
from third parties applicable to such New Viacom Litigation Matters.

 

(b)                                 On or
prior to the Separation Date, CBS shall assume (or, as applicable, retain)
control of each of the CBS Litigation Matters, and CBS shall use its reasonable
best efforts to have a member of the CBS Group substituted for any member of
the New Viacom Group named as a defendant in any such CBS Litigation Matters; provided,
however, that CBS shall not be required to make any such effort if the
removal of any member of the New Viacom Group would jeopardize insurance
coverage or rights to indemnification from third parties applicable to such CBS
Litigation Matters.

 

(c)                                  Except
as provided in paragraphs (a) and (b) of this Section 8.01,
after the Separation Date, the parties hereto agree that with respect to all
demands, claims or Actions commenced against any member of the New Viacom
Group, any member of the CBS Group or members of both Groups relating to events
that take place before, on or after the Separation Date, such demands, claims
or Actions shall be controlled by:

 

(i)                                     New Viacom, if such claim, demand or Action
relates solely to the New Viacom Assets, New Viacom Liabilities or New Viacom
Business (as the New Viacom Business is conducted after the Separation Date),
including, without limitation, claims, demands or Actions brought by or on
behalf of any individual described in clause (i) of the definition of
“Former New Viacom Employee” (a “Future New Viacom Litigation Matter”),
and New Viacom shall use its reasonable best efforts to have a member of the
New Viacom Group substituted for any member of the CBS Group which may be named
as a defendant in such Future New Viacom Litigation Matter; provided, however,
that New Viacom shall not be required to make any such effort if the removal of
any member of the CBS Group would jeopardize insurance coverage or rights to
indemnification from third parties applicable to such Future New Viacom
Litigation Matter;

 

(ii)                                  CBS, if such claim, demand or Action relates
solely to the CBS Assets, CBS Liabilities or CBS Business (as the CBS Business
is conducted after the Separation Date), including, without limitation, claims,
demands or Actions brought by or on behalf of any individual described in
clause (i) of the definition of “Former CBS Employee” (a “Future
CBS Litigation Matter”), and CBS shall use its reasonable best efforts to
have a member of the CBS Group substituted for any member of the New Viacom
Group which may be named as a defendant in such Future CBS Litigation Matter; provided,
however, 

 

78

 

that
CBS shall not be required to make any such effort if the removal of any member
of the New Viacom Group would jeopardize insurance coverage or rights to
indemnification from third parties applicable to such Future CBS Litigation
Matter; and

 

(iii)                               Except as provided in subparagraphs (i) or
(ii) above, or as may be otherwise agreed by CBS and New Viacom, CBS and
New Viacom jointly if (A) members of both Groups jointly operate or
operated at the relevant time the Business to which such claim, demand or
Action relates, (B) a claim, demand or Action arises from or relates to
the Registration Statement or any other document filed with any Governmental
Authority (including, without limitation, the SEC) at or prior to the
Separation Date by New Viacom or Viacom in connection with the Separation or
Merger, (C) a claim, demand or Action is brought by or on behalf of the
current or former stockholders of Viacom, New Viacom or CBS and relates to any
filing by Viacom with the SEC other than those described in clause (B), (D) a
claim, demand or Action is brought by any person against Viacom, CBS and/or New
Viacom with respect to the Separation, or (E) a claim, demand or Action is
brought by or on behalf of any individual described in clause (iii) of the
definition of “Former New Viacom Employee” or clause (iii) of the
definition of “Former CBS Employee” (the matters in clauses (A) through (E) being
“Future Joint Litigation Matters”); provided, however, that
no member of either Group may settle a Future Joint Litigation Matter without
the prior written consent of the members of the other Group named or involved
in such Future Joint Litigation Matter, which consent shall not be unreasonably
withheld or delayed; provided  further that either party may
settle a Future Joint Litigation matter if such settlement is for money only
and provides a full release from any liability under such Future Joint Litigation
Matter for the other party and, as applicable, the members of the other party’s
Group.

