EXHIBIT 10(a)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of September 8,
2000, between Bank of America, N.A., a national banking association, as Share
Seller ("SHARE SELLER"), MBG Trust, a Delaware business trust (the "TRUST") and
Mandalay Resort Group, a Nevada corporation ("SHARE PURCHASER").
W I T N E S S E T H:
WHEREAS, Share Purchaser has agreed to purchase, and Share Seller has
agreed to sell, pursuant to the terms of this Agreement, a certain number of
shares of the common stock, par value 1 2/3 cents per share, of Share Purchaser
(the "SHARES"), on the terms and conditions set forth herein;
WHEREAS, the Trust has agreed to enter into the Collateral Agreement (the
"COLLATERAL AGREEMENT") dated as of the date hereof, between Share Seller, Share
Purchaser, the Trust and Banc of America Securities LLC, a wholly owned
subsidiary of Bank of America Corporation, as collateral agent (together with
its successors and permitted assigns, the "COLLATERAL AGENT"), to secure the
obligations of Share Seller and Share Purchaser under this Agreement; and
WHEREAS, pursuant to the Collateral Agreement, the Trust has agreed to
purchase the Shares on behalf of Share Seller and deliver such Shares to the
Collateral Agent pursuant to the terms of the Collateral Agreement.
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:
Article I
DEFINITIONS
Section 1.1 DEFINITIONS. The following terms shall have the indicated
meanings:
"AFFILIATE" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE FORWARD AMOUNT" means, on any date of determination, the sum of
the Daily Aggregate Forward Amounts for each Initial Period Date occurring on
or prior to such date of determination, as such sum may be reduced from time to
time by Optional Prepayments or Mandatory Prepayments pursuant to Article II
hereof or in connection with Extraordinary Dividends pursuant to Section 7.8(b).
"APPLICABLE SPREAD" means (i) in the case of Share Purchaser, the Spread
and (ii) in the case of Share Seller, 100 basis points per annum.
"AVAILABLE SHARES SHORTFALL" means, as of any date while the Transaction is
outstanding, (A) the number of authorized Shares MINUS (B) (i) the number of
outstanding Shares, (ii) the number of Shares reserved for other purposes and
(iii) without duplication of subclause (ii), the aggregate maximum number of
Shares issuable by Share Purchaser under other securities, instruments and
transactions which are issued by Share Purchaser or to which Share Purchaser is
a party is less than 125% of the Maximum Deliverable Shares.
"BANKRUPTCY CODE" has the meaning set forth in Section 6.6(a).
"BUSINESS DAY" means any day on which commercial banks are open for
business in New York, New York, other than a Saturday or Sunday.
"CALCULATION AGENT" has the meaning set forth in Section 9.13.
"CLOSING DATE" means September 8, 2000.
"CLOSING PRICE" means, for any determination date, the closing price per
Share on the Exchange on such date as reported by such recognized source as the
Calculation Agent deems reliable; PROVIDED that, if no such closing price is
reported on such date, the price of a Share shall be estimated in good faith by
the Calculation Agent.
"COLLATERAL" has the meaning set forth in the Collateral Agreement.
"COLLATERAL AGENT" has the meaning set forth in the second Whereas clause
on page 1.
"COLLATERAL AGREEMENT" has the meaning set forth in the second Whereas
clause on page 1.
"COLLATERAL SHARES" has the meaning set forth in the Collateral Agreement.
"DAILY AGGREGATE FORWARD AMOUNT" means, for any Initial Period Date, the
aggregate purchase price of Shares (excluding the Purchase Commission) purchased
on such date, if any, by or on behalf of Share Seller pursuant to Section 2.2.
"DEFAULTING PARTY" has the meaning set forth in Section 8.2.
"ELECTION DATE" has the meaning set forth in Section 3.1(a).
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"EVENT OF DEFAULT" has the meaning set forth in Section 8.1.
"EXCHANGE" means the New York Stock Exchange or any successor thereto;
PROVIDED that if such exchange ceases to list the Shares, the parties will
negotiate in good faith to agree on another Exchange for the Shares.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE BUSINESS DAY" means any day that is a trading day on the
Exchange.
"EXTRAORDINARY DIVIDEND" has the meaning set forth in Section 7.8(b).
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including any foreign, federal, state or other court or governmental agency,
authority, instrumentality or regulatory body.
"ILLEGALITY" means that due to the adoption of, or any change in, any
applicable law, treaty, rule or regulation after the date hereof, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal or
regulatory authority or other Governmental Authority with competent jurisdiction
of any applicable law, treaty, rule or regulation after the date hereof, it
becomes unlawful for Share Seller or the Trust 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 the Collateral Agreement.
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.7.
"INITIAL INTEREST COST" means, for each Daily Aggregate Forward Amount, an
amount equal to (i) for the period from and including the related Initial Period
Settlement Date to and including the last calendar day in the calendar month in
which such Initial Period Settlement Date occurs, the product of (w) such Daily
Aggregate Forward Amount, (x) the applicable Initial LIBOR Rate PLUS the Spread,
(y) the actual number of days elapsed in such period and (z) 1/360, and (ii) for
each calendar month thereafter up to and including the calendar month in which
the Trade Date occurs, the product of (w) such Daily Aggregate Forward Amount,
(x) LIBOR with a maturity of one month PLUS the Spread, (y) the actual number of
days elapsed in such calendar month and (z) 1/360.
