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Exhibit 10.1
SAILS MANDATORILY EXCHANGEABLE SECURITIES CONTRACT
dated as of
May 22, 2000
among
GAYLORD ENTERTAINMENT COMPANY,
OLH G.P.,
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
CREDIT SUISSE FIRST BOSTON CORPORATION, as Agent
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions................................................2
ARTICLE 2
SALE AND PURCHASE
SECTION 2.01. Sale and Purchase.........................................11
SECTION 2.02. Purchase Price............................................11
SECTION 2.03. Payment for and Delivery of Contract Shares...............11
SECTION 2.04. Cash Settlement Option....................................12
SECTION 2.05. Contract Payments.........................................12
SECTION 2.06. Optional Prepayment.......................................13
ARTICLE 3
TERMINATION BY SELLER
SECTION 3.01. Termination by Seller.....................................13
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER AND GUARANTOR
SECTION 4.01. Representations and Warranties of Seller and Guarantor....14
SECTION 4.02. Representations and Warranties of Buyer...................17
SECTION 4.03. Limitation on Liability of Guarantor......................17
ARTICLE 5
CONDITIONS TO CERTAIN OBLIGATIONS OF BUYER AND SELLER
SECTION 5.01. Conditions to Certain Obligations of Buyer................18
SECTION 5.02. Conditions to Certain Obligations of Seller...............19
ARTICLE 6
COVENANTS
SECTION 6.01. Taxes.....................................................19
SECTION 6.02. Forward Contract..........................................22
SECTION 6.03. Notices...................................................22
SECTION 6.04. Further Assurances........................................23
SECTION 6.05. Actions That Could Cause Seller to Become an Affiliate....23
SECTION 6.06. Securities Contract.......................................23
SECTION 6.07. Purpose...................................................23
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SECTION 6.08. Financial Covenants.......................................24
SECTION 6.09. Certificate of Compliance.................................25
ARTICLE 7
ADJUSTMENTS
SECTION 7.01. Dilution Adjustments......................................25
SECTION 7.02. Reorganization Events.....................................27
SECTION 7.03. Provisions Relating to Reorganization Events and
Spin-Offs.........................................................28
SECTION 7.04. Termination and Payment...................................28
ARTICLE 8
ACCELERATION
SECTION 8.01. Acceleration..............................................29
ARTICLE 9
GUARANTEE
SECTION 9.01. Guarantee.................................................32
SECTION 9.02. Guarantee Absolute........................................33
SECTION 9.03. Waivers and Acknowledgments...............................34
SECTION 9.04. Subrogation...............................................34
SECTION 9.05. Termination...............................................34
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices..................................................35
SECTION 10.02. Governing Law; Submission to Jurisdiction;
Severability; Waiver of Jury Trial................................35
SECTION 10.03. Entire Agreement; Other..................................36
SECTION 10.04. Amendments, Waivers......................................36
SECTION 10.05. No Third Party Rights, Successors and Assigns............36
SECTION 10.06. Calculation Agent........................................37
SECTION 10.07. Netting and Set-off......................................37
SECTION 10.08. Matters Related to Credit Suisse First Boston
Corporation, as Agent.............................................38
SECTION 10.09. Counterparts.............................................39
SECTION 10.10. Limited Recourse.........................................39
SECTION 10.11. Payment Date Other than a Business Day...................39
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SAILS MANDATORILY EXCHANGEABLE SECURITIES CONTRACT
THIS AGREEMENT is made as of this 22nd day of May, 2000 among GAYLORD
ENTERTAINMENT COMPANY, a Delaware corporation ("SELLER"), OLH G.P., a Tennessee
general partnership ("GUARANTOR"), CREDIT SUISSE FIRST BOSTON CORPORATION, as
agent (the "AGENT") hereunder, and CREDIT SUISSE FIRST BOSTON INTERNATIONAL
("BUYER").
WHEREAS, Seller owns shares of Series C Preferred Stock, par value
$0.01 per share, of Viacom Inc., a Delaware corporation (the "ISSUER"), or
security entitlements in respect thereof (the "PREFERRED STOCK"), that are
convertible at the option of Seller into shares of Class B Common Stock, par
value $0.01 per share, of the Issuer, or security entitlements in respect
thereof (the "COMMON STOCK");
WHEREAS, Seller, Guarantor, Buyer and the Agent have entered into an
agreement entitled "Indicative Terms and Conditions for Private SAILS" (the
"TERM SHEET") dated as of April 13, 2000, pursuant to which (i) Seller and Buyer
have agreed to sell and purchase shares of Common Stock at the time and on the
terms set forth therein and (ii) Guarantor has agreed, commencing on the Closing
Date, to guarantee the obligations of Seller under the Term Sheet, this
Agreement and the Pledge Agreement (as defined herein) on the terms and subject
to the conditions set forth herein and therein;
WHEREAS, the Term Sheet provides that the parties thereto will enter
into final documentation, consisting of a SAILS Mandatorily Exchangeable
Securities Contract and a SAILS Pledge Agreement, relating to the transactions
contemplated by the Term Sheet;
WHEREAS, Seller has agreed, pursuant to the Pledge Agreement, to grant
Buyer a security interest in certain shares of Preferred Stock to secure the
obligations of Seller hereunder;
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. As used herein, the following words and
phrases shall have the following meanings:
"ACCELERATION AMOUNT" has the meaning provided in Section 8.01.
"ACCELERATION AMOUNT NOTICE" has the meaning provided in Section
8.01.
"ACCELERATION DATE" has the meaning provided in Section 8.01.
"ACCELERATION EVENT" has the meaning provided in Section 8.01.
"AGGREGATE CONTRACT PRICE" means, with respect to any date, an amount
in cash equal to the product of (i) the Issue Price as of such date and (ii) the
Base Amount as of such date.
"BANKRUPTCY CODE" has the meaning provided in Section 6.06.
"BASE AMOUNT" has the meaning provided in Section 2.01.
"BUSINESS DAY" means any day on which commercial banks are open for
business in New York City.
"CALCULATION AGENT" means Credit Suisse First Boston International.
"CASH SETTLEMENT AMOUNT" means an amount of cash equal to the product
of the Maturity Price and the number of shares of Common Stock equal to the
product of (i) the Base Amount and (ii) the Exchange Rate.
"CHANGE IN TAX LAW" has the meaning provided in Section 6.01(b)(i).
"CLOSING DATE" means the date of this Agreement.
"CLOSING PRICE" of any security on any date of determination means the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such security on the Exchange for the regular trading session on
such date or, if such security is not listed on a national securities exchange
or quoted on a national automated quotation system, the last quoted bid price
for such security in the over-the-counter market for the regular trading session
on such date, as reported by the National Quotation Bureau or similar
organization, or, if such bid
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price is not available, the market value of such security on such date as
determined by the Calculation Agent.
"COLLATERAL" has the meaning provided in the Pledge Agreement.
"COLLATERAL ACCOUNT" has the meaning provided in the Pledge Agreement.
"CONSOLIDATED SUBSIDIARY" means at any date any subsidiary or other
entity the accounts of which would be consolidated with those of Seller in its
consolidated financial statements if such statements were prepared as of such
date.
"CONTRACT SHARE AMOUNT" has the meaning provided in Section 2.03(b).
"CONTRACT SHARES" has the meaning provided in Section 2.03(b).
"CONTRACT PAYMENT" has the meaning provided in Section 2.05.
"CONTRACT PAYMENT DATE" has the meaning provided in Section 2.05.
"CONVERSION RATE" has the meaning provided in the Pledge Agreement.
"COVENANT TERMINATION DATE" means the earliest of (i) the date on which
a Subsequent Guarantor executes and delivers an Eligible Guarantee for the
benefit of Buyer, (ii) the date on which Seller becomes the owner of the
Opryland Hotel located in Nashville, Tennessee and executes and delivers an
Eligible Mortgage for the benefit of Buyer, (iii) the date on which Seller
provides to Buyer credit support substantially equivalent to that provided by an
Eligible Guarantee and reasonably acceptable to Buyer or (iv) the Final Contract
Payment Date. The parties hereto agree that if the execution by a Subsequent
Guarantor of an Eligible Guarantee would impair the ability of such Subsequent
Guarantor to issue Eligible Notes, the parties will negotiate in good faith to
agree upon credit support substantially equivalent to that provided by an
Eligible Guarantee and reasonably acceptable to Buyer.
"CREDIT AGREEMENT" means the Credit Agreement dated as of August 19,
1997 among Seller, the Banks party thereto and Bank of America, N.A., as
Administrative Lender thereunder, as amended from time to time.
"CSFB" has the meaning provided in Section 6.01(b).
"CUSTODIAN" has the meaning provided in the Pledge Agreement.
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"DEBT" means, with respect to any Person, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee that are capitalized in accordance with
generally accepted accounting principles in the United States of America, as in
effect from time to time, (v) all obligations of such Person to purchase
securities (or other property) that arise out of or in connection with the sale
of the same or substantially similar securities (or property), (vi) all
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid under a letter of credit or similar instrument, (vii)
all equity securities of such Person subject to repurchase or redemption
otherwise than at the sole option of such Person, (viii) all Debt secured by a
Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person and (vii) all Guarantees by such Person of Debt of
another Person. Notwithstanding the foregoing, the Debt of any Person shall not
include any Permitted Debt of such Person.
"ELIGIBLE GUARANTEE" means a guarantee of the Obligations,
substantially in the form of Article 9, which guarantee is secured, on terms
reasonably satisfactory to Buyer, by a first priority mortgage on the Opryland
Hotel located in Nashville, Tennessee (which mortgage may equally and ratably
secure Eligible Notes or a guarantee thereof).
"ELIGIBLE MORTGAGE" means an agreement pursuant to which the obligation
of Seller to make Contract Payments hereunder (up to a maximum of $40 million)
is secured, on terms reasonably satisfactory to Buyer, by a first priority
mortgage on the Opryland Hotel located in Nashville, Tennessee (which mortgage
may equally and ratably secure Eligible Notes).
"ELIGIBLE NOTES" means debt instruments that are rated at least Ba2 by
Moody's and BB by S&P.
"EXCHANGE" means, at any time, the principal national securities
exchange or automated quotation system, if any, on which the Common Stock is
listed or quoted at such time.
"EXCHANGE BUSINESS DAY" means any day that is (or, but for the
occurrence of a Market Disruption Event, would have been) a trading day on the
Exchange, other than a day on which trading on the Exchange is scheduled to
close prior to its regular weekday closing time.
"EXCHANGE RATE" has the meaning provided in Section 2.03(c).
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"EXTRAORDINARY CASH DIVIDEND" means, with respect to any security for
any given fiscal period, any cash dividends paid in respect of such security
during such period in excess of Ordinary Cash Dividends for such period.