 

(d)                                 To the
extent the party named in an Action described in this Section 8.01 (the “Named
Party”) is not substituted for as described in paragraph (a), (b), (c)(i) or
(c)(ii) by a member of the Group which has assumed control of such Action
pursuant to this Section 8.01 (the “Responsible Party”), the
parties hereto agree to cooperate in defending against such Action and, subject
to Section 3.08, to provide each other with access to all Information
relating to such Action except to the extent providing such access and such
Information would prejudice an indemnification claim available to such parties
as contemplated in Section 9.06.

 

Section 8.02                                Claims Against Third
Parties.  Claims, demands and Actions
by Viacom or any of its Subsidiaries against third parties, and any proceeds or
other benefits that may be received as a result of such claims, demands or
Actions and any Liabilities arising out of or resulting from such claims,
demands or Actions, that are (a) listed on Schedule 8.02(a) or
that relate to the New Viacom Business and not to the CBS Business shall be the
property of New Viacom (“New Viacom Claims”), (b) listed on Schedule 8.02(b) or
that relate to the CBS Business and not to the New Viacom Business shall be the
property of CBS (“CBS Claims”), and (c) listed on Schedule 8.02(c) or
that relate to both the New Viacom Business and the CBS Business shall be the
property of, and shall be shared by, New Viacom and CBS in proportion to their
respective interests (“Joint New Viacom and CBS Claims”).

 

Section 8.03                                Retention of Counsel.  To the maximum extent permitted by the
applicable rules of professional conduct, the parties hereto agree that
attorneys who have worked

 

79

 

for Viacom and its
Subsidiaries prior to the Separation Date are not conflicted from representing
any members of the New Viacom Group or the CBS Group, except to the extent such
representation is adverse to a member of the other Group.  The parties hereto agree that (a) until
the second anniversary of the Separation Date, they and the members of their
respective Groups shall enforce the enterprise-wide conflict rule as in
effect at Viacom immediately prior to the Separation Date and shall notify
their outside counsel that such rule shall remain in effect as applied to
CBS, New Viacom and their respective Subsidiaries as of the Separation Date for
a two-year period and (b) the firms listed on Schedule 8.03 shall be
permitted to represent any members of the New Viacom Group and the CBS Group in
Actions involving members of the other Group as described therein.

 

Section 8.04                                Notice to Third
Parties; Service of Process; Cooperation.

 

(a)                                  Viacom
and New Viacom shall cause the members of the CBS Group and the members of the
New Viacom Group to promptly notify their respective agents for service of
process and all other necessary parties, including, without limitation,
plaintiffs and courts, of the Separation and shall provide instructions for
proper service of legal process and other documents.

 

(b)                                 New
Viacom and CBS shall, and shall cause the members of their respective Groups
to, use their reasonable best efforts to deliver to each other any legal process
or other documents incorrectly served upon them or their agents as soon as
possible following receipt.

 

Section 8.05                                Applicability.  This Article VIII shall not apply to Tax
Contests related to Income Taxes, Capital Taxes or Transfer Taxes to the extent
such Tax Contests are governed by the Tax Matters Agreement.

 

ARTICLE IX

INDEMNIFICATION

 

Section 9.01                                Indemnification by
New Viacom.  Following the Separation
Date and subject to Section 13.01, New Viacom shall, and shall cause the
New Viacom Subsidiaries to, indemnify, defend and hold harmless the Viacom
Employee Benefit Plans and each member of the CBS Group and its Affiliates
(other than any member of the New Viacom Group), and each of their respective
officers, directors, employees, agents, heirs, executors, successors and
assigns, including, without limitation, to the extent any such Person or any
member of the CBS Group is a Named Party (each, a “CBS Indemnified Party”),
from and against all losses, damages, Liabilities, claims, costs and expenses,
interest, awards, judgments and penalties (including, without limitation,
attorneys’ and consultants’ fees and expenses incurred in connection with
disputes with third parties, but not fees and expenses incurred in connection
with disputes between any member of the CBS Group and any member of the New
Viacom

 

80

 

Group) actually suffered
or incurred by them (hereinafter, a “Loss”) arising out of or resulting
from:

 

(a)                                  any New Viacom Liability (other than any Insured
CBS Liability), including, without limitation, arising out of the failure of
any member of the New Viacom Group or any other Person to pay, perform or
otherwise promptly discharge any such New Viacom Liability;

 

(b)                                 the New Viacom Business, the New Viacom
Employee Benefit Plans and any New Viacom Asset;

 

(c)                                  any breach by any member of the New Viacom
Group of any of the Mixed Contracts, subject to any indemnification provision
or any specific limitation on liability contained in any Ancillary Agreement;
and

 

(d)                                 any breach by New Viacom, any member of the
New Viacom Group or a New Viacom Employee Benefit Plan of this Agreement or any
of the Ancillary Agreements, subject to any indemnification provision or any
specific limitation on liability contained in any Ancillary Agreement.