"INITIAL LIBOR RATE" means, with respect to a Daily Aggregate Forward
Amount, for the period from and including the related Initial Period Settlement
Date to and including the last calendar day in the calendar month in which such
Initial Period Settlement Date occurs, a per annum rate equal to (i) if such
period is equal to or less than one week, Initial One-Week LIBOR or (ii)
otherwise, a rate calculated by
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interpolating linearly in accordance with market practice (and rounding to the
nearest hundred-thousandth of a percentage point) between Initial One-Week LIBOR
and Initial One-Month LIBOR on the basis of the number of days in such period.
"INITIAL ONE-MONTH LIBOR" means 6.62000% per annum; PROVIDED that if the
applicable Initial Period Settlement Date occurs in a calendar month following
the calendar month in which the Closing Date occurs, Initial One-Month LIBOR
shall equal LIBOR with a maturity of one month and with an Interest Reset Date
of the second London Banking Day prior to the start of the calendar month in
which such Initial Period Settlement Date occurs.
"INITIAL ONE-WEEK LIBOR" means 6.58375% per annum; PROVIDED that if the
applicable Initial Period Settlement Date occurs in a calendar month following
the calendar month in which the Closing Date occurs, Initial One-Week LIBOR
shall equal LIBOR with a maturity of one week and with an Interest Reset Date of
the second London Banking Day prior to the start of the calendar month in which
such Initial Period Settlement Date occurs.
"INITIAL PAYMENT DATES" has the meaning set forth in Section 2.3(a).
"INITIAL PERIOD" means the period commencing on and including the Closing
Date and ending on and including the Trade Date.
"INITIAL PERIOD DATE" means each Exchange Business Day in the Initial
Period.
"INITIAL PERIOD SETTLEMENT DATE" means, for any Initial Period Date on
which a Daily Aggregate Forward Amount is accumulated, the third Exchange
Business Day following such date.
"INITIAL SHARE PRICE" means the weighted average price at which the Initial
Shares are purchased by or on behalf of Share Seller during the Initial Period
pursuant to Section 2.2.
"INITIAL SHARES" means all Shares purchased by or on behalf of Share Seller
during the Initial Period (or, as appropriate, during any portion thereof)
pursuant to Section 2.2.
"INITIAL SPREAD" has the meaning set forth in the definition of Spread,
below.
"INTEREST ACCRUAL PERIOD" means (i) the three-month period commencing with
and including the month following the month in which the Trade Date occurs and
(ii) each consecutive three-month period thereafter; PROVIDED that the final
Interest Accrual Period shall end on the Settlement Date relating to the
Maturity Date.
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"INTEREST COST" means, for any Interest Accrual Period, the product of (i)
LIBOR for such period PLUS the Spread, (ii) the Aggregate Forward Amount as of
the end of such period, (iii) the actual number of days elapsed in such Interest
Accrual Period and (iv) 1/360.
"INTEREST MAKE-WHOLE SHARES" has the meaning set forth in Section 2.3(c).
"INTEREST PAYMENT DATE" means the last Business Day of each Interest
Accrual Period other than the final Interest Accrual Period.
"INTEREST RESET DATE" means, for any interest period, two London Banking
Days prior to the start of such period.
"INTEREST SETTLEMENT BALANCE" has the meaning set forth in Section 2.3(c).
"INTEREST SETTLEMENT SHARES" has the meaning set forth in Section 2.3(c).
"INTERIM SETTLEMENT REFERENCE DATE" means a date on which the calculations
set forth in Section 2.5(a) or (b) are required to be made.
"INTERPOLATED LIBOR RATE" means, for any period, (i) if such period is one
week or less, LIBOR with a maturity of one week and with an Interest Reset Date
of the second London Banking Day prior to the start of such period and (ii)
otherwise, LIBOR with a maturity of such period; PROVIDED that if LIBOR for such
maturity does not appear on Telerate Page 3750, such rate will be determined by
the Calculation Agent by interpolating linearly in accordance with market
practice (and rounding to the nearest hundred-thousandth of a percentage point)
between LIBOR for the nearest shorter and nearest longer maturities which appear
on such page, in each case with an Interest Reset Date of the second London
Banking Day prior to the start of such period, based on the number of days in
such period.
"ISSUER" means Mandalay Resort Group or any successor thereto.
"LIBOR" means, for purposes of any interest period, the rate for deposits
in United States dollars for the relevant maturity which appears on the Telerate
Page 3750 as of 11:00 a.m., London time, on the applicable Interest Reset Date.
Except as otherwise provided herein, the relevant maturity shall be three
months. If such rate does not appear on the Telerate Page 3750, the rate will be
determined on the basis of the rates at which deposits in United States dollars
are offered by four major banks in the London interbank market (the "REFERENCE
BANKS") at approximately 11:00 a.m., London time, on the applicable Interest
Reset Date to prime banks in the London interbank market for the relevant
maturity commencing at the start of the applicable interest period and in an
amount that is representative for a single transaction in the London interbank
market at that time (the "REPRESENTATIVE AMOUNT"). The Calculation Agent will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that interest period will be the
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arithmetic mean of the quotations (rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point). If fewer than two quotations are
provided as requested, the rate for that interest period will be the arithmetic
mean (rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point) of the rates quoted by major banks in New York City, selected
by the Calculation Agent, at approximately 11:00 a.m., New York City time, on
the applicable Interest Reset Date for loans in United States dollars to leading
European banks for the relevant maturity commencing at the start of the
applicable interest period and in a Representative Amount. If fewer than two
such quotations are provided by such banks in New York City, the rate for that
interest period will be determined by the Calculation Agent in a commercially
reasonable manner.