"FINAL CONTRACT PAYMENT DATE" means the earlier of (i) the date on
which Seller shall have prepaid all unpaid Contract Payments pursuant to Section
2.06 and (ii) the Maturity Date.
"FREE STOCK" means Common Stock (and, if applicable, any New Common
Stock distributed to holders of Common Stock) that is not subject to any
Transfer Restrictions in the hands of Seller immediately prior to delivery to
Buyer hereunder and would not upon delivery to Buyer be subject to any Transfer
Restrictions in the hands of Buyer.
"GAYLORD PAYMENT AMOUNT" has the meaning set forth in Section
2.03(a)(ii).
"GOVERNMENT SECURITIES" has the meaning provided in the Pledge
Agreement.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by virtue of an
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
to reimburse a bank for amounts drawn under a letter of credit for the purpose
of paying such Debt or (iii) entered into for the purpose of assuring in any
other manner the holder of such Debt of the payment thereof or to protect such
holder against loss in respect thereof (in whole or in part); provided that the
term "GUARANTEE" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "GUARANTEE" used as a verb has a
corresponding meaning.
"INITIAL ACCRUAL DATE" means August 22, 2003, or if such day is not a
Business Day, the immediately succeeding Business Day.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"ISSUE PRICE" has the meaning provided in Section 2.03(c).
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"LIEN" means, with respect to any asset, any lien, mortgage, security
interest, pledge, charge or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset.
"MARKET DISRUPTION EVENT" means the occurrence or the existence on any
Exchange Business Day during the one-half hour period ending at the close of the
regular trading session on the relevant exchange of any suspension of or
limitation in trading (by reason of movements in price exceeding limits
permitted by the relevant exchange or otherwise) in the Common Stock or in
listed options on the Common Stock, if any, if, in the determination of the
Calculation Agent, such suspension or limitation is material.
"MARKET VALUE" means, as of any date with respect to any share of
Common Stock, the Closing Price per share of Common Stock for the Exchange
Business Day prior to such date.
"MARKETABLE SECURITIES" means shares of the class of common stock of a
Publicly-Traded Entity that is traded on a national securities exchange or
automatic interdealer quotation system in the United States, which shares are
not subject to any Transfer Restrictions.
"MATURITY DATE" means May 22, 2007.
"MATURITY PRICE" means the average of the Closing Prices per share of
the Common Stock on the 20 Trading Days beginning 30 Exchange Business Days
immediately prior to the Maturity Date; provided that if there are not 20
Trading Days during the period beginning 30 Exchange Business Days immediately
prior to the Maturity Date and ending on the Exchange Business Day immediately
prior to the Maturity Date, the Maturity Price shall be 1/20th of the sum of (i)
the Closing Prices per share of the Common Stock on each of the Trading Days
during such period and (ii) the product of (x) the market value of the Common
Stock as of the Maturity Date as determined by the Calculation Agent and (y) the
difference between 20 and the number of Trading Days during such period.
"MOODY'S" means Moody's Investors Service, Inc.
"NEW COMMON STOCK" has the meaning provided in Section 7.01(c).
"NON-STOCK CONSIDERATION" has the meaning provided in Section 7.02.
"OBLIGATIONS" has the meaning provided in Section 9.01(a).
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"OPTIONAL TERMINATION DATE" has the meaning provided in Section 3.01.
"ORDINARY CASH DIVIDENDS" means, with respect to any security for any
given fiscal period, cash dividends paid in respect of such security during such
period, but only to the extent that the aggregate amount paid during such period
does not exceed the aggregate cash dividends paid in respect of such security
for the fiscal period immediately preceding the fiscal period that includes the
date of this Agreement.
"ORIGINAL COMMON STOCK" has the meaning provided in Section 7.01(c).
"PERMITTED DEBT" means (i) with respect to Seller, any Debt of Seller
owed to any of its wholly owned subsidiaries and (ii) with respect to any wholly
owned subsidiary of Seller, any Debt of such subsidiary owed to Seller or to any
of Seller's wholly owned subsidiaries, in each case, so long as such Debt
continues to be owed to Seller or to any of Seller's wholly owned subsidiaries,
as the case may be.
"PERMITTED SUBSIDIARY TRANSFEREE" has the meaning provided in 6.08(d).
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLEDGE AGREEMENT" means the SAILS Pledge Agreement dated as of the
date hereof among Seller, Buyer and the Agent, as amended from time to time.
"POTENTIAL ADJUSTMENT EVENT" has the meaning provided in Section 7.01.
"PUBLICLY-TRADED ENTITY" means a surviving or continuing corporation of
the Issuer (or any successor) following a Reorganization Event, or a corporation
the capital stock of which is distributed in a Spin-Off, a class of the common
stock of which is traded on any national securities exchange or automatic
interdealer quotation system in the United States; provided that in the case of
a Reorganization Event, the product of (i) the Closing Price of such class of
such surviving or continuing corporation's common stock on the Exchange Business
Day immediately succeeding such Reorganization Event multiplied by (ii) the
number of shares of such class of such surviving or continuing corporation's
common stock held by non-affiliates of such corporation shall not be less than
the product of (A) the Closing Price of the Common Stock on the Exchange
Business Day immediately preceding such Reorganization Event and (B) the number
of shares of Common Stock held by non-affiliates of the Issuer.
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"PURCHASE PRICE" has the meaning provided in Section 2.02.
"REORGANIZATION EVENT" has the meaning provided in Section 7.02.
"REORGANIZATION TERMINATION DATE" has the meaning provided in
Section 7.02.
"REPAYMENT AMOUNT" has the meaning provided in Section 2.03(a)(i).
"REPLACEMENT VALUE" has the meaning provided in Section 8.01.
"REQUIRED PAYMENT DATE" has the meaning provided in Section 6.01(b)(i).
"S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc.
"SECURED PARTY" has the meaning provided in the Pledge Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY" has the meaning provided in Section 9.01(c).
"SHARE COLLATERAL" has the meaning provided in the Pledge Agreement.
"SPIN-OFF" has the meaning provided in Section 7.01.
"SUBSEQUENT GUARANTOR" means (i) Guarantor or (ii) if Guarantor shall
have transferred or contributed the Opryland Hotel located in Nashville,
Tennessee to a Permitted Subsidiary Transferee as contemplated by Section
6.08(d)(iii), the Permitted Subsidiary Transferee, in either case, from and
after the date Seller, Guarantor or the Permitted Subsidiary Transferee, as the
case may be, shall have issued Eligible Notes.
"TAXES" has the meaning provided in Section 6.01(b).
"TAX EVENT TERMINATION DATE" has the meaning provided in Section
6.01(b)(iii).
"TEMPORARY CASH INVESTMENT" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates
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of deposit, or bankers acceptances issued by any bank or trust company that has
capital, surplus and undivided profits aggregating at least $500,000,000 and
that issues (or the parent of which issues) certificates of deposit or
commercial paper with a rating described in clause (ii) above, (iv) repurchase
agreements with respect to securities described in clause (i) above entered into
with an office of a bank or trust company meeting the criteria specified in
clause (iii) above, (v) obligations exempt from federal income tax issued by any
State of the United States or agency thereof rated at least AA by S&P and Aa by
Moody's or (vi) money market funds that invest substantially all of their assets
in Investments of the types described in clauses (i)-(v) above; provided in each
case that such Investment matures within one year from the date of acquisition
thereof by Guarantor.
"TERMINATION AMOUNT NOTICE" has the meaning provided in Section 7.04.
"THRESHOLD PRICE" has the meaning provided in Section 2.03(c).
"TRADING DAY" is defined as any Exchange Business Day on which there is
not a Market Disruption Event.
"TRANSFER RESTRICTION" means, with respect to any share of Common Stock
or item of collateral pledged under the Pledge Agreement, any condition to or
restriction on the ability of the owner thereof to sell, assign or otherwise
transfer such share of Common Stock or item of collateral or to enforce the
provisions thereof or of any document related thereto whether set forth in such
item of collateral itself or in any document related thereto, including, without
limitation, (i) any requirement that any sale, assignment or other transfer or
enforcement of such share of Common Stock or item of collateral be consented to
or approved by any Person, including, without limitation, the issuer thereof or
any other obligor thereon, (ii) any limitations on the type or status, financial
or otherwise, of any purchaser, pledgee, assignee or transferee of such share of
Common Stock or item of collateral, (iii) any requirement of the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any other
document of any Person to the issuer of, any other obligor on or any registrar
or transfer agent for, such share of Common Stock or item of collateral, prior
to the sale, pledge, assignment or other transfer or enforcement of such share
of Common Stock or item of collateral and (iv) any registration or qualification
requirement or prospectus delivery requirement for such share of Common Stock or
item of collateral pursuant to any federal, state or foreign securities law
(including, without limitation, any such requirement arising as a result of Rule
144 or Rule 145 under the Securities Act); provided that the required delivery
of any assignment, instruction or entitlement order from the seller, pledgor,
assignor or
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transferor of such share of Common Stock or item of collateral, together with
any evidence of the corporate or other authority of such Person, shall not
constitute a "TRANSFER RESTRICTION".
"TREASURY RATE" means, on any given date for any given period, the rate
for the auction held on such date of direct obligations of the United States
("TREASURY BILLS") having a maturity comparable to such period that appears on
Telerate Page 56 (or such other page as may replace such page on such service
for the purpose of displaying such rate) or Page 57 (or such other page as may
replace such page on such service for the purpose of displaying such rate) by
3:00 p.m., New York City time, on such date or, if such period does not so
appear, the rate obtained by linear interpolation between the rates that appear
for the next longer period and the next shorter period. If the Treasury Rate
does not appear on Telerate Page 56 or Page 57 by 3:00 p.m. on such date, the
Treasury Rate for such date will be the auction rate of such Treasury Bills, as
published in H.15(519) under the heading "Treasury Bills-auction average
(investment)" or, if not so published by 3:00 p.m., New York City time, on such
date, the auction average rate on such date (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of the auction of Treasury Bills having a maturity
comparable to such period is not displayed, published or reported as provided
above by 3:00 p.m., New York City time, on such date or if no such auction is
held on such date, then the Treasury Rate will be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent, on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
calculated using the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on such date, of three leading
primary United States government securities dealers selected by the Calculation
Agent for the issue of Treasury Bills with a remaining maturity closest to such
period.
"UCC" has the meaning provided in the Pledge Agreement.
"U.S. TAXING AUTHORITY" has the meaning provided in Section 6.01(b).
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ARTICLE 2
SALE AND PURCHASE
SECTION 2.01. Sale and Purchase. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell to Buyer, and Buyer agrees
to purchase and acquire from Seller, the number of shares of Common Stock equal
to the product of 10,937,900 (the "BASE AMOUNT") and the Exchange Rate.