 

Section 9.02                                Indemnification by
CBS.  Following the Separation Date
and subject to Section 13.01, CBS shall, and shall cause the CBS
Subsidiaries to, indemnify, defend and hold harmless the New Viacom Employee
Benefit Plans and each member of the New Viacom Group and its Affiliates (other
than any member of the CBS Group), and each of their respective officers,
directors, employees, agents, heirs, executors, successors and assigns,
including, without limitation, to the extent any such Person or any member of
the New Viacom Group is a Named Party (each, a “New Viacom Indemnified Party”),
from and against all Losses arising out of or resulting from:

 

(a)                                  any CBS Liability (other than any Insured New
Viacom Liability), including, without limitation, arising out of the failure of
any member of the CBS Group or any other Person to pay, perform or otherwise
promptly discharge any such CBS Liability;

 

(b)                                 the CBS Business, the Viacom Employee Benefit
Plans and any CBS Asset;

 

(c)                                  any breach by any member of the CBS Group of
any of the Mixed Contracts, subject to any indemnification provision or any
specific limitation on liability contained in any Ancillary Agreement; and

 

(d)                                 any breach by CBS, any member of the CBS
Group or a Viacom Employee Benefit Plan of this Agreement or any of the
Ancillary Agreements, subject to any indemnification provision or any specific
limitation on liability contained in any Ancillary Agreement.

 

81

 

Section 9.03                                Adjustments to
Indemnification Obligations.

 

(a)                                  The
parties intend that any Liability subject to indemnification, contribution or
reimbursement pursuant to this Article IX or Article V will be net of
any recovery, judgment, settlement, Insurance Proceeds or other amounts that
actually reduce the amount of the Liability. 
Accordingly, the amount that any party (an “Indemnifying Party”) is
required to pay to any Person entitled to indemnification hereunder (an “Indemnified Party”)
will be reduced by any recovery, judgment, settlement, Insurance Proceeds or
other amounts theretofore actually recovered by or on behalf of the Indemnified
Party in respect of the related Liability; provided, however,
that any amounts described in Section 9.01 or Section 9.02 which are
incurred by an Indemnified Party shall be paid or, in the case of amounts which
may be insured, advanced, promptly by the Indemnifying Party and shall not be
delayed pending any determination as to the availability of Insurance Proceeds.  If an Indemnified Party receives a
payment required to be made under this Article IX (an “Indemnity Payment”)
from an Indemnifying Party in respect of any Liability and subsequently
receives any recovery, judgment, settlement, Insurance Proceeds or other
amounts, then the Indemnified Party will pay to the Indemnifying Party an
amount equal to the excess of the recovery, judgment, settlement, Insurance
Proceeds or other amounts received over the amount that would have been due if
the recovery, judgment, settlement, Insurance Proceeds or other amounts had
been received, realized or recovered before the Indemnity Payment was made.

 

(b)                                 An
insurer who would otherwise be obligated to pay any claim shall not be relieved
of the responsibility with respect thereto or, solely by virtue of the
indemnification provisions hereof, have any subrogation rights with respect
thereto, it being expressly understood and agreed that no insurer or any other
third party shall be entitled to a “windfall” (i.e., a benefit it would not be
entitled to receive in the absence of the indemnification provisions hereof) by
virtue of the indemnification provisions hereof.