"LIEN" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.
"LONDON BANKING DAY" means any day on which commercial banks are open for
business in London, England, other than a Saturday or a Sunday.
"MAKE-WHOLE SHARES" has the meaning set forth in Section 3.4(b).
"MANDATORY PREPAYMENT" has the meaning set forth in Section 2.4(b).
"MANDATORY PREPAYMENT AMOUNT" has the meaning set forth in Section 2.4(b).
"MANDATORY PREPAYMENT DATE" has the meaning set forth in Section 2.4(b).
"MANDATORY PREPAYMENT EVENT" means the occurrence of one or more of the
following: (i) an Illegality; (ii) the sum (the "MANDATORY PREPAYMENT SHARE
NUMBER") of (A) Number of Shares PLUS (B) the number of Purchaser Interim
Settlement Shares that Share Purchaser would be required to deliver to Share
Seller if the date of determination were an Interim Settlement Reference Date
equals or exceeds 9.0% of the total number of outstanding Shares of the Issuer;
(iii) the number of Purchaser Interim Settlement Shares Share Purchaser would be
required to deliver to Share Seller if the date of determination were an Interim
Settlement Reference Date equals or exceeds 75% of the Maximum Deliverable
Shares; (iv) an Available Shares Shortfall; or (v) pursuant to an order or
directive of any applicable gaming regulatory authority, Share Seller, the Trust
or the Collateral Agent is no longer permitted to hold Shares.
"MANDATORY PREPAYMENT SHARE NUMBER" has the meaning set forth in the
definition of Mandatory Prepayment Event, above.
"MATURITY DATE" means the date that is one year following the Trade Date
(or if such date is not an Exchange Business Day, the next following Exchange
Business Day).
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"MATURITY INTEREST COST" has the meaning set forth in Section 2.3(b)(ii).
"MAXIMUM DELIVERABLE SHARES" means, as of any date of determination, ten
million Shares (subject to adjustment pursuant to Article VII hereof) MINUS the
number of Shares delivered by Share Purchaser to or as directed by Share Seller
on or prior to such date hereunder (adjusted to reflect any Shares delivered by
or on behalf of Share Seller to Share Purchaser hereunder), as such amount may
be increased from time to time pursuant to Section 7.10.
"MAXIMUM INITIAL AMOUNT" means $100 million.
"MAXIMUM INITIAL SHARES" means, as of any date in the Initial Period, 7.0%
of the total number of outstanding Shares of the Issuer as of such date.
"MERGER DATE" means, in respect of any Merger Event, the date upon which
holders of Shares (other than, in the case of a takeover offer, Shares owned or
controlled by the offeror) have agreed or have irrevocably become obligated to
transfer their Shares.
"MERGER EVENT" means, with respect to the Shares, any (i) reclassification
or change of such Shares that results in a transfer of or an irrevocable
commitment to transfer all of such Shares outstanding, (ii) consolidation,
amalgamation or merger of the Issuer with or into another entity (other than a
consolidation, amalgamation or merger in which the Issuer is the continuing
entity and which does not result in any such reclassification or change of all
of such Shares outstanding) or (iii) other takeover offer for such Shares that
results in a transfer of or an irrevocable commitment to transfer all such
Shares (other than such Shares owned or controlled by the offeror).
"MONTHLY COMMISSION COST" has the meaning set forth in Section 2.3(a).
"MOODY'S" means Xxxxx'x Investors Service, Inc., or its successor.
"NET SALE AMOUNT" means, for any sale of Shares pursuant to Section 2.3(c),
3.3 or 3.4 on any date, the applicable Sale Amount for such date MINUS the
applicable Sale Commission.
"NET CASH SETTLEMENT BALANCE" has the meaning set forth in Section 3.3.
"NET SHARE SETTLEMENT BALANCE" has the meaning set forth in Section 3.4(a).
"NEW SHARES" has the meaning set forth in Section 7.2.
"NON-DEFAULTING PARTY" has the meaning set forth in Section 8.2.
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"NUMBER OF SHARES" means, as of any date of determination, (i) the number
of Initial Shares PLUS (ii) the number of Purchaser Interim Settlement Shares
delivered on or prior to such date MINUS (iii) the number of Seller Interim
Settlement Shares delivered on or prior to such date MINUS (iv) the number of
Prepayment Shares in connection with Optional Prepayments or Mandatory
Prepayments occurring on or prior to such date.
"OPTIONAL PREPAYMENT" has the meaning set forth in Section 2.4(a).
"OPTIONAL PREPAYMENT AMOUNT" has the meaning set forth in Section 2.4(a).
"OPTIONAL PREPAYMENT DATE" has the meaning set forth in Section 2.4(a).
"OTHER CONSIDERATION" has the meaning set forth in Section 7.3.
"PERSON" means an individual, a corporation, a partnership, an association,
a limited liability company, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PREPAYMENT AMOUNT" has the meaning set forth in Section 2.4(c).
"PREPAYMENT DATE" means an Optional Prepayment Date or a Mandatory
Prepayment Date, as the case may be.
"PREPAYMENT SHARES" has the meaning set forth in Section 3.1(b).
"PRINCIPAL PAYMENT DATE" means any Optional Prepayment Date, any Mandatory
Prepayment Date or the Maturity Date, as the case may be.