SECTION 2.02. Purchase Price. The purchase price (the "PURCHASE PRICE")
shall be $506,497,017.93 in cash.
SECTION 2.03. Payment for and Delivery of Contract Shares. (a) Upon
the terms and subject to the conditions of this Agreement, Buyer shall make
payments to or for the account of Seller at the time and in the manner provided
below.
(i) On the Closing Date, Buyer shall deliver to Bank of
America, N.A. $394,141,908.94 in cash (the "REPAYMENT AMOUNT") in
immediately available funds by wire transfer to an account designated
by Bank of America, N.A.
(ii) On the Closing Date, Buyer shall deliver to Seller an
amount in cash equal to the excess (the "GAYLORD PAYMENT AMOUNT") of
(A) the Purchase Price over (B) the Repayment Amount at the offices
of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017, or at such other place as shall be agreed upon by Buyer and
Seller, paid by wire transfer of immediately available funds to an
account designated by Seller.
(b) On the Maturity Date, Seller agrees, subject to Section 2.04, to
deliver to Buyer (i) a number of shares of Free Stock (the "CONTRACT SHARES")
equal to the product (the "CONTRACT SHARE AMOUNT"), rounded down to the nearest
whole number, of (A) the Base Amount and (B) the Exchange Rate and (ii) cash in
an amount equal to the value (based on the Maturity Price) of any fractional
share not delivered as a result of such rounding. If (x) by 10:00 a.m., New York
City time on the Maturity Date, Seller has not otherwise effected such delivery
of Common Stock or delivered cash in lieu thereof pursuant to Section 2.04 and
(y) the Collateral then held by or on behalf of Secured Party as collateral
under the Pledge Agreement is Free Stock, then (i) Seller shall be deemed not to
have elected to deliver cash in lieu of shares of Free Stock pursuant to Section
2.04 (notwithstanding any notice by Seller to the contrary) and (ii) the
delivery provided by this Section 2.03(b) shall be effected by delivery to Buyer
from the Collateral Account in the manner set forth in the Pledge Agreement of a
number
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of shares of Free Stock then held by or on behalf of Secured Party as collateral
under the Pledge Agreement equal to the number thereof required to be delivered
by Seller to Buyer pursuant to this Section 2.03(b); provided that,
notwithstanding the foregoing and without limiting the generality of Section
8.01, if Seller gives notice of Seller's election to deliver cash in lieu of
shares of Free Stock on the Maturity Date pursuant to Section 2.04 and fails to
deliver the Cash Settlement Amount on the Maturity Date as provided in Section
2.04, Seller shall be in breach of this Agreement. If Seller elects to deliver
cash in lieu of shares of Free Stock, Seller understands that Buyer (or a
counterparty to a transaction entered into by Buyer to hedge Buyer's exposure to
this Agreement) will engage in market activities in reliance on such election
and in anticipation of receiving the Cash Settlement Amount, and Seller shall be
liable to Buyer for any losses incurred by Buyer or its affiliates as a result
of any such breach, including without limitation any aggregate net losses
incurred in connection with any decrease in the Closing Price of the Common
Stock subsequent to the 30th Exchange Business Day immediately preceding the
Maturity Date that results in an aggregate net loss realized by Buyer in
connection with such market activities.
(c) The "EXCHANGE RATE" shall be determined by the Calculation Agent in
accordance with the following formula, and is subject to adjustment as a result
of certain events as provided in Article 7 and as provided in Section 5(i) of
the Pledge Agreement: (i) if the Maturity Price is less than or equal to
$75.6605 (the "THRESHOLD PRICE") but greater than $56.0448 (the "ISSUE PRICE"),
the Exchange Rate shall be a ratio (rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th) equal to the Issue Price divided by the Maturity Price, (ii) if the
Maturity Price is greater than the Threshold Price, the Exchange Rate shall be
0.7407 and (iii) if the Maturity Price is equal to or less than the Issue Price,
the Exchange Rate shall be one (1).
SECTION 2.04. Cash Settlement Option. Seller may, upon written notice
delivered to Buyer at least 35 Exchange Business Days prior to the Maturity
Date, elect to deliver the Cash Settlement Amount to Buyer on the Maturity Date
by wire transfer of immediately available funds to an account designated by
Buyer, in lieu of the shares of Common Stock to be delivered on the Maturity
Date pursuant to Section 2.03(b).
SECTION 2.05. Contract Payments. Seller shall make a cash payment
(each, a "CONTRACT PAYMENT") to Buyer, by wire transfer of immediately available
funds to an account designated by Buyer, on November 22, February 22, May 22 and
August 22 of each year and on the Maturity Date (each, a "CONTRACT PAYMENT
DATE"), commencing on November 22, 2003, in an amount equal to the product of
(i) 5.00%, (ii) the average Aggregate Contract Price during the period from and
including the Contract Payment Date immediately preceding such
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Contract Payment Date (or, if there is no preceding Contract Payment Date, from
and including the Initial Accrual Date) to but excluding the date of such
payment, (iii) the number of calendar days in such period and (iv) 1/365.
SECTION 2.06. Optional Prepayment. Seller may prepay any Contract
Payment by making a cash payment to Buyer, by wire transfer of immediately
available funds to an account designated by Buyer, in an amount equal to the net
present value as of the date of such prepayment (calculated by the Calculation
Agent using a discount rate equal to the Treasury Rate for the period beginning
on the date of such prepayment and ending on the Contract Payment Date on which
such Contract Payment is due) of such Contract Payment.
ARTICLE 3
TERMINATION BY SELLER
SECTION 3.01. Termination by Seller. At any time on or after the date
one year following the Closing Date, Seller may terminate this Agreement in
whole or in part upon 35 Exchange Business Days' prior written notice to Buyer
(the termination date specified in such notice, the "OPTIONAL TERMINATION
DATE"). If Seller terminates this Agreement in whole, Seller shall make a cash
payment, by wire transfer of immediately available funds to an account
designated by Buyer, to Buyer on the Optional Termination Date in an amount
equal to the Replacement Value (calculated in the manner set forth in Section
8.01 as if the Optional Termination Date were the Acceleration Date, and
expressed as a cash amount). If Seller terminates this Agreement in part, Seller
shall specify the number of shares of Common Stock with respect to which this
Agreement is to be terminated and (i) Seller shall make a cash payment, by wire
transfer of immediately available funds to an account designated by Buyer, to
Buyer on the Optional Termination Date in an amount equal to the Replacement
Value (calculated in the manner set forth in Section 8.01 as if the Optional
Termination Date were the Acceleration Date, and expressed as a cash amount;
provided that for purposes of such calculation, the Base Amount shall be deemed
to be such number of shares of Common Stock with respect to which this Agreement
is to be terminated) and (ii) the Base Amount shall be reduced by such number of
shares of Common Stock with respect to which this Agreement is to be terminated.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER AND GUARANTOR
SECTION 4.01. Representations and Warranties of Seller and Guarantor.
Each of Seller and Guarantor represents and warrants to Buyer that:
(a) Seller is a corporation duly organized and existing in good
standing under the laws of its jurisdiction of incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted.
(b) Guarantor is a partnership duly organized and existing in good
standing under the laws of its jurisdiction of organization and has the
requisite partnership power to own its properties and to carry on its business
as now being conducted.
(c) The execution and delivery of this Agreement and, in the case of
Seller, the Pledge Agreement and the performance by Seller and Guarantor of
their obligations hereunder and, in the case of Seller, thereunder do not
violate or conflict with any provision of the constitutive documents of Seller
or Guarantor, any law applicable to Seller or Guarantor, any order or judgment
of any court or other agency of government applicable to Seller, Guarantor or
any of their assets or any contractual restriction binding on or affecting
Seller, Guarantor or any of their assets.
(d) All government and other consents that are required to have been
obtained by Seller or Guarantor with respect to this Agreement or, in the case
of Seller, the Pledge Agreement have been obtained and are in full force and
effect and all conditions of any such consents have been complied with. Each of
Seller and Guarantor has complied and will comply with all applicable disclosure
or reporting requirements in respect of the transactions contemplated hereby
and, in the case of Seller, by the Pledge Agreement, including without
limitation any requirements imposed by Section 13 or Section 16 of the
Securities Exchange Act of 1934, as amended, or the rules and regulations
thereunder.
(e) Seller has the requisite corporate power and authority to enter
into and perform this Agreement and the Pledge Agreement and to deliver the
Contract Shares in accordance with the terms hereof. Guarantor has the requisite
partnership power and authority to enter into and perform this Agreement. The
execution and delivery by Seller and Guarantor of this Agreement and, in the
case of Seller, the Pledge Agreement and the consummation by Seller and
Guarantor of the transactions contemplated hereby (including the delivery by
Seller of the Contract Shares) and, in the case of Seller, thereby have been
duly authorized by all necessary action. Each of Seller and Guarantor has duly
executed and
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delivered this Agreement, and in the case of Seller, the Pledge Agreement. The
obligations of Seller and Guarantor under this Agreement and, in the case of
Seller, the Pledge Agreement constitute the legal, valid and binding obligations
of Seller and Guarantor, respectively, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and subject, as
to enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).
(f) No Acceleration Event or event that, with the giving of notice or
the lapse of time or both, would constitute an Acceleration Event has occurred
and is continuing and no such event would occur as a result of the execution and
delivery by either Seller or Guarantor of, or the performance by either Seller
or Guarantor of its obligations under, this Agreement or, in the case of Seller,
the Pledge Agreement.
(g) There is not pending or, to the knowledge of either Seller or
Guarantor, threatened against Seller, Guarantor or any of their affiliates any
action, suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator (including without
limitation any bankruptcy, insolvency or similar proceeding) that is likely to
affect the legality, validity or enforceability against Seller or Guarantor of
this Agreement or, in the case of Seller, the Pledge Agreement or the ability of
either Seller or Guarantor to perform its obligations under this Agreement or,
in the case of Seller, the Pledge Agreement.
(h) Each of Seller and Guarantor is acting for its own account, and
has made its own independent decision to enter into this Agreement and, in the
case of Seller, the Pledge Agreement and as to whether this Agreement and, in
the case of Seller, the Pledge Agreement are appropriate or proper for it based
upon its own judgment and upon advice of such advisors as it deems necessary.
Each of Seller and Guarantor acknowledges and agrees that it is not relying, and
has not relied, upon any communication (written or oral) of Buyer or any
affiliate, employee or agent of Buyer with respect to the legal, accounting, tax
or other implications of this Agreement and, in the case of Seller, the Pledge
Agreement and that it has conducted its own analyses of the legal, accounting,
tax and other implications hereof and, in the case of Seller, thereof; it being
understood that information and explanations related to the terms and conditions
of this Agreement or the Pledge Agreement shall not be considered investment
advice or a recommendation to enter into this Agreement or the Pledge Agreement.