 

(c)                                  The
amount of any payment required to be paid under this Agreement between CBS or
any CBS Subsidiary, on the one hand, and New Viacom or any New Viacom
Subsidiary, on the other hand, in respect of a Pre-Separation Liability
accruing for federal Income Tax purposes after the Separation Date (a “Payment”),
shall be reduced to take into account any net Income Tax benefit of the payee
arising from incurring or satisfying the Pre-Separation Liability giving rise
to the payment obligation.  The preceding
sentence shall be implemented by reducing the Payment at the time such Payment
is due to reflect the amount of such net Income Tax benefit, assuming for this
purpose that any such net Income Tax benefit would be fully and immediately
utilizable, unless such benefit is reflected in tax basis or similar item (“Tax
Basis”), in which case, assuming such Tax Basis would be fully and
immediately utilizable over the depreciation or amortization period, if
applicable, computed on a present value basis using 60% of the Adjusted Swap
Rate.  If such Tax Basis not depreciable
or amortizable, then the payee shall promptly refund to the payor the portion
of such Payment or Payments equal to the net Income Tax benefits arising from
such Tax Basis at the time such benefits are actually realized.

 

Section 9.04                                Contribution.  If the indemnification provided for in this Article IX
is unavailable to, or insufficient to hold harmless, an Indemnified Party in
respect of any Losses for which indemnification is provided for herein, then
each Indemnifying Party shall contribute

 

82

 

to the Losses for which
such indemnification is unavailable or insufficient in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party in connection with the circumstances which resulted in Losses
as well as any other relevant equitable considerations.

 

Section 9.05                                Characterization of
Payments.  For all Income Tax
purposes (unless required by a change in applicable Tax Law or good faith
resolution of a Tax Contest), (i) the parties hereto shall treat, and
shall cause the members of their Group to treat, (a) any payment
obligation arising, and any payment made, under this Agreement, after the
Separation Date with respect to Pre-Separation Liabilities as arising or
occurring immediately before the Merger and (b) the portion of any payment
owed or paid by one party to another party that is attributable to
Post-Separation Date Interest shall be treated as interest and not as arising
or being paid immediately before the Merger and (ii) no member of either
the New Viacom Group or the CBS Group shall take any position inconsistent with
this Section 9.05 in connection with any matter relating to Income Taxes
or Income Tax Returns.

 

Section 9.06                                Notice of Loss;
Third Party Claims.

 

(a)                                  An
Indemnified Party shall give the Indemnifying Party notice of any matter that
an Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement (other than a Third Party Claim), within
60 days of such determination, stating the amount of the Loss claimed, if known,
and method of computation thereof, and containing a reference to the provisions
of this Agreement in respect of which such right of indemnification is claimed
by such Indemnified Party or arises; provided, however, that the
failure to provide such notice shall not release the Indemnifying Party from
any of its obligations under this Article IX except to the extent that
such failure results in a detriment to the Indemnifying Party and shall not
relieve the Indemnifying Party from any other Liability that it may have to any
Indemnified Party other than under this Article IX.

 

(b)                                 If an
Indemnified Party shall receive notice of any claim, demand, Action, audit or
assessment (each, a “Third Party Claim”) against it that may give rise
to a claim for Loss under this Article IX, within 30 days of the receipt
of such notice, the Indemnified Party shall give the Indemnifying Party notice
of such Third Party Claim; provided, however, that the failure to
provide such notice shall not release the Indemnifying Party from any of its
obligations under this Article IX except to the extent that such failure
results in a detriment to the Indemnifying Party and shall not relieve the
Indemnifying Party from any other Liability that it may have to any Indemnified
Party other than under this Article IX. 
Subject to Section 8.01(c), the Indemnifying Party shall be
entitled (but shall not be required) to assume and control the defense of such
Third Party Claim at its expense and through counsel of its choice that is
reasonably acceptable to the Indemnified Party if it gives notice of its
intention to do so to the Indemnified Party within 15 days of the receipt of
such notice from the Indemnified Party. 
In the event of a conflict of interest between the Indemnifying Party
and the Indemnified Party, the Indemnified Party shall be entitled to retain,
at the Indemnifying Party’s expense, separate counsel as required by the
applicable rules of professional conduct with respect to such matter.  If the Indemnifying Party elects to undertake
any such defense against a Third Party Claim, the Indemnified Party may
participate in such defense at its own expense and, in any event, shall
cooperate with the Indemnifying Party in such defense and make available to the
Indemnifying Party, at the

 

83

 