"PROCEEDINGS" has the meaning set forth in Section 9.5(c).
"PROSPECTUS" has the meaning set forth in Section 3.6(a).
"PURCHASE COMMISSION" means $0.04 per Share.
"PURCHASE SUSPENSION" has the meaning set forth in Section 2.2(b).
"PURCHASER INTERIM SETTLEMENT SHARES" has the meaning set forth in Section
2.5(b).
"REFERENCE BANKS" have the meaning set forth in the definition of LIBOR,
above.
"REFERENCE PRICE" means, for any date of determination, (i) the weighted
average daily price of the shares on the Exchange as reported by Bloomberg, L.P.
("BLOOMBERG") by reference to the trade summary matrix on screen
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"MBG_UN(EQUITY)_AQR" after 4:00 p.m. New York time on such date or (ii) (A) if
such price is not so reported by Bloomberg, then as reported by such other
recognized source selected by the Calculation Agent on such date or (B) if the
Shares cease to be listed or traded on a national securities exchange or
included in a quotation system, then the price as determined by the Calculation
Agent in a commercially reasonable manner.
"REGISTRATION CONDITIONS" has the meaning set forth in Section 3.6(a).
"REGISTRATION FAILURE DATE" has the meaning set forth in Section 3.6(b).
"REGISTRATION STATEMENT" has the meaning set forth in Section 3.6(a).
"REPRESENTATIVE AMOUNT" has the meaning set forth in the definition of
LIBOR, above.
"REPRICING" has the meaning set forth in Section 7.9.
"REQUIREMENT OF LAW" means (a) the organizational documents of a Person,
(b) any law, treaty, rule or regulation or determination of an arbitrator, court
or other Governmental Authority or any internal policy reasonably implementing
such or (c) any franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval binding on a Person or
any of its property.
"RESTRICTED SUBSIDIARY" means, as of any date of determination, any
subsidiary of Share Purchaser (i) at least 80% of the capital stock or other
ownership interests of which are owned on such date, directly or indirectly, by
Share Purchaser and (ii) with respect to which neither Share Purchaser nor any
of its Restricted Subsidiaries has entered any shareholders' agreement,
management agreement or other agreement which has the effect of delegating
management control over such subsidiary to a Person other than Share Purchaser
or a Restricted Subsidiary.
"SALE AMOUNT" means, for any sale of Shares pursuant to Sections 2.3(c),
3.3 or 3.4 of this Agreement on any date, (i) if such sale is pursuant to a
Registration Statement in accordance with Section 3.6, the number of Shares so
sold on such date MULTIPLIED BY the Reference Price for such date, or (ii) if
such sale is on a private placement basis (or on another basis not involving a
sale pursuant to a Registration Statement) as provided in Section 3.6, the
aggregate proceeds received in respect of such sale.
"SALE COMMISSION" means, for any sale of Shares pursuant to Sections
2.3(c), 3.3 or 3.4 of this Agreement, 2% multiplied by the applicable Sale
Amount.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER INTERIM SETTLEMENT SHARES" has the meaning set forth in Section
2.5(a).
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"SETTLEMENT BALANCE" means a Net Cash Settlement Balance or a Net Share
Settlement Balance, as the case may be.
"SETTLEMENT DATE" means, for any Principal Payment Date, the third Exchange
Business Day following such Principal Payment Date.
"SETTLEMENT INTEREST COST" means, for any Settlement Interest Period with
respect to a Principal Payment Date, (i) the product of (w) the Settlement
Balance with respect to such Principal Payment Date as of the close of business
on the last day of such period, (x) LIBOR with a maturity of one month PLUS the
Spread, (y) the actual number of days elapsed in such period and (z) 1/360 PLUS
(ii) the sum of, for each day in such Settlement Interest Period on which the
Settlement Balance is reduced, the product of (w) the amount of such reduction,
(x) the number of days from and including the start of such period to but
excluding the date of such reduction, (y) LIBOR with a maturity of one month
PLUS the Spread and (z) 1/360.
"SETTLEMENT INTEREST PAYMENT DATE" means the first Business Day following
the end of each Settlement Interest Period.
"SETTLEMENT INTEREST PERIOD" means, with respect to a Principal Payment
Date, (i) the period from and including the related Settlement Date to but
excluding the one-month anniversary thereof and (ii) each consecutive one-month
period thereafter, beginning on and including a monthly anniversary of the
related Settlement Date and ending on but excluding the next succeeding monthly
anniversary; PROVIDED that the final Settlement Interest Period with respect to
such Principal Payment Date shall end on and include the Business Day following
the date the Settlement Balance for such Principal Payment Date is reduced to
zero.
"SETTLEMENT SHARES" means, as of any date of determination following a
Settlement Date, Shares of a number equal to the Number of Shares PLUS any
Make-Whole Shares delivered in connection with such Settlement Date.
"SHARE PURCHASER" has the meaning set forth in the initial paragraph of
this Agreement.
"SHARES" has the meaning set forth in the first Whereas clause on page 1.
"SHARE SELLER" has the meaning set forth in the initial paragraph of this
Agreement.
"SIGNIFICANT SUBSIDIARY" means, as of any date of determination, each
Restricted Subsidiary that had on the last day of any fiscal quarter then most
recently ended total assets (determined in accordance with generally accepted
accounting principles) of at least $10,000,000.