Each of Seller and Guarantor is entering into this Agreement and, in the case of
Seller, the Pledge Agreement with a full understanding of all of the terms and
risks hereof and, in the case of Seller, thereof (economic and otherwise) and is
capable of evaluating and
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understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks. Each of Seller and
Guarantor is also capable of assuming (financially and otherwise), and assumes,
those risks. Each of Seller and Guarantor acknowledges that neither Buyer nor
any affiliate, employee or agent of Buyer is acting as a fiduciary for or an
advisor to it in respect of this Agreement or, in the case of Seller, the Pledge
Agreement.
(i) Seller is not an "affiliate", within the meaning of Rule 144 under
the Securities Act, of the Issuer. Neither Seller nor Guarantor is, on the date
of this Agreement, in possession of any material non-public information
regarding the Issuer.
(j) Delivery of shares of Common Stock by Seller pursuant to this
Agreement will pass to Buyer title (or security entitlements) to such shares
free and clear of any Liens or Transfer Restrictions, except for those created
pursuant to the Pledge Agreement.
(k) Seller has a valid business purpose for entering into this
Agreement, and the transaction contemplated hereby is consistent with Seller's
overall investment strategy. Seller currently expects that Seller will not elect
to deliver cash in lieu of Common Stock on the Maturity Date pursuant to Section
2.04. Seller intends to consider all relevant economic and market factors in
determining whether to deliver shares of Common Stock or cash on the Maturity
Date, and Seller shall not be foreclosed from electing to deliver cash in lieu
of shares of Common Stock on the Maturity Date as a result of the statement of
current intention contained in the immediately preceding sentence.
(l) Seller is not and, after giving effect to the transactions
contemplated hereby, will not be an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended.
(m) There are no Liens existing on the date hereof on any assets of
Seller or any of its Consolidated Subsidiaries securing any obligation in excess
of $5,000,000. The aggregate amount of all obligations in individual amounts
equal to or greater than $500,000 and less than or equal to $5,000,000 that are
secured by Liens on assets of Seller or any of its Consolidated Subsidiaries
does not exceed $20,000,000.
(n) Each of Seller and Guarantor has performed all of the covenants
and obligations to be performed by it on or prior to the date hereof under the
Term Sheet.
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SECTION 4.02. Representations and Warranties of Buyer. Buyer
represents and warrants to Seller that:
(a) Buyer is a company duly organized and existing in good standing
under the laws of its jurisdiction of incorporation and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted.
(b) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Buyer of Buyer's obligations hereunder and
thereunder do not violate or conflict with any provision of the constitutive
documents of Buyer, any law applicable to Buyer, any order or judgment of any
court or other agency of government, applicable to Buyer or any of Buyer's
assets or any contractual restriction binding on or affecting Buyer or any of
Buyer's assets.
(c) All government and other consents that are required to have been
obtained by Buyer with respect to this Agreement or the Pledge Agreement have
been obtained and are in full force and effect and all conditions of any such
consents have been complied with.
(d) Buyer has the requisite corporate power and authority to enter
into and perform this Agreement and the Pledge Agreement. The execution and
delivery by Buyer of this Agreement and the Pledge Agreement and the
consummation by Buyer of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action. This Agreement and the Pledge
Agreement have been duly executed and delivered by Buyer. Buyer's obligations
under this Agreement and the Pledge Agreement constitute Buyer's legal, valid
and binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).
(e) There is not pending or, to Buyer's knowledge, threatened against
Buyer any action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator (including
without limitation any bankruptcy, insolvency or similar proceeding) that is
likely to affect the legality, validity or enforceability against Buyer of this
Agreement or the Pledge Agreement or Buyer's ability to perform Buyer's
obligations under this Agreement or the Pledge Agreement.
SECTION 4.03. Limitation on Liability of Guarantor. Notwithstanding any
provision of this Agreement to the contrary, the liability of Guarantor with
respect
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to any breach by Guarantor of any representation or warranty relating to Seller
set forth in Section 4.01, together with any liability of Guarantor pursuant to
Article 9, shall not exceed $40 million.
ARTICLE 5
CONDITIONS TO CERTAIN OBLIGATIONS OF BUYER AND SELLER
SECTION 5.01. Conditions to Certain Obligations of Buyer. The
obligation of Buyer to deliver the Repayment Amount and the Gaylord Payment
Amount on the Closing Date is subject to the satisfaction of the following
conditions:
(a) The representations and warranties of Seller and Guarantor
contained in Section 4.01 and the representations and warranties of Seller
contained in the Pledge Agreement shall be true and correct as of the Closing
Date.
(b) The Pledge Agreement shall have been executed by the parties
thereto, and Seller shall have delivered to Buyer the Initial Pledged Items in
accordance therewith, and Seller shall have executed UCC-1 financing statements
in the form of Exhibit B to the Pledge Agreement for filing in the appropriate
filing offices in each jurisdiction identified in Parts 4 and 5 of Exhibit C to
the Pledge Agreement. If any such collateral is subject to any Lien in favor of
the lenders under the Credit Agreement, Seller shall have obtained the full
release of such Lien, on terms reasonably satisfactory to Buyer, upon delivery
of the Repayment Amount.
(c) Each of Seller and Guarantor shall have performed all of the
covenants and obligations to be performed by it under this Agreement and, in the
case of Seller, the Pledge Agreement on or prior to the Closing Date.
(d) Seller shall have delivered to Buyer on or prior to the Closing
Date (i) an opinion of Sherrard & Roe, PLC to the effect set forth in Annex A
hereto and (ii) an opinion of Skadden, Arps, Slate, Meagher & Flom LLP to the
effect set forth in Annex B hereto.
(e) Seller shall have delivered to Buyer on or prior to the Closing
Date a certificate executed by the Chief Financial Officer and the Executive
Vice President of Corporate and Operational Development of Seller in the form
attached as Annex C hereto.
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SECTION 5.02. Conditions to Certain Obligations of Seller. The
obligation of Seller to deliver to Buyer the Initial Pledged Items pursuant to
the Pledge Agreement is subject to the satisfaction of the following conditions:
(a) The representations and warranties of Buyer contained in Section
4.02 shall be true and correct as of the Closing Date.
(b) Buyer shall have delivered the Repayment Amount and the Gaylord
Payment Amount on the Closing Date pursuant to Section 2.03(a).
(c) Buyer shall have delivered to Seller on or prior to the Closing
Date an opinion of counsel to the effect set forth in Annex D hereto.
ARTICLE 6
COVENANTS
SECTION 6.01. Taxes.
(a) Seller agrees that Seller shall pay any and all documentary,
stamp, transfer or similar taxes and charges that may be payable in respect of
the entry into this Agreement and the transfer and delivery of any Common Stock
pursuant hereto.
(b) If either Seller or Guarantor is required to withhold or deduct
any portion of any payment made by it in respect of this Agreement (based on law
as in effect as of the time such payment is required to be made) for or on
account of, any present or future taxes, duties, fines, penalties, assessments
or other governmental charges of whatsoever nature (or interest on any taxes,
duties, fines, penalties, assessments or other governmental charges of
whatsoever nature) ("TAXES") imposed, levied, collected, withheld or assessed
by, within or on behalf of the United States or any political subdivision or
governmental authority thereof or therein having power to tax (each, a "U.S.
TAXING AUTHORITY"), the following provisions shall apply:
(i) Seller or Guarantor, as the case may be, shall notify
Buyer of such requirement at least 180 days prior to date on which
such payment is required to be made (the "REQUIRED PAYMENT DATE");
provided that if Seller or Guarantor, as the case may be, is unable
to provide Buyer with 180 days' notice of such requirement as a result
of a statutory change or a Treasury regulation, notice, announcement,
ruling or other Treasury publication or applicable court decision
published after the date hereof
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(each, a "CHANGE IN TAX LAW") or as a result of a transfer by Buyer of
its rights and obligations in respect of this Agreement and the Pledge
Agreement pursuant to Section 10.05, (A) Seller or Guarantor, as the
case may be, shall notify Buyer of such requirement as promptly as
practicable following such Change in Tax Law or the receipt of notice
of such transfer pursuant to Section 10.05 and (B) Buyer shall have the
right to postpone the Required Payment Date for any such payment for as
long as reasonably necessary to effect the transfer contemplated by
paragraphs (ii) and (iii) below (but in no event shall Buyer postpone
the Required Payment Date to a date later than the date 180 days
following the date such notice is given). In the event that the
Required Payment Date for any such payment is postponed, Seller or
Guarantor, as the case may be, shall deliver such payment to Buyer on
the postponed Required Payment Date, together with interest thereon for
the period from and including the original Required Payment Date to but
excluding such postponed Required Payment Date at a per annum rate
equal to the three-month Treasury Rate as of the original Required
Payment Date.
(ii) Upon receipt of such notice, Buyer shall use its reasonable
best efforts to transfer its rights and obligations in respect of this
Agreement and the Pledge Agreement to another entity such that (A) such
payment would not be subject to withholding or deduction and (B) none
of Buyer, Credit Suisse First Boston ("CSFB") and any affiliate of CSFB
would be subject to increased costs (including balance sheet costs) as
a result of such transfer.
(iii) If (A) Buyer is unable to effect a transfer of the type
contemplated by paragraph (ii) above but (B) it is reasonably
practicable for Buyer to transfer its rights and obligations in respect
of this Agreement and the Pledge Agreement to another entity such that
such payment would not be subject to such withholding and deduction,
Buyer shall propose such transfer to Seller and Guarantor, and propose
that Seller and Guarantor, on the one hand, and Buyer, on the other
hand, share equally any increased costs (including balance sheet costs)
incurred by Buyer, CSFB or any affiliate of CSFB as a result of such
transfer. Seller, Guarantor and Buyer shall negotiate in good faith the
terms of any such proposed transfer and cost sharing. If (1) Seller and
Guarantor do not reasonably approve such proposal prior to the date
twenty Business Days preceding the Required Payment Date or (2) it is
not reasonably practicable for Buyer to transfer its rights and
obligations in respect of this Agreement and the Pledge Agreement to
another entity such that such payment would not be subject to such
withholding or deduction, Buyer may, by delivery of written notice to
Seller at least five Business Days
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prior to the Required Payment Date, terminate this Agreement on the
Business Day immediately preceding the Required Payment Date (such date
of termination, the "TAX EVENT TERMINATION DATE").