Indemnifying
Party’s expense, all witnesses, pertinent records, materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as are reasonably required by the Indemnifying Party.  Similarly, if the Indemnified Party is
conducting the defense against any such Third Party Claim, the Indemnifying
Party shall cooperate with the Indemnified Party in such defense and make
available to the Indemnified Party, at the Indemnified Party’s expense, all
witnesses, pertinent records, materials and information in the Indemnifying
Party’s possession or under the Indemnifying Party’s control relating thereto
as are reasonably required by the Indemnified Party.  If the Indemnifying Party elects to direct
the defense of any Third Party Claim, the Indemnified Party shall not pay, or
permit to be paid, any part of such Third Party Claim unless the Indemnifying
Party consents in writing to such payment, which consent shall not be
unreasonably withheld or delayed, unless the Indemnifying Party withdraws from
the defense of such Third Party Claim or unless a final judgment from which no
appeal may be taken by or on behalf of the Indemnifying Party is entered
against the Indemnified Party for such Third Party Claim.  If the Indemnified Party assumes the defense
of any such claims or proceedings pursuant to this Section 9.06 and
proposes to settle such claims or proceedings prior to a final judgment thereon
or to forgo any appeal with respect thereto, then the Indemnified Party shall
give the Indemnifying Party prompt written notice thereof and the Indemnifying
Party shall have the right to participate in the settlement or assume or
reassume the defense of such claims or proceeding.  Without the consent of the Indemnified Party,
the Indemnifying Party shall have the right to settle any Third Party Claim for
which it obtains a full release of the Indemnified Party in respect of such
Third Party Claim but only to the extent such settlement does not require or
grant any injunctive or other relief that impacts the Business of the
Indemnified Party in any way or contains any admission of liability.

 

Section 9.07                                Remedies.  The parties hereto acknowledge and agree that
(a) following the Separation, the indemnification provisions of Sections
9.01 and 9.02 and the dispute resolution provisions of Article X shall be
the sole and exclusive remedies of the parties hereto for any failure by the
other party to perform and comply with any covenants and agreements in this
Agreement and (b) notwithstanding anything herein to the contrary, no
breach of any covenant or agreement contained herein shall give rise to any
right on the part of CBS or New Viacom or any member of its respective Group,
after the consummation of the Separation, to rescind this Agreement or any
Ancillary Agreement or any of the transactions contemplated hereby and
thereby.  Each party hereto shall take
all reasonable steps to mitigate its Losses upon and after becoming aware of
any event that could reasonably be expected to give rise to any Losses.

 

Section 9.08                                Tax Matters.  The rights and obligations of the parties
under this Article IX shall not apply with respect to indemnification for
any Loss related to, or arising from, Income Taxes, Capital Taxes or Transfer
Taxes to the extent any such Loss is governed by the Tax Matters Agreement.

 

Section 9.09                                Additional Matters.

 

(a)                                  Any
claim on account of a Liability not contemplated by Section 9.06(a) or
that does not result from a Third Party Claim shall be asserted by written
notice given by the Indemnified Party to the Indemnifying Party.  Such Indemnifying Party shall have a period
of 60 days after the receipt of such notice within which to respond
thereto.  If such Indemnifying Party

 

84

 

does
not respond within such 60-day period, such Indemnifying Party shall be deemed
to have refused to accept responsibility to make payment.  If such Indemnifying Party does not respond
within such 60-day period or rejects such claim in whole or in part, such
Indemnified Party shall be free to pursue such other remedies as may be
available to such Party.

 

(b)                                 In the
event of payment by or on behalf of any Indemnifying Party to any Indemnified
Party in connection with any Third Party Claim, such Indemnifying Party shall
be subrogated to and shall stand in the place of such Indemnified Party as to
any events or circumstances in respect of which such Indemnified Party may have
any right, defense or claim relating to such Third Party Claim against any
claimant or plaintiff asserting such Third Party Claim or against any other
Person.  Such Indemnified Party shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right,
defense or claim.

 

Section 9.10                                Survival of
Indemnities.  The rights and
obligations of each of CBS and New Viacom and their respective Indemnified
Parties under this Article IX shall survive the distribution, sale or
other transfer by any party of any Assets or the assignment by it of any
Liabilities.