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"SPREAD" means 150 basis points per annum (the "INITIAL SPREAD"), as such
rate may be adjusted from time to time pursuant to Section 7.9; PROVIDED that if
an Event of Default with respect to Share Purchaser has occurred and is
continuing, the otherwise-prevailing spread (as so adjusted) shall be increased
by 100 basis points per annum.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc., or its successor.
"TAX INQUIRY" has the meaning set forth in Section 6.1(b).
"TRADE DATE" has the meaning specified in Section 2.2(d).
"TRANSACTION" has the meaning set forth in Section 6.1(a).
"TRANSACTION DOCUMENTS" means this Agreement and the Collateral Agreement.
"TRANSFER AGREEMENT" has the meaning set forth in Section 3.6(a).
"TRUST" has the meaning set forth in the initial paragraph of this
Agreement.
Section 1.2 RULES OF CONSTRUCTION. Definitions contained herein apply
equally to both the singular and plural forms of the defined terms. The words
"include" and "including" shall be deemed to be followed by the phrase "without
limitation." The terms "herein," "hereof" and "hereunder" and other words of
similar import appearing in this Agreement refer to this Agreement as a whole
and not to any particular Section, paragraph or subdivision. The Section titles
in this Agreement appear as a matter of convenience only and shall not affect
the interpretation of this Agreement.
ARTICLE II
SALE, PURCHASE, INTEREST AND COMMISSION
PAYMENTS, PREPAYMENTS AND INTERIM SETTLEMENTS
Section 2.1 SALE AND PURCHASE. Upon the terms and subject to the
conditions of this Agreement, Share Seller agrees to sell to Share Purchaser,
and Share Purchaser agrees to purchase and acquire from Share Seller, Shares
in an amount equal to the Number of Shares.
Section 2.2 PURCHASE OF SHARES. (a) During the Initial Period, Share
Seller shall, subject to subsection (b) below, use reasonable efforts to
purchase or cause the purchase of a number of Shares with an Aggregate
Forward Amount as close as practicable to (taking into account any Purchase
Suspensions), but in no event greater than, the Maximum Initial Amount in
such manner, at such prices and at such times as Share Seller, in its sole
discretion, shall determine. Notwithstanding anything to the
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contrary herein, Share Seller shall not be required to so purchase or cause the
purchase of Shares on any Initial Period Date if, in the reasonable judgment of
Share Seller, such purchase would contravene or violate any Requirement of Law
applicable to Share Seller. Share Seller shall cause any Shares so purchased to
be pledged to Share Purchaser pursuant to the Collateral Agreement or another
agreement reasonably acceptable to Share Purchaser.
(b) Notwithstanding subsection (a), Share Purchaser shall be entitled, by
written notice to Share Seller by 8:30 a.m., New York time, on any Initial
Period Date, to direct Share Seller not to purchase or cause the purchase of
Shares pursuant to subsection (a) above on such Initial Period Date (a "PURCHASE
SUSPENSION").
(c) No later than 5:00 p.m., New York time, on each Initial Period Date on
which Shares are purchased, Share Seller shall inform Share Purchaser by fax or
electronic mail of all Share purchases effected during such Initial Period Date
pursuant to this Section 2.2.
(d) On the earliest to occur of (i) the first Initial Period Date on which
the number of Initial Shares equals the Maximum Initial Shares, (ii) the first
Initial Period Date on which the Aggregate Forward Amount equals the Maximum
Initial Amount, (iii) written direction of Share Purchaser delivered to the
Trust and Share Seller that the Initial Period shall terminate, (iv) January 5,
2001 and (v) any Mandatory Prepayment Event or any Event of Default with respect
to Share Purchaser (the earliest of the dates described in clauses (i) through
(v), the "TRADE DATE"), the Initial Period shall terminate and Share Seller
shall cease purchasing or causing to be purchased Shares and shall promptly
prepare and deliver a schedule to Share Purchaser, which shall state the Number
of Shares, the Aggregate Forward Amount and the Initial Share Price as of the
end of the Initial Period.
Section 2.3 INTEREST PAYMENTS AND COMMISSIONS. (a) On the last Business Day
of each calendar month beginning with the calendar month in which the Closing
Date occurs and ending with the calendar month in which the Trade Date occurs
(the "INITIAL PAYMENT DATES"), Share Purchaser shall pay to or as directed by
Share Seller an amount in cash equal to the sum of (i) the aggregate Initial
Interest Costs for each Daily Aggregate Forward Amount for such calendar month
and (ii) the product of the Purchase Commission and the number of Shares
purchased pursuant to Section 2.2 during such calendar month (each a "MONTHLY
COMMISSION COST").
(b) (i) On each Interest Payment Date, Share Purchaser shall pay to or as
directed by Share Seller the Interest Cost accrued for the related Interest
Accrual Period.
(ii) On the Settlement Date related to the Maturity Date, Share Purchaser
shall pay to or as directed by Share Seller interest on the Aggregate Forward
Amount as of the Maturity Date in an amount (the "MATURITY INTEREST COST") equal
to the
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product of (w) the Spread PLUS the Interpolated LIBOR Rate for the period
specified in clause (y) of this Section 2.3(b)(ii), (x) such Aggregate Forward
Amount, (y) the number of days in the period from and including the first day of
the Interest Accrual Period in which the Maturity Date occurs to but excluding
the related Settlement Date and (z) 1/360.
(iii) On each Settlement Interest Payment Date with respect to a Principal
Payment Date, Share Purchaser shall pay to or as directed by Share Seller the
Settlement Interest Cost accrued for the related Settlement Interest Period.