(iv) If Buyer elects to terminate this Agreement pursuant to
paragraph (iii) above, the Calculation Agent shall determine the
Replacement Value in the manner provided in Section 8.01 (calculated,
for purposes of this Section 6.01, as if the Tax Event Termination
Date were the Acceleration Date and expressed as a cash amount, and
representing the fair replacement value (including both intrinsic
and time value) to Buyer of an agreement with terms that would preserve
for Buyer the economic equivalent of the payments and deliveries that
Buyer and its affiliates would, but for the imposition of such
withholding or deduction, have been entitled to receive after the Tax
Event Termination Date hereunder). As promptly as reasonably
practicable after calculation of the Replacement Value (but in no
event later than the date three Business Days preceding the Tax Event
Termination Date), the Calculation Agent shall deliver to Buyer and
Seller a notice specifying the Replacement Value. On the Tax Event
Termination Date, Seller shall make a cash payment, by wire transfer
of immediately available funds to an account designated by Buyer, to
Buyer in an amount equal to the Replacement Value.
(v) Notwithstanding any provision of this Agreement to the
contrary, Seller or Guarantor, as the case may be, shall be permitted
to withhold or deduct from any payment made to Buyer hereunder any
amount required to be withheld or deducted for or on account of any
Taxes. Except as provided in Section 6.01(d), Seller or Guarantor, as
the case may be, shall have no obligation to gross up or indemnify
Buyer in respect of any amounts withheld pursuant to this Section
6.01(b)(v); provided that Seller or Guarantor, as the case may be,
shall be required to gross up or otherwise make Buyer whole for any
such amounts in the event that Seller or Guarantor, as the case may
be, fails to give the notice required by Section 6.01(b)(i) and such
failure materially prejudices Buyer's practical ability to effect the
transfers contemplated by paragraphs (ii) and (iii) of Section 6.01(b).
(vi) Upon Seller's request, Buyer shall (A) deliver to Seller a
properly completed Internal Revenue Service Form W-8 BEN (or any
successor or similar form) and (B) affirm in writing that this
Agreement does not represent in whole or in part an extension of credit
pursuant to a loan agreement entered into by Buyer as a bank in the
ordinary course of its banking business.
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(c) If (i) either Seller or Guarantor makes any payment in respect of
this Agreement without withholding or deduction for or on account of any Taxes
imposed, levied, collected, withheld or assessed by, within or on behalf of any
U.S. Taxing Authority and (ii) any Taxes are subsequently imposed on it for
failing to make such withholding or deduction, Seller or Guarantor, as the case
may be, and Buyer shall bear equally any liability (including penalties,
interest and expenses) arising from or with respect thereto.
(d) If either Seller or Guarantor makes any payment or delivery in
respect of this Agreement or the Pledge Agreement from or through any nonUnited
States jurisdiction, Seller or Guarantor, as the case may be, shall make such
payment or delivery free and clear of, and without withholding or deduction for
or on account of, any Taxes imposed, levied, collected, withheld or assessed by,
within or on behalf of such non-United States jurisdiction, or any political
subdivision or governmental authority thereof or therein having power to tax. In
the event such withholding or deduction is imposed, Seller or Guarantor, as the
case may be, agrees to indemnify Buyer for the full amount of such withholding
or deduction, as well as any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto.
SECTION 6.02. Forward Contract. Each of Seller and Buyer hereby agrees
that, unless otherwise required by law, it will treat this Agreement for all tax
purposes as a forward contract for the delivery of shares of Common Stock or
cash.
SECTION 6.03. Notices. Seller will cause to be delivered to Buyer:
(a) Immediately upon the occurrence of any Acceleration Event
hereunder (other than an Acceleration Event of the type described in Section
8.01(h)), notice of such occurrence; and
(b) In case at any time prior to the Maturity Date, Seller or any
officer of Seller receives notice that any event requiring that an adjustment be
calculated pursuant to Article 7 hereof shall have occurred or be pending, then
Seller shall promptly cause to be delivered to Buyer a notice identifying such
event and stating, if known to Seller, the date on which such event occurred or
is to occur and, if applicable, the record date relating to such event. Seller
shall cause further notices to be delivered to Buyer if Seller or any officer of
Seller shall subsequently receive notice of any further or revised information
regarding the terms or timing of such event or any record date relating thereto.
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SECTION 6.04. Further Assurances. From time to time from and after the
date hereof through the Maturity Date, each of the parties hereto shall use such
party's reasonable best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper and advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement in accordance with the terms and conditions
hereof, including (i) using reasonable best efforts to remove any legal
impediment to the consummation of such transactions and (ii) the execution and
delivery of all such deeds, agreements, assignments and further instruments of
transfer and conveyance necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement in accordance with the
terms and conditions hereof.
SECTION 6.05. Actions That Could Cause Seller to Become an Affiliate.
Seller shall notify Buyer immediately of Seller's intention to (i) purchase
Common Stock or any other equity security of the Issuer in an amount that would
cause Seller to become the beneficial owner, directly or indirectly, of more
than three percent of the outstanding shares of any equity security of the
Issuer, (ii) permit any of its officers or directors to accept, after the date
hereof, a position as an officer or director of the Issuer, (iii) take any
action that would cause Seller to possess, directly or indirectly, the power to
direct or cause the direction of the management and policies of the Issuer,
whether by ownership of voting securities, by contract or otherwise, or (iv)
take any other action that could reasonably be expected to result in Seller's
becoming an "affiliate", within the meaning of Rule 144 under the Securities
Act, of the Issuer. Seller shall not take any such action unless a period of
fifteen Business Days shall have elapsed after receipt of such notice by Buyer
and Buyer shall not have objected in writing to such action during such period.
SECTION 6.06. Securities Contract. The parties hereto recognize that
the Custodian is a "financial institution" within the meaning of Section 101(22)
of Title 11 of the United States Code (the "BANKRUPTCY CODE") and is acting as
agent and custodian for Buyer in connection with this Agreement and that Buyer
is a "customer" of the Custodian within the meaning of said Section 101(22). The
parties hereto further recognize that this Agreement is a "securities contract",
as such term is defined in Section 741(7) of the Bankruptcy Code, entitled to
the protection of, among other provisions, Sections 555 and 562(b)(6) of the
Bankruptcy Code, and that each payment or delivery of cash, shares of Common
Stock or other property or assets hereunder is a "settlement payment", within
the meaning of Section 741(8) of the Bankruptcy Code.
SECTION 6.07. Purpose. None of the payments made to Seller hereunder
will be used, directly or indirectly, for the purpose of purchasing or carrying
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"margin stock" (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System).
SECTION 6.08. Financial Covenants. Seller agrees that, without the
prior written consent of Buyer:
(a) Prior to the Final Contract Payment Date, Seller will not, and
will not permit any of its Consolidated Subsidiaries to, directly or indirectly,
create, assume or permit to exist any Lien on any asset now owned or hereafter
acquired by it, unless Seller secures or causes such Consolidated Subsidiary to
secure the Obligations equally and ratably with (or if the obligation to be
secured by such Lien is subordinated in right of payment to the Obligations,
prior to) the obligations secured by such Lien, for so long as the obligations
secured by such Lien are secured. This Section 6.08(a) shall not apply to (i)
Liens existing on the date hereof securing Debt outstanding on the date hereof,
(ii) any Lien arising out of the extension, renewal or replacement of any Debt
secured by any Lien permitted by clause (i) above, so long as the aggregate
principal amount of such Debt is not increased and is not secured by any
additional assets; (iii) Liens arising in the ordinary course of the business of
Seller or such Consolidated Subsidiary, as the case may be, that (A) do not
secure Debt, (B) do not secure any obligation in an amount exceeding $10 million
and (C) do not in the aggregate materially detract from the value of the assets
of Seller or such Consolidated Subsidiary, as the case may be, or materially
impair the use of such assets in the operation of the business of Seller or such
Consolidated Subsidiary, as the case may be, (iv) any Lien on any asset incurred
or assumed for the purpose of financing all or any part of the cost of acquiring
such asset (or, in the case of assets produced or developed for film or
television, producing or developing such asset), so long as such Lien attaches
to such asset concurrently with or within 90 days after the acquisition of (or,
if applicable, the production or development of) such asset and does not attach
to any other asset, (v) any Lien arising solely as a result of the filing of
financing statements for informational purposes only or (vi) any Lien on current
assets of Seller or any of its Consolidated Subsidiaries generated in the
ordinary course of the business of Seller or such Consolidated Subsidiary, as
the case may be, securing Debt in an aggregate principal amount not to exceed
$150 million.
(b) Prior to the Final Contract Payment Date, Seller will not permit
any of its Consolidated Subsidiaries to (i) directly or indirectly, create,
incur, issue, assume, Guarantee or otherwise become directly or indirectly
liable with respect to any Debt (other than Debt permitted by paragraphs (ii),
(iv) or (vi) of Section 6.08(a); provided that in each case, such Debt is
recourse only to the assets to which the Liens described in such clauses attach)
or (ii) issue any capital stock that, under such Consolidated Subsidiary's
certificate of incorporation, is entitled to a preference over the common stock
of such Consolidated Subsidiary as to
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payment of dividends or distributions; provided that Seller may permit any such
Consolidated Subsidiary (other than Guarantor) to create, incur, issue, assume,
Guarantee or become liable with respect to any such Debt or issue such capital
stock, so long as such Consolidated Subsidiary fully and unconditionally
guarantees the Obligations on substantially the terms set forth in Article 9,
and such guarantee ranks pari passu in right of payment with the most senior
Debt of such Consolidated Subsidiary.
(c) Prior to the Covenant Termination Date, notwithstanding Section
6.08(a), Guarantor will not create, assume or permit to exist any Lien on any
asset now owned or hereafter acquired by it.
(d) Prior to the Covenant Termination Date, Guarantor will not sell,
lease or otherwise transfer, directly or indirectly, any of its assets, other
than (i) sales of inventory in the ordinary course of its business, (ii)
dispositions of Temporary Cash Investments, (iii) the transfer or contribution
of the Opryland Hotel located in Nashville, Tennessee, to a Consolidated
Subsidiary of Seller (the "PERMITTED SUBSIDIARY TRANSFEREE") that (A) makes all
representations and warranties of and assumes all of the obligations of
Guarantor hereunder and (B) executes and delivers an Eligible Guarantee for the
benefit of Buyer, in each case concurrently with such transfer or contribution
(provided that either such Permitted Subsidiary Transferee or Seller issues
Eligible Notes concurrently with such transfer or contribution) or (iv) the
transfer of the Opryland Hotel located in Nashville, Tennessee to Seller, so
long as Seller (A) issues Eligible Notes and (B) executes an Eligible Mortgage,
in each case concurrently with such transfer.
SECTION 6.09. Certificate of Compliance. Within 30 days after the end
of each of the first three quarters of Seller's fiscal year and within 45 days
of the end of Seller's fiscal year, Seller shall furnish to Buyer a certificate,
signed by the Chief Financial Officer of Seller stating that (i) no Acceleration
Event has occurred and (ii) to the knowledge of such officer, no event has
occurred that with the giving of notice or the lapse of time, or both, would
constitute an Acceleration Event.