 

ARTICLE X

DISPUTE RESOLUTION

 

Section 10.01                          Disputes.  Except as otherwise specifically provided in
any Ancillary Agreement (the terms of which, to the extent so provided therein,
shall govern the resolution of disputes, controversies or claims that are the
subject of that Ancillary Agreement), the procedures for discussion,
negotiation and arbitration set forth in this Article X shall apply to all
disputes, controversies or claims (whether arising in contract, tort or
otherwise) that may arise out of or relate to, or arise under or in connection
with, this Agreement or any Ancillary Agreement, or the transactions
contemplated hereby or thereby (including, without limitation, all actions
taken in furtherance of the transactions contemplated hereby or thereby on or
prior to the Separation Date), or the commercial or economic relationship of
the parties relating hereto or thereto, between or among any member of the CBS
Group and the New Viacom Group (collectively, “Agreement Disputes”).

 

Section 10.02                          Dispute Resolution.

 

(a)                                  CBS
and New Viacom will use commercially reasonable efforts to resolve
expeditiously any Agreement Dispute on a mutually acceptable negotiated
basis.  In furtherance of the foregoing,
any member of the New Viacom Group or the CBS Group involved in an Agreement
Dispute may deliver a notice (an “Escalation
Notice”) demanding an in-person meeting involving senior level
management representatives of CBS and New Viacom (or, if CBS and New Viacom
agree, of the appropriate strategic business unit or division within each such
entity).  A copy of any such Escalation
Notice shall be given to the General Counsel of CBS and of New Viacom (which
copy shall state that it is an Escalation Notice pursuant to this Section 10.02).  Any agenda, location or procedures for such
discussions or negotiations between CBS and New Viacom may be established by
CBS and New Viacom from time to time; provided,

 

85

 

however, that the representatives of
CBS and New Viacom shall use their reasonable efforts to meet within 30 days of
the Escalation Notice (or such shorter time as is necessary to avoid immediate
irreparable injury).

 

(b)                                 If the
senior level management representatives of CBS and New Viacom are not able to
resolve the Agreement Dispute within 30 days after the date of the Escalation
Notice (or such shorter time as is necessary to avoid immediate irreparable
injury), then the Agreement Dispute shall be submitted to a committee
consisting of one independent director of CBS and one independent director of
New Viacom.

 

(c)                                  If CBS
and New Viacom are not able to resolve the Agreement Dispute through the
processes set forth in subsections (a) and (b) of this Section 10.02
within 60 days after the date of the Escalation Notice (or such shorter time as
is necessary to avoid immediate irreparable injury), such Agreement Dispute
shall be determined, at the request of either CBS or New Viacom by arbitration,
which shall be conducted (i) by three arbitrators, consisting of one
arbitrator appointed by CBS, one arbitrator appointed by New Viacom and a third
arbitrator appointed by the two arbitrators appointed by CBS and New Viacom or,
if the arbitrators appointed by CBS and New Viacom cannot agree on a third
arbitrator, the third arbitrator shall be appointed by a committee consisting
of two directors who are directors of both CBS and New Viacom, and (ii) in
accordance with the Commercial Rules of the American Arbitration
Association (except with respect to the selection of arbitrators) in effect at
the time of filing of the demand for arbitration.  Any request for arbitration pursuant to this
paragraph (b) may be made only after the party requesting arbitration
obtains the prior approval of its board of directors to make such request.

 

(d)                                 The
decision of the arbitrators shall be final and binding upon the parties hereto,
and the expense of the arbitration (including, without limitation, the award of
attorneys’ fees to the prevailing party) shall be paid as the arbitrators
determine.  The decision of the
arbitrators shall be executory, and judgment thereon may be entered by any
court of competent jurisdiction.  The
seat of the arbitration shall be New York, New York.

 

(e)                                  The
existence of, and any discussions, negotiations, arbitrations or other
proceedings relating to, any Agreement Dispute shall be considered by each
party hereto as Confidential Information until such time as a judgment thereon
is entered in a court of competent jurisdiction.