(c) In lieu of settling its obligations under subsections (a) or (b) in
cash, Share Purchaser may, at its election and subject to Section 3.6, pay all
or any portion of any Initial Interest Costs, Monthly Commission Cost, Interest
Cost, Maturity Interest Cost or Settlement Interest Cost as provided in this
subsection by notice to Share Seller on or before the tenth Exchange Business
Day prior to the date such payment is due. If Share Purchaser so elects, on the
applicable payment date, Share Purchaser shall deliver to or as directed by
Share Seller a number of Shares ("INTEREST SETTLEMENT SHARES") equal to (i) 102%
MULTIPLIED BY the dollar amount of the Initial Interest Costs, Monthly
Commission Cost, Interest Cost, Maturity Interest Cost or Settlement Interest
Cost, as appropriate, not paid in cash on such payment date (the "INTEREST
SETTLEMENT Balance") DIVIDED BY (ii) the Closing Price for the Exchange Business
Day prior to such payment date; PROVIDED that if such Shares are to be sold on a
private placement basis (or on another basis not involving a sale pursuant to a
Registration Statement) as provided in Section 3.6, such number of Shares shall
be MULTIPLIED BY 110%; PROVIDED, FURTHER, that Share Purchaser shall not be
required to deliver Shares in excess of the Maximum Deliverable Shares.
Share Seller shall sell or cause to be sold the Interest Settlement Shares
in accordance with Sections 3.5 and 3.6. At the end of the third Exchange
Business Day following the date of any such sale of Shares, the Interest
Settlement Balance shall be (i) reduced by an amount equal to the Net Sale
Amount for such date, and (ii) until such time as the Interest Settlement
Balance has been reduced to zero, increased by an amount reflecting financing
costs with respect to the portion of the Interest Settlement Balance deemed to
be paid through the applicable Net Sale Amount for the period from and including
the applicable Initial Payment Date, Interest Payment Date, Settlement Date or
Settlement Interest Payment Date to but excluding such date at a per annum rate
equal to LIBOR compounded quarterly PLUS the Spread. Initial Interest Costs,
Interest Costs, Maturity Interest Cost, Monthly Commission Costs and Settlement
Interest Costs shall be treated as paid to the extent of the amounts described
in clause (i) of the preceding sentence.
If on any date the Interest Settlement Balance has been reduced to zero but
all Interest Settlement Shares have not been sold, no additional Interest
Settlement Shares shall be sold and Share Seller shall promptly deliver or cause
to be delivered to Share Purchaser any such remaining Interest Settlement
Shares. If the aggregate Net Sale
13
Amounts exceed the Interest Settlement Balance, Share Seller shall promptly pay
or cause to be paid the excess to Share Purchaser. If on any date all such
Interest Settlement Shares have been sold and the Interest Settlement Balance
has not been reduced to zero, Share Seller shall notify Share Purchaser, and
Share Purchaser shall, at Share Purchaser's election, on the third Exchange
Business Day after such date, either (i) deliver to or as directed by Share
Seller the number of whole Shares (the "INTEREST MAKE-WHOLE SHARES") equal to
(x) 102% MULTIPLIED BY the Interest Settlement Balance as of such date DIVIDED
BY (y) the Closing Price for such date (PROVIDED that if such Shares are to be
sold on a private placement basis (or on another basis not involving a sale
pursuant to a Registration Statement) as provided in Section 3.6, such number of
Shares shall be MULTIPLIED BY 110%; PROVIDED, FURTHER, that Share Purchaser
shall not be required to deliver Shares in excess of the Maximum Deliverable
Shares), which Shares shall be sold as though such Interest Make-Whole Shares
were Interest Settlement Shares, or (ii) pay to or as directed by Share Seller
an amount in cash equal to such remaining Interest Settlement Balance plus
accrued interest thereon through the payment date. Share Purchaser shall
promptly notify Share Seller of its election. This provision shall be applied
successively, MUTATIS MUTANDIS, until the Interest Settlement Balance is reduced
to zero; PROVIDED that Share Purchaser shall not be required to deliver Shares
in excess of the Maximum Deliverable Shares.
Section 2.4 PREPAYMENT. (a) Share Purchaser shall have the right to prepay
the Aggregate Forward Amount, in whole or in part, from time to time following
the Trade Date (an "OPTIONAL PREPAYMENT"), and if in part, in the amount of
$25,000,000 or any integral multiple of $1,000,000 in excess thereof. Share
Purchaser shall give Share Seller and the Trust irrevocable written notice of
its intent, on any Exchange Business Day, to prepay all or a portion of the
Aggregate Forward Amount at least ten Exchange Business Days prior to the
prepayment date selected by Share Purchaser (the "OPTIONAL PREPAYMENT DATE"),
which notice shall specify the dollar amount of such prepayment (the "OPTIONAL
PREPAYMENT AMOUNT"). In such notice, Share Purchaser shall also specify which
settlement option set forth in Article III hereof it has elected with respect to
such prepayment.
(b) (i) Under the circumstances described in Sections 7.3, 7.5, 7.8(b) and
8.2, Share Purchaser shall prepay the Aggregate Forward Amount in whole, and
upon the occurrence of a Mandatory Prepayment Event, Share Seller shall be
entitled, by written notice to Share Purchaser, to require Share Purchaser to
prepay the Aggregate Forward Amount to the extent described in subsection (ii)
below (each a "MANDATORY PREPAYMENT," and the dollar amount of such prepayment,
the "MANDATORY PREPAYMENT AMOUNT") on the Business Day designated or deemed
designated as a "MANDATORY PREPAYMENT DATE."