ARTICLE 7
ADJUSTMENTS
SECTION 7.01. Dilution Adjustments. (a) Following the declaration by
the Issuer of the terms of any Potential Adjustment Event occurring prior to the
Maturity Date, the Calculation Agent will determine whether such Potential
Adjustment Event has a diluting or concentrative effect on the theoretical value
of
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the Common Stock and, if so, will (i) make the corresponding adjustment, if any,
to any one or more of the Base Amount, the Exchange Rate, the Conversion Rate,
the Threshold Price, the Issue Price, the Maturity Price, the Cash Settlement
Amount, any Closing Price and any other variable relevant to the exercise,
settlement or payment terms hereof or of the Pledge Agreement as the Calculation
Agent determines appropriate to account for that diluting or concentrative
effect and (ii) determine the effective date of the adjustment. The Calculation
Agent may (but need not) determine the appropriate adjustment by reference to
the adjustment in respect of such Potential Adjustment Event made by an options
exchange to options on the Common Stock traded on that options exchange.
(b) For these purposes, "POTENTIAL ADJUSTMENT EVENT" means any of the
following:
(i) a subdivision, consolidation or reclassification of shares
of Common Stock or Preferred Stock (which does not constitute a
Reorganization Event), or a free distribution or dividend of any shares
of Common Stock or Preferred Stock to existing holders of Common
Stock or Preferred Stock by way of bonus, capitalization or similar
issue;
(ii) a distribution or dividend to existing holders of Common
Stock or Preferred Stock of (A) shares of Common Stock or Preferred
Stock, (B) other share capital or securities granting the right to
payment of dividends and/or the proceeds of liquidation of the Issuer
equally or proportionately with such payments to holders of Common
Stock or Preferred Stock or (C) other types of securities, rights or
warrants or other assets (other than an Ordinary Cash Dividend with
respect to the Common Stock or the Preferred Stock), in any case for
payment (cash or other) at less than the prevailing market price as
determined by the Calculation Agent;
(iii) an Extraordinary Cash Dividend with respect to the Common
Stock or the Preferred Stock;
(iv) a call by the Issuer in respect of shares of Common Stock or
Preferred Stock that are not fully paid;
(v) a repurchase by the Issuer of shares of Common Stock or
Preferred Stock, whether out of profits or capital and whether the
consideration for such repurchase is cash, securities or otherwise;
(vi) without duplication, any adjustment to the Conversion Rate
pursuant to the terms of the Preferred Stock; or
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(vii) any other similar event that may have a diluting or
concentrative effect on the theoretical value of the Common Stock or
the Preferred Stock (other than an Ordinary Cash Dividend with
respect to the Common Stock or the Preferred Stock).
(c) Notwithstanding the foregoing, in the event of a distribution of
shares of capital stock of a subsidiary of the Issuer that is a Publicly-Traded
Entity (a "SPIN-OFF") made to holders of shares of Common Stock, (i) the
"Contract Shares" shall include, in addition to the number of shares of Free
Stock equal to the Contract Share Amount, a number of shares of New Common Stock
equal to the product of (A) the Base Amount immediately prior to the
consummation of the Spin-Off and (B) the number of shares of New Common Stock
that a holder of one share of Original Common Stock would have owned or been
entitled to receive immediately following such Spin-Off and (ii) the "Maturity
Price" shall be equal to the sum of (A) the Maturity Price of the Original
Common Stock and (B) the product of (x) the Maturity Price of the New Common
Stock and (y) the number of shares of New Common Stock that a holder of one
share of Original Common Stock would have owned or been entitled to receive
immediately following such Spin-Off. Following a Spin-Off, "ORIGINAL COMMON
STOCK" shall mean the common stock of the entity that is the Issuer immediately
prior to the Spin-Off and "NEW COMMON STOCK" shall mean the common equity
securities of the Publicly-Traded Entity resulting from such Spin-Off.
SECTION 7.02. Reorganization Events. In the event of (i) any
consolidation or merger of the Issuer with or into another entity (other than a
merger or consolidation in which the Issuer is the continuing corporation and in
which the Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of the
Issuer or another corporation), (ii) any sale, transfer, lease or conveyance of
the property of the Issuer as an entirety or substantially as an entirety, (iii)
any statutory exchange of securities of the Issuer with another corporation
(other than in connection with a merger or acquisition) or (iv) any liquidation,
dissolution or winding up of the Issuer (any such event, a "REORGANIZATION
EVENT"), then (A) if there is a surviving or continuing corporation and such
surviving or continuing corporation is a Publicly-Traded Entity, "Base Amount"
shall mean the product of (x) the Base Amount immediately prior to the
consummation of the Reorganization Event and (y) the number of Marketable
Securities of the Publicly-Traded Entity that a holder of one share of Common
Stock would have owned or been entitled to receive immediately following such
Reorganization Event and, if the consideration received by holders of Common
Stock includes cash or property other than Marketable Securities ("NON-STOCK
CONSIDERATION"), Seller shall make a cash payment, by wire transfer of
immediately available funds
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to an account designated by Buyer, to Buyer on the date on which the
Reorganization Event is consummated (the "REORGANIZATION TERMINATION DATE") in
an amount equal to the Replacement Value (calculated in the manner set forth in
Section 8.01 as if the Reorganization Termination Date were the Acceleration
Date; provided that for purposes of such calculation, the Base Amount shall be
equal to the product of (I) the Base Amount immediately prior to consummation of
the Reorganization Event and (II) the percentage of the value of the
consideration received by holders of Common Stock represented by the Non- Stock
Consideration, as determined by the Calculation Agent) or (B) if there is no
surviving or continuing corporation in such Reorganization Event, if any
surviving or continuing corporation is not a Publicly-Traded Entity or if the
consideration received by holders of Common Stock consists solely of Non-Stock
Consideration, this Agreement shall terminate and Seller shall make a payment or
delivery to Buyer as provided in Section 7.04.
SECTION 7.03. Provisions Relating to Reorganization Events and
Spin-Offs. If a Reorganization Event occurs and clause (B) of Section 7.02 does
not apply, (a) the surviving or continuing corporation shall be deemed to be the
"Issuer", the Marketable Securities of such corporation received by holders of
Common Stock shall be deemed to be the "Common Stock" and any preferred or
common securities of such Corporation received by holders of Preferred Stock
shall be deemed to be the "Preferred Stock" until such securities are converted
into the Marketable Securities of such corporation received by holders of Common
Stock and (b) the Calculation Agent shall calculate corresponding adjustments,
if any, to the Base Amount, the Exchange Rate, the Conversion Rate, the
Threshold Price, the Issue Price, the Maturity Price, the Cash Settlement
Amount, any Closing Price and any other variable relevant to the exercise,
settlement or payment terms hereof as the Calculation Agent determines
appropriate to account for such event. If a Spin-Off occurs, the entity that is
the Issuer immediately prior to the Spin-Off and the Publicly-Traded Entity
resulting from the Spin-Off shall each be deemed to be the "Issuer" and the
Original Common Stock and the New Common Stock shall each be deemed to be the
"Common Stock". Following any Spin-Off, the Calculation Agent shall calculate
further adjustments pursuant to this Article 7 by applying the methodology set
forth in this Article 7 to both the Original Common Stock and the New Common
Stock.
SECTION 7.04. Termination and Payment. Following termination of this
Agreement pursuant to clause (B) of Section 7.02 as a result of any
Reorganization Event, the Calculation Agent shall determine the Replacement
Value in the manner provided in Section 8.01 (calculated, for purposes of this
Section 7.04, as if the Reorganization Termination Date were the Acceleration
Date and expressed as a cash amount, and representing the fair replacement value
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(including both intrinsic and time value) to Buyer of an agreement with terms
that would preserve for Buyer the economic equivalent of the payments and
deliveries that Buyer and its affiliates would, but for the occurrence of the
Reorganization Event, have been entitled to receive after the Reorganization
Termination Date hereunder). As promptly as reasonably practicable after
calculation of the Replacement Value, the Calculation Agent shall deliver to
Buyer and Seller a notice (the "TERMINATION AMOUNT NOTICE") specifying the
Replacement Value. Not later than three Business Days following delivery of a
Termination Amount Notice, Seller shall make a cash payment, by wire transfer of
immediately available funds to an account designated by Buyer, to Buyer in an
amount equal to the Replacement Value. Notwithstanding the foregoing, to the
extent that any Marketable Securities are received by holders of Common Stock in
such Reorganization Event, then in lieu of delivering cash as provided in the
immediately preceding sentence, Seller may deliver Marketable Securities with an
equal value (as determined by the Calculation Agent).