 

(f)                                    Notwithstanding
anything contained in this Agreement to the contrary, no member of the New
Viacom Group and no member of the CBS Group shall have the right to institute
judicial proceedings against the other party or any Person acting by, through
or under such other party, in order to enforce the instituting party’s rights
hereunder, except that any such member shall be permitted to seek an injunction
in aid of arbitration with respect to an Agreement Dispute to preserve the
status quo during the pendency of any arbitration proceeding pursuant to
paragraph (b) of this Section 10.02.  All judicial proceedings arising out of or
relating to this Agreement shall be heard and determined exclusively in any New
York state or federal court sitting in the Borough of Manhattan in The City of
New York.

 

86

 

Section 10.03                          Continuity of Service and
Performance.  Unless otherwise agreed
in writing, the parties will continue to provide service and honor all other
commitments under this Agreement and each Ancillary Agreement during the course
of dispute resolution pursuant to the provisions of this Article X with
respect to all matters not subject to such Agreement Dispute.

 

ARTICLE XI

FURTHER ASSURANCES

 

Section 11.01                          Further Assurances.

 

(a)                                  The
parties hereto shall use all reasonable efforts to take, or cause to be taken,
all appropriate action, to do or cause to be done all things necessary, proper
or advisable under applicable Law, and to execute and deliver such documents
and other papers, as may be required to carry out the provisions of this
Agreement and any Ancillary Agreement and to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements,
whether before or after the Separation Date.

 

(b)                                 Without
limiting the foregoing, prior to, on and after the Separation Date, each party
hereto shall cooperate with the other party, and without any further consideration,
but at the expense of the requesting party, to execute and deliver, or use its
reasonable efforts to cause to be executed and delivered, all instruments,
including, without limitation, instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all Consents and
Governmental Approvals, including, without limitation, under any permit,
license, agreement, indenture or other instrument, and to take all such other
actions as such party may reasonably be requested to take by any other party
hereto from time to time, consistent with the terms of this Agreement and the
Ancillary Agreements, in order to effectuate the provisions and purposes of
this Agreement and the Ancillary Agreements and the transfers of the New Viacom
Assets and the CBS Assets and the assignment and assumption of the New Viacom
Liabilities and the CBS Liabilities and the other transactions contemplated
hereby and thereby.

 

(c)                                  To the
extent any provision in this Agreement or in any Ancillary Agreement requires
CBS or New Viacom to cause the CBS Subsidiaries or the New Viacom Subsidiaries,
as applicable, to take any action or not to take any action, such provision
shall only be applicable with respect to the CBS Subsidiaries that are
controlled by CBS and the New Viacom Subsidiaries that are controlled by New
Viacom, in each case directly or indirectly through one or more intermediaries.

 

ARTICLE XII

TERMINATION

 

Section 12.01                          Termination.  This Agreement may only be terminated by the
written agreement of the parties hereto.

 

87

 

Section 12.02                          Effect of Termination.  In the event of termination of this Agreement
in accordance with Section 12.01, this Agreement shall forthwith become
void and there shall be no Liability on the part of either party hereto.

 

Section 12.03                          Amendment.  This Agreement may not be amended or modified
except (a) by an instrument in writing signed by, or on behalf of, the
parties hereto or (b) by a waiver in accordance with Section 12.04.

 

Section 12.04                          Waiver.  Either party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other party and (b) waive compliance with any of the agreements of the
other party or conditions to such party’s obligations contained herein.  Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party to be bound
thereby.  Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition of this Agreement.  The
failure of either party hereto to assert any of its rights hereunder shall not
constitute a waiver of any of such rights.

 

ARTICLE XIII

MISCELLANEOUS

 

Section 13.01                          Limitation of Liability.  IN NO EVENT SHALL ANY MEMBER OF THE CBS GROUP
OR THE NEW VIACOM GROUP BE LIABLE TO ANY MEMBER OF THE NEW VIACOM GROUP OR THE
CBS GROUP, RESPECTIVELY, FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL
OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE) ARISING IN ANY WAY OUT OF
THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING
LIMITATIONS SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS FOR
LIABILITIES TO THIRD PARTIES AS SET FORTH IN ARTICLE IX.