(ii) In the case of a Mandatory Prepayment Event set forth in clauses (i),
(iii), (iv) and (v) of the definition thereof, Share Seller may designate a
Mandatory Prepayment Date with respect to the entire Aggregate Forward Amount.
In the case of a Mandatory Prepayment Event set forth in clause (ii) of the
definition thereof, Share Seller
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may designate a Mandatory Prepayment Date with respect to a Mandatory Prepayment
Amount such that the Mandatory Prepayment Share Number following such Mandatory
Prepayment Date is less than but as close as reasonably practicable to 9.0% of
the total number of outstanding Shares. The Mandatory Prepayment Date designated
by any such notice described in this subparagraph (ii) shall be no less than 3
Exchange Business Days or more than 20 Exchange Business Days from the date such
notice is effective. Upon receipt of such notice, Share Purchaser shall promptly
(but in no event later than the second Exchange Business Day following such
receipt) deliver written notice to Share Seller, the Trust and the Collateral
Agent setting forth its settlement election pursuant to Article III with respect
to such Mandatory Prepayment Date. Notwithstanding the foregoing, in the case of
a Mandatory Prepayment Event set forth in clause (v) of the definition thereof,
if designating a Mandatory Prepayment Date as set forth in this subparagraph
(ii) and otherwise in accordance with the terms of this Agreement would be
inconsistent with the applicable order or directive of the applicable gaming
regulatory authority, the parties shall negotiate in good faith to resolve such
inconsistency in a manner that preserves the fundamental economic terms of this
Transaction and complies with such order or directive.
(c) Without duplication of any Interest Cost, Share Purchaser shall be
required to pay on the Settlement Date related to a Prepayment Date interest on
the applicable Optional Prepayment Amount or Mandatory Prepayment Amount
(either, a "PREPAYMENT AMOUNT") in an amount equal to the product of (i) the
Spread PLUS LIBOR for the Interest Accrual Period in which such Prepayment Date
occurs, (ii) such Prepayment Amount, (iii) the number of days in the period from
and including the first day of such Interest Accrual Period to but excluding the
related Settlement Date and (iv) 1/360. Share Purchaser shall be entitled, in
lieu of its obligations in this subsection (c), to pay such amount in accordance
with Section 2.3(c) as though such amount were an Interest Cost and the
applicable payment date were an Interest Payment Date.
(d) If the Settlement Date related to a Prepayment Date occurs on a date
that is not the last day of an Interest Accrual Period, Share Purchaser shall be
required to pay, in addition to the amount set forth in subparagraph (c) above,
interest breakage costs to Share Seller in an amount equal to the product of (A)
the positive difference, if any, between the LIBOR rate in effect during such
Interest Accrual Period and the Interpolated LIBOR Rate in effect for the period
from and including the related Settlement Date to and including the end of such
Interest Accrual Period; (B) the Prepayment Amount and (C) 1/360, payable for
each calendar day from and including such Settlement Date to and including the
last calendar day of such Interest Accrual Period. If such product is a positive
number, Share Purchaser shall pay such amount in cash to Share Seller on such
Settlement Date. Share Purchaser shall be entitled, in lieu of its obligations
in this subsection (d), to pay such amount in accordance with Section 2.3(c) as
though such amount were an Interest Cost and the applicable payment date were an
Interest Payment Date.
15
(e) On each Settlement Date related to a Prepayment Date, the Aggregate
Forward Amount shall be reduced by the applicable Prepayment Amount, and
interest, as provided in Section 2.3(b)(i) and (b)(ii), shall cease to accrue on
such amount on and including such Business Day and shall accrue as provided in
Section 2.3(b)(iii), if applicable.
Section 2.5 INTERIM SETTLEMENT. (a) If, on the last Exchange Business Day
of any calendar quarter following the month in which the Trade Date occurs, the
Closing Price for such date MULTIPLIED BY the Number of Shares as of such date
exceeds the Aggregate Forward Amount as of such date, Share Seller shall deliver
or cause to be delivered to Share Purchaser no later than the close of business
in New York on the third Exchange Business Day following such date a number of
Shares ("SELLER INTERIM SETTLEMENT SHARES") equal to the amount of such excess
DIVIDED BY such Closing Price, rounded to the nearest whole Share.
(b) If such Closing Price MULTIPLIED BY such Number of Shares is less than
such Aggregate Forward Amount, Share Purchaser shall deliver to or as directed
by Share Seller no later than the close of business in New York on the third
Exchange Business Day following such date a number of Shares ("PURCHASER INTERIM
SETTLEMENT SHARES") equal to the amount of such shortfall DIVIDED BY such
Closing Price, rounded to the nearest whole Share; PROVIDED that Share Purchaser
shall not be required to deliver Shares in excess of the Maximum Deliverable
Shares. With respect to any Purchaser Interim Settlement Shares so delivered,
Share Seller represents that it is not taking such Purchaser Interim Settlement
Shares with a view to the distribution thereof within the meaning of the
Securities Act, it being understood that this representation shall not limit the
right of Share Seller to sell or cause the sale of such Shares as contemplated
in this Agreement and the Collateral Agreement. Share Seller acknowledges and
agrees that such Purchaser Interim Settlement Shares cannot be resold unless
registered under the Securities Act or in a transaction exempt from or not
subject to the registration requirements of the Securities Act. Share Seller
acknowledges that certificates with respect to such Purchaser Interim Settlement
Shares delivered to or as directed by Share Seller pursuant to this provision
may bear a legend to such effect.