ARTICLE 8
ACCELERATION
SECTION 8.01. Acceleration. If one or more of the following events
(each an "ACCELERATION EVENT") shall occur:
(a) any legal proceeding shall have been instituted or any other event
shall have occurred or condition shall exist that in Buyer's reasonable judgment
could reasonably be expected to have a material adverse effect on the ability of
either Seller or Guarantor to perform its obligations hereunder, or that could
reasonably be expected to result in any agreement of either Seller or Guarantor
hereunder or, in the case of Seller, under the Pledge Agreement being invalid or
not binding;
(b) either Seller or Guarantor makes an assignment for the benefit of
creditors, files a petition in bankruptcy, is adjudicated insolvent or bankrupt,
petitions or applies to any tribunal for any receiver of or any trustee for it
or any substantial part of its property, commences any proceeding relating to it
under any reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect, or there is commenced against or with respect to it or any substantial
portion of its property any such proceeding and an order for relief is issued or
such proceeding remains undismissed for a period of 30 days;
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(c) at any time, any representation made or repeated or deemed to have
been made or repeated by Seller or Guarantor under this Agreement or, in the
case of Seller, the Pledge Agreement or any certificate delivered pursuant
hereto or thereto would be incorrect or misleading in any respect that is
material, in light of the transactions contemplated hereby and by the Pledge
Agreement taken as a whole, if made or repeated as of such time;
(d) Seller fails to deliver (i) shares of Common Stock (or the Cash
Settlement Amount) on the Maturity Date, (ii) the Replacement Value on any
Reorganization Termination Date, any Optional Termination Date or any Tax Event
Termination Date or (iii) any payment or delivery due on any postponed Required
Payment Date where the original Required Payment Date was the Maturity Date, a
Reorganization Termination Date or an Optional Termination Date, in any case, as
required by this Agreement;
(e) either Seller or Guarantor fails to fulfill or discharge when due
any of its obligations, covenants or agreements under or relating to this
Agreement or, in the case of Seller, the Pledge Agreement (other than the
obligations referred to in Sections 8.01(d), 8.01(f), and 8.01(k)) and such
failure remains unremedied for 60 days following notice from Buyer;
(f) either Seller or Guarantor fails to comply with, fulfill or
discharge when due any of its obligations, covenants or agreements under or
relating to Section 6.08;
(g) due to the adoption of, or any change in, any applicable law after
the date hereof, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after the date hereof, it becomes unlawful
for either Seller or Guarantor to perform any absolute or contingent obligation
to make payment or delivery hereunder or to comply with any other material
provision of this Agreement or, in the case of Seller, the Pledge Agreement;
(h) in the judgment of the Calculation Agent, Buyer (or any
counterparty to a transaction entered into by Buyer to hedge Buyer's exposure to
this Agreement, provided that such counterparty is an affiliate of CSFB) is
unable to hedge Buyer's (or such counterparty's) exposure to this Agreement
because of the lack of sufficient shares of Common Stock being made available
for share borrowing by lenders;
(i) there occurs a default under any indebtedness for money borrowed
by Seller or its Consolidated Subsidiaries (including Guarantor), whether such
indebtedness now exists or shall hereafter be created, which indebtedness,
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individually or in the aggregate, is in excess of $10,000,000 principal amount,
which default shall constitute a failure to pay any portion of the principal of
such indebtedness when due and payable after the expiration of any applicable
grace or cure period with respect thereto or shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable;
(j) a Collateral Event of Default within the meaning of the Pledge
Agreement shall occur; or
(k) Seller fails to deliver (i) any Contract Payment within five
Business Days of the Contract Payment Date on which such payment is due or (ii)
any payment due on any postponed Required Payment Date within five Business Days
of such postponed Required Payment Date, where the original Required Payment
Date was a Contract Payment Date;
then, upon notice to Seller from Buyer at any time following an Acceleration
Event, an "ACCELERATION DATE" shall occur, and Seller shall become obligated to
deliver to Buyer immediately upon receipt of the Acceleration Amount Notice a
number of shares of Free Stock equal to the Acceleration Amount; provided that
if Seller shall have elected to substitute Government Securities for Share
Collateral pursuant to Section 5(j) of the Pledge Agreement, Seller shall be
obligated to deliver an amount of cash equal to the Replacement Value on the
Acceleration Date in lieu of such shares; and provided further that if Secured
Party proceeds to realize upon any collateral pledged under the Pledge Agreement
and to apply the proceeds of such realization as provided in the second
paragraph of Section 7(d) thereof, then, to the extent of such application of
proceeds, Seller's obligation to deliver Free Stock pursuant to this paragraph
shall be deemed to be an obligation to deliver an amount of cash equal to the
aggregate Market Value of such Free Stock on the Acceleration Date. The
"ACCELERATION AMOUNT" means the Replacement Value, expressed as a number of
shares of Common Stock.
The "REPLACEMENT VALUE" means an amount determined by the Calculation
Agent representing the fair replacement value (which may be expressed by the
Calculation Agent as a cash amount or as a number of shares of Common Stock, and
which shall include both intrinsic and time value) to Buyer of an agreement with
terms that would preserve for Buyer the economic equivalent of the payments and
deliveries that Buyer and its affiliates would, but for the occurrence of the
Acceleration Date, have been entitled to receive after the Acceleration Date
hereunder (taking into account any adjustments pursuant to Section 7.01 or
pursuant to Section 5(i) of the Pledge Agreement that may have been calculated
on or prior to the Acceleration Date), including any loss of bargain, cost of
funding or, without duplication, loss or cost incurred as a result of
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the termination, liquidation, establishment or reestablishment of any hedge or
related trading position (whether such hedge or related trading position was
maintained by Buyer or by a counterparty to a transaction entered into by Buyer
to hedge Buyer's exposure to this Agreement) (or any gain resulting from any of
them). In determining the Replacement Value, the Calculation Agent shall refer
to pricing levels for the economic inputs to the transactions contemplated
hereby and by the Pledge Agreement provided by independent third party dealers.
As promptly as reasonably practicable after calculation of the
Replacement Value, the Calculation Agent shall deliver to Seller and Buyer a
notice (the "ACCELERATION AMOUNT NOTICE") specifying the Acceleration Amount of
shares of Common Stock required to be delivered by Seller.
ARTICLE 9
GUARANTEE
SECTION 9.01. Guarantee. (a) Commencing on the Closing Date, Guarantor
hereby absolutely, irrevocably and unconditionally guarantees the punctual
payment and performance when due of the obligations of Seller hereunder and
under the Pledge Agreement, each as may be further modified, amended or
supplemented from time to time (collectively, the "OBLIGATIONS"). Guarantor
agrees to pay on demand any and all fees, funding and other costs and expenses
(including reasonable attorneys' fees and expenses) incurred by Buyer in
connection with enforcing any rights or collecting any amounts or deliveries
hereunder or under the Pledge Agreement. Any amounts or deliveries that would be
owed or due by Seller to Buyer hereunder or under the Pledge Agreement but are
unenforceable or not allowable against Seller because Seller is the subject of a
bankruptcy, liquidation, reorganization or similar case or proceeding, shall
nonetheless be deemed owed or due for the purposes of this Article 9. Buyer
shall not be obligated to file any claim relating to the Obligations in the
event Seller becomes subject to a bankruptcy, liquidation, reorganization or
similar case or proceeding, and the failure by Buyer to so file shall not affect
Guarantor's obligations hereunder.
(b) Notwithstanding any provision in this Article 9 to the contrary,
Guarantor's obligations under this Article 9 shall be limited to a maximum of
$40 million.
(c) This Article 9 is a guarantee of payment and performance when due
and not of collection. Guarantor agrees that Buyer may resort to Guarantor for
payment or performance of any of the Obligations, whether or not Buyer shall
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have realized against or applied, or attempted to realize against or apply, any
property provided by an entity as collateral security or other credit support
for the Obligations (such property and credit support collectively, "SECURITY")
or proceeded or attempted to proceed against Seller or any other entity
principally or secondarily obligated with respect to the Obligations.
(d) Guarantor's obligations under this Article 9 shall continue to be
effective or be reinstated, as the case may be, if at any time any payment or
performance of any of the Obligations is rescinded or must otherwise be returned
by Buyer upon or as a result of the insolvency, bankruptcy, liquidation or
reorganization of Seller or otherwise, all as though such payment or performance
had not been made.
SECTION 9.02. Guarantee Absolute. Guarantor guarantees that the
Obligations will be performed strictly in accordance with the provisions of this
Agreement and the Pledge Agreement (and, to the extent applicable, this Article
9), regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such provisions or the rights of Buyer with
respect thereto. The liability of Guarantor under this Article 9 shall be
irrevocable, absolute and unconditional irrespective of, and Guarantor hereby
irrevocably waives, any defenses it may now or hereafter have (including any
defense based on the failure to provide notice to or obtain the consent of
Guarantor) in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of this Agreement or the
Pledge Agreement;
(b) the entry into additional transactions, any indulgence,
concession, waiver or consent given to Seller, or any other changes in the
amount of, time, manner or place of payment of, or in any other term of any or
all of the Obligations;
(c) any taking, exchange, release, non-perfection, realization or
application of or on any Security;
(d) any change, restructuring or termination in or of the structure or
existence of Seller; or
(e) any other circumstance (including, without limitation, any statute
of limitations) that might otherwise constitute a defense available to, or a
discharge of, Guarantor or Seller.
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SECTION 9.03. Waivers and Acknowledgments. (a) Guarantor hereby waives
promptness, diligence, demand for performance, notice of acceptance,
presentment, protest, non-performance, default, acceleration, early termination,
protest or dishonor, any other notice with respect to any of the Obligations and
this Article 9, and any requirement that Buyer protect, secure, perfect or
insure any Security or exhaust any right or take any action against Guarantor or
any other entity or any Security.
(b) Guarantor hereby waives any right to revoke this guarantee, and
acknowledges that its obligations under this Article 9 is continuing in nature
and applies to all Obligations, whether existing now or in the future.
(c) Guarantor hereby waives (i) any defense arising by reason of any
claim or defense based upon an election of remedies by Buyer that in any manner
impairs, reduces, releases or otherwise adversely affects Guarantor's
subrogation, reimbursement, exoneration, contribution or indemnification rights
or other rights to proceed against Seller, any other guarantor, any other entity
or any Security, and (ii) any defense based on any right of set-off or
counterclaim against or in respect of Guarantor's obligations under this Article
9.
SECTION 9.04. Subrogation. Guarantor will not exercise any rights that
it may now have or hereafter acquire against Seller or any other guarantor that
arise from the existence, payment, performance or enforcement of Guarantor's
obligations under this Article 9, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of Buyer against Seller, any other
guarantor or any Security, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without limitation,
the right to take or receive from Seller or any other guarantor, directly or
indirectly, in cash or other property, by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Obligations shall have been finally and irrevocably satisfied in
full. If any amount shall be paid to Guarantor in violation of the preceding
sentence at any time prior to the final and irrevocable payment or performance
in full of all of the Obligations, such amount shall be held in trust for the
benefit of Buyer and shall forthwith be paid to Buyer to be (at the election of
Buyer) credited and applied to the Obligations, whether matured or unmatured, in
accordance with the terms of this Agreement and the Pledge Agreement, and/or to
be held as collateral security for any Obligations thereafter arising.
SECTION 9.05. Termination. The obligations of Guarantor under this
Article 9 shall terminate on the earlier of (i) the Final Contract Payment Date
and
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(ii) the date on which a Subsequent Guarantor executes and delivers an Eligible
Guarantee for the benefit of Buyer.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard forms of telecommunication. Notices to Buyer shall
be directed to it care of Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, New York 10010, Telecopy No. (212) 325-8175, Attention:
Ricardo Harewood; notices to Seller shall be directed to Seller at One Gaylord
Drive, Nashville, Tennessee 37214, Telecopy No. (615) 316-6105, Attention: Chief
Financial Officer, with a copy to Sherrard & Roe, PLC, 424 Church Street, Suite
2000, Nashville, Tennessee 37219, Telecopy (615) 742-4539, Attention: Thomas J.
Sherrard, Esq; notices to Guarantor shall be directed to Guarantor, care of
Gaylord Entertainment Company, One Gaylord Drive, Nashville, Tennessee 37214,
Telecopy No. (615) 316-6105, Attention: Chief Financial Officer, with a copy to
Sherrard & Roe, PLC, 424 Church Street, Suite 2000, Nashville, Tennessee 37219,
Telecopy (615) 742-4539, Attention: Thomas J. Sherrard, Esq.