 

Section 13.02                          Expenses.  Notwithstanding anything in this Agreement or
in any Ancillary Agreement to the contrary, all One-Time Transaction Costs (as
defined in Schedule 13.02) up to an aggregate of $195 million (the “Aggregate
Threshold”) shall be borne by Viacom on or prior to the Separation Date and
by New Viacom following the Separation Date. In furtherance of the foregoing,
New Viacom shall reimburse CBS for any reasonably documented One-Time
Transaction Costs incurred by CBS until Viacom, with respect to the period on
or before the Separation Date, and New Viacom, with respect to the period
following the Separation Date, in the aggregate, shall have incurred One-Time
Transaction Costs up to the Aggregate Threshold.  Any One-Time Transaction Costs in excess of
the Aggregate Threshold shall be borne by CBS and New Viacom equally.  In furtherance of the immediately preceding
sentence, with respect to One-Time Transaction Costs incurred in excess of the
Aggregate Threshold, CBS and New Viacom shall promptly reimburse each other for
50% of any such reasonably documented One-Time Transaction Costs incurred by
the other party.

 

88

 

Section 13.03                          Counterparts.  This Agreement may be executed and delivered
(including by facsimile transmission) in counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.

 

Section 13.04                          Notices.  All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by an internationally recognized overnight courier service, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties hereto at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 13.04):

 

If to CBS, to:

 

CBS Corporation

51 West 52nd Street

New York, NY  10019

Facsimile No:  (212) 975-4215

 

Attn:  Louis J. Briskman

 

With a copy to:

 

Weil, Gotshal &
Manges LLP

767 Fifth Avenue

New York, NY  10153

Facsimile No:  (212) 310-8007

 

Attn:                    Howard Chatzinoff
Michael E. Lubowitz

 

If to New Viacom, to:

 

Viacom Inc.

1515 Broadway

New York, NY  10036

Facsimile No:  (212) 258-6099

 

Attn:  Michael D. Fricklas

 

With a copy to:

 

Shearman & Sterling LLP 

599 Lexington Avenue 

New York, New York  10022 

Facsimile No:  (212) 848-7179

 

89

 

Attn:                    Creighton O’M.
Condon

Christa A. D’Alimonte

 

Section 13.05                          Public Announcements.  Following the Separation, the parties hereto
shall be permitted to make, or cause to be made, any press release or public announcement
in respect of this Agreement or the transactions contemplated by this Agreement
or otherwise communicate with any news media unless otherwise prohibited by Law
or applicable stock exchange regulation or the provisions of this Agreement or
any Ancillary Agreement.

 

Section 13.06                          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 by this Agreement is not affected in
any manner materially adverse to either party hereto.  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 a mutually
acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the greatest extent possible.

 

Section 13.07                          Entire Agreement;
Assignment.  This Agreement and the
Ancillary Agreements constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between the parties hereto
with respect to the subject matter hereof and thereof.  This Agreement may not be assigned (whether
pursuant to a merger, by operation of Law or otherwise) by a party hereto
without the consent of the other party hereto, provided that no such assignment
shall relieve the assigning party of its obligations hereunder.

 

Section 13.08                          Parties in Interest.  This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their successors and
permitted assigns, and nothing herein, express or implied (including, without
limitation, the provisions of Article IX relating to indemnified parties),
is intended to or shall confer upon any other Person any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, except as specifically set forth on Schedule 13.08.

 

Section 13.09                          Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

Section 13.10                          Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT.  EACH OF THE PARTIES
HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER

 

90

 

AND (B) ACKNOWLEDGES
THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.10.

 

Section 13.11                          Headings.  The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.  Unless otherwise expressly provided for in
this Agreement, the word “including” or any variation thereof means “including,
without limitation” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.

 

Section 13.12                          Survival of Covenants.  Except as expressly set forth in any
Ancillary Agreement, the covenants, representations and warranties contained in
this Agreement and each Ancillary Agreement, and Liability for the breach of
any obligations contained herein or therein, shall survive the Separation and
shall remain in full force and effect.

 

[Signature page follows]

 

91

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.

 

	
   

  	
  VIACOM
  INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
  /s/
  Sumner M. Redstone

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Sumner
  M. Redstone

  
	
   

  	
   

  	
  Title:

  	
  Chairman
  of the Board and

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEW
  VIACOM CORP.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
  /s/ Sumner
  M. Redstone

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Sumner
  M. Redstone

  
	
   

  	
   

  	
  Title:

  	
  Chairman
  of the Board

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