Section 2.6 FEES. On the Business Day following the Closing Date, Share
Purchaser shall pay to Share Seller an amount equal to $1,500,000.
ARTICLE III
SETTLEMENT TERMS
Section 3.1 SETTLEMENT. (a) For any Principal Payment Date, Share Purchaser
shall, subject to Section 3.6, have the option to physically settle, net-cash
settle or net-share settle its obligations with respect to such Principal
Payment Date in accordance with this Article III, by giving notice to Share
Seller no later than ten Exchange Business Days prior to such Principal Payment
Date or as otherwise provided
16
in Section 2.4(b)(ii), Section 7.5 or Section 8.2 (the date such notice is due,
the "ELECTION DATE"); PROVIDED that if Share Purchaser has not notified Share
Seller of its election by such date and in the case of Sections 7.3 and 7.8(b),
Share Purchaser shall be deemed to have elected physical settlement.
(b) An Optional Prepayment or Mandatory Prepayment in part shall occur
with respect to a number of whole Shares equal to the applicable Prepayment
Amount DIVIDED BY the Closing Price for the immediately preceding Interim
Settlement Reference Date (or, prior to the first Interim Settlement Reference
Date, the Initial Share Price), rounded to the nearest whole Share (the
"PREPAYMENT SHARES"). With respect to such prepayment, the provisions of this
Article III shall apply except that the references to Number of Shares shall
mean the Prepayment Shares and references to Aggregate Forward Amount shall mean
the Prepayment Amount.
Section 3.2 PHYSICAL SETTLEMENT. If Share Purchaser elects or is deemed to
have elected physical settlement with respect to a Principal Payment Date, Share
Seller shall deliver or cause to be delivered to Share Purchaser on the
applicable Settlement Date a number of Shares equal to the Number of Shares as
of such Principal Payment Date against payment by Share Purchaser to or as
directed by Share Seller of an amount equal to the Aggregate Forward Amount as
of such Principal Payment Date. Such payment and delivery shall be made on a
delivery versus payment basis.
Section 3.3 NET CASH SETTLEMENT. If Share Purchaser is entitled to elect
and elects a net cash settlement on or before the Election Date with respect to
a Principal Payment Date, on such Principal Payment Date a balance (the "NET
CASH SETTLEMENT BALANCE") shall be established with an initial balance equal to
the Aggregate Forward Amount for such Principal Payment Date. Share Seller shall
sell or cause to be sold Settlement Shares in accordance with Sections 3.5 and
3.6. At the end of the third Exchange Business Day following the date of any
such sale, the Net Cash Settlement Balance shall be reduced by an amount equal
to the Net Sale Amount for such date. Until such time as the Net Cash Settlement
Balance has been reduced to zero, all Net Sale Amounts shall be paid to or as
directed by Share Seller. After such time, any additional Net Sale Amounts shall
be paid to Share Purchaser. If, as of the date all Settlement Shares are sold,
the Net Cash Settlement Balance has not been reduced to zero, Share Purchaser
shall promptly pay to or as directed by Share Seller an amount equal to such
remaining Net Cash Settlement Balance. The Aggregate Forward Amount shall be
treated as paid to the extent of the amounts paid to or as directed by Share
Seller as described in this section.
Section 3.4 NET SHARE SETTLEMENT. (a) If Share Purchaser is entitled to
elect and elects net share settlement on or before the Election Date with
respect to a Principal Payment Date, on such Principal Payment Date a balance
(the "NET SHARE SETTLEMENT BALANCE") shall be established with an initial
balance equal to the Aggregate Forward Amount for such Principal Payment Date.
Share Seller shall sell or cause to be sold Settlement Shares in accordance with
Sections 3.5 and 3.6. At the end of the third
17
Exchange Business Day following the date of any such sale, the Net Share
Settlement Balance shall be reduced by an amount equal to the Net Sale Amount
for such date. The Aggregate Forward Amount shall be treated as paid to the
extent of the amount described in the preceding sentence and any amount paid by
Share Purchaser to or as directed by Share Seller as described in paragraph (b)
below.
(b) If, on any date, such Net Share Settlement Balance has been reduced to
zero but all Settlement Shares have not been sold, no additional Settlement
Shares shall be sold and Share Seller shall promptly deliver or cause to be
delivered to Share Purchaser any remaining Settlement Shares. If the aggregate
Net Sale Amounts exceed the Net Share Settlement Balance, Share Seller shall
promptly pay or cause to be paid the excess to Share Purchaser. If, on any date,
all Settlement Shares have been sold and the Net Share Settlement Balance has
not been reduced to zero, Share Seller shall notify Share Purchaser, and Share
Purchaser shall, at Share Purchaser's election, on the third Exchange Business
Day after such date, either (i) deliver to or as directed by Share Seller the
number of whole Shares (the "MAKE-WHOLE SHARES") equal to (x) 102% MULTIPLIED BY
the Net Share Settlement Balance as of such date DIVIDED BY (y) the Closing
Price as of such date (PROVIDED that if such Shares are to be sold on a private
placement basis (or on another basis not involving a sale pursuant to a
Registration Statement) as provided in Section 3.6, such number of Shares shall
be MULTIPLIED BY 110%; PROVIDED