SECTION 10.02. Governing Law; Submission to Jurisdiction; Severability;
Waiver of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine and each party hereto submits to the jurisdiction of the Courts of
the State of New York and the United States District Court located in the
Borough of Manhattan in New York City and waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any suit, action or proceeding arising out of or in connection
with this Agreement in any such court or that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
(b) To the extent permitted by law, the unenforceability or invalidity
of any provision or provisions of this Agreement shall not render any other
provision or provisions herein contained unenforceable or invalid.
(c) SELLER, BUYER AND GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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(d) Service of Process. Buyer irrevocably appoints CT Corporation
System as process agent to receive for Buyer and on Buyer's behalf, service of
process in any action, suit or other proceeding arising out of this Agreement,
the Pledge Agreement or any transaction contemplated hereby or thereby. If for
any reason CT Corporation System is unable to act as such, Buyer will notify
Seller and Guarantor and within 30 days appoint a substitute process agent
acceptable to Seller and Guarantor. Each of Seller and Guarantor irrevocably
consents to service of process given in the manner provided for notices in
Section 10.01. Nothing in this Agreement will affect the right of either party
to serve process in any other manner permitted by law.
SECTION 10.03. Entire Agreement; Other. (a) Except as expressly set
forth herein, this Agreement constitutes the entire agreement and understanding
among the parties with respect to the subject matter hereof and supersedes all
oral communications and prior writings with respect thereto. On and after the
Closing Date, there will be no obligations of the parties with respect to the
subject matter of this Agreement and the Pledge Agreement, other than as
expressly set forth herein and in the Pledge Agreement.
(b) The parties hereby agree that (i) neither Seller nor Guarantor is
obligated to keep confidential or otherwise limit the use of any element of any
description contained in this Agreement or the Pledge Agreement that is
necessary to understand or support any United States federal income tax
treatment and (ii) Buyer does not assert any claim of proprietary ownership in
respect of any description contained herein or therein relating to the use of
any entities, plans or arrangements to give rise to a particular United States
federal income tax treatment for Seller or Guarantor.
SECTION 10.04. Amendments, Waivers. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyer, Seller and Guarantor or, in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.05. No Third Party Rights, Successors and Assigns. This
Agreement is not intended and shall not be construed to create any rights in any
person other than Seller, Buyer, Guarantor and their respective successors and
assigns and no other person shall assert any rights as third party beneficiary
hereunder. Whenever any of the parties hereto is referred to, such reference
shall
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be deemed to include the successors and assigns of such party. All the covenants
and agreements herein contained by or on behalf of Seller, Buyer and Guarantor
shall bind, and inure to the benefit of, their respective successors and assigns
whether so expressed or not, and shall be enforceable by and inure to the
benefit of Buyer and its successors and assigns. The rights and duties under
this Agreement may not be assigned or transferred by any party hereto without
the prior written consent of the other parties hereto; provided that (i) Buyer
may assign or transfer any of its rights or duties hereunder with the prior
written consent of Seller and Guarantor (which consent may not be unreasonably
withheld) and (ii) the Agent may assign or transfer any of its rights or duties
hereunder without the prior written consent of the other parties hereto to any
affiliate of CSFB, so long as such affiliate is a broker-dealer registered with
the Securities and Exchange Commission. If Buyer or Agent assigns or transfers
any of its rights or duties hereunder, (A) Buyer or Agent, as the case may be,
shall deliver to Seller a written notice of such assignment or transfer within
30 days of such assignment or transfer (but in no event shall such notice be
given fewer than three Business Days prior to the Required Payment Date
immediately following the date of such assignment or transfer), which notice
shall specify the name and address of the assignee or transferee of such rights
or duties and (B) as required by Treasury Regulation 1.871-14(c), a record of
such transfer shall be made upon books maintained for such purpose by Seller.
Any such transferee or assignee shall deliver to Seller at least three Business
Days prior to such Required Payment Date a properly completed Internal Revenue
Service Form W-8BEN (or successor or similar form) and (ii) a written statement
that this Agreement does not represent in whole or in part an extension of
credit pursuant to a loan agreement entered into by Buyer as a bank in the
ordinary course of its banking business.
SECTION 10.06. Calculation Agent. The determinations and calculations
of the Calculation Agent shall be made in good faith and in a commercially
reasonable manner and shall be binding in the absence of manifest error. The
Calculation Agent will have no responsibility for good faith errors or omissions
in the determination of any Closing Price, the Maturity Price, the Exchange
Rate, the Cash Settlement Amount or any other amount as provided herein.
SECTION 10.07. Netting and Set-off. (a) If on any date, cash would
otherwise be payable or shares of Common Stock or other property would otherwise
be deliverable (including, for the avoidance of doubt, the replacement, as
required by Section 5(i) of the Pledge Agreement, of shares of Common Stock that
have been rehypothecated pursuant to such Section) pursuant to this Agreement or
the Pledge Agreement by Buyer to Seller and by Seller to Buyer and the type of
property required to be paid or delivered by each such party on such date is the
same, then, on such date, each such party's obligation to make such payment or
delivery will be automatically satisfied and discharged and, if the
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aggregate amount that would otherwise have been payable or deliverable by one
such party exceeds the aggregate amount that would otherwise have been payable
or deliverable by the other such party, replaced by an obligation upon the party
by whom the larger aggregate amount would have been payable or deliverable to
pay or deliver to the other party the excess of the larger aggregate amount over
the smaller aggregate amount.
(b) In addition to and without limiting any rights of set-off that a
party hereto may have as a matter of law, pursuant to contract or otherwise,
upon the occurrence of a Reorganization Termination Date to which clause (B) of
the Section 7.02 applies, a Tax Event Termination Date or an Acceleration Date,
Buyer shall have the right to terminate, liquidate and otherwise close out the
transactions contemplated by this Agreement pursuant to the terms of this
Agreement, and to set off any obligation that Buyer may have to Seller or
Guarantor, including without limitation any obligation to make any release,
delivery or payment to Seller pursuant to Section 5(i) or Section 9 of the
Pledge Agreement, against any right Buyer may have against Seller or Guarantor
under this Agreement or the Pledge Agreement, including without limitation any
right to receive a payment or delivery pursuant to Section 2.03(b), Section
2.04, Section 3.01, Section 6.01(b)(iv), Section 7.02, Section 7.04 or Section
8.01 or any other provision of this Agreement. In the case of a set-off of any
obligation to release, deliver or pay assets against any right to receive assets
of the same type, such obligation and right shall be set off in kind. In the
case of a set-off of any obligation to release, deliver or pay assets against
any right to receive assets of any other type, the value of each of such
obligation and such right shall be determined by the Calculation Agent and the
result of such set-off shall be that the net obligor shall pay or deliver to the
other party an amount of cash or assets, at the net obligor's option, with a
value (determined, in the case of a delivery of assets, by the Calculation
Agent) equal to that of the net obligation. In determining the value of any
obligation to release or deliver Common Stock or right to receive Common Stock,
the value at any time of such obligation or right shall be determined by
reference to the market value of the Common Stock at such time. If an obligation
or right is unascertained at the time of any such set-off, the Calculation Agent
may estimate the amount or value of such obligation or right, in which case
set-off will be effected in respect of that estimate, and the relevant party
shall account to the other party at the time such obligation or right is
ascertained.
SECTION 10.08. Matters Related to Credit Suisse First Boston
Corporation, as Agent. (a) Credit Suisse First Boston Corporation shall act as
"agent" for Buyer, Seller and Guarantor within the meaning of Rule 15a-6 under
the Securities Exchange Act of 1934 in connection with the transactions
contemplated by this Agreement and by the Pledge Agreement.
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(b) The Agent shall have no responsibility or liability (including,
without limitation, by way of guarantee, endorsement or otherwise) to Buyer,
Seller or Guarantor or otherwise in respect of this Agreement or the Pledge
Agreement, including, without limitation, in respect of the failure of Buyer,
Seller or Guarantor to pay or perform under this Agreement or the Pledge
Agreement, except for its gross negligence or willful misconduct in performing
its duties as Agent hereunder or thereunder.
(c) Each of Buyer, Seller and Guarantor agrees to proceed solely
against the other to collect or recover any securities or money owing to Buyer,
Seller or Guarantor, as the case may be, in connection with or as a result of
this Agreement or the Pledge Agreement.
(d) As a broker-dealer registered with the Securities and Exchange
Commission, Credit Suisse First Boston Corporation, in its capacity as Agent,
will be responsible for (i) effecting the transactions contemplated by this
Agreement and the Pledge Agreement, (ii) issuing all required notices,
confirmations and statements to Buyer, Seller and Guarantor and (iii)
maintaining books and records relating to this Agreement and the Pledge
Agreement.
SECTION 10.09. Counterparts. This Agreement may be executed in any
number of counterparts, and all such counterparts taken together shall be deemed
to constitute one and the same agreement.
SECTION 10.10. Limited Recourse. Each of Seller and Guarantor hereby
agrees that it shall not institute against, or join any other person in
instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings. Each of Seller and Guarantor
hereby acknowledges and agrees that Buyer's obligations under this Agreement
will be solely the corporate obligations of Buyer or any assignee or transferee
of Buyer pursuant to Section 10.05, and that neither Seller nor Guarantor will
have any recourse to any of the directors, officers or employees of Buyer with
respect to any claims, losses, damages, liabilities, indemnities or other
obligations in connection with any transactions contemplated by this Agreement,
other than in respect of any fraud or willful default on the part of such
directors, officers or employees. Recourse in respect of any obligations of
Buyer under this Agreement will be limited to the assets of Buyer (excluding for
these purposes $2,000.00 in cash) and no debt shall be owed by Buyer in respect
of any shortfall after realization of such assets.
SECTION 10.11. Payment Date Other than a Business Day. If any payment
is due on a date that is not a Business Day, such payment may be made
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on the immediately succeeding Business Day with the same force and effect as if
made on such date, and no interest will accrue for the intervening period.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
SELLER:
GAYLORD ENTERTAINMENT COMPANY
By: /s/ Denise Wilder Warren
----------------------------------------
Name: Denise Wilder Warren
Title: Chief Financial Officer
GUARANTOR:
OLH G.P.
By: Opryland Hospitality, Inc.,
a General Partner
By: /s/ Rod Connor
----------------------------------------
Name: Rod Connor
Title: Vice President
By: Gaylord Entertainment Company,
a General Partner
By: /s/ Carl Kornmeyer
----------------------------------------
Name: Carl Kornmeyer
Title: Executive Vice President of
Corporate and Operational
Development
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BUYER:
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
By: /s/ Steven Wootten
-------------------------------------
Name: Steven Wootten
Title: Attorney-In-Fact
By: /s/ Paul Mann
-------------------------------------
Name: Paul Mann
Title: Vice President - Legal and
Compliance Department
AGENT:
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Carmen Marino
-------------------------------------
Name: Carmen Marino
Title: Managing Director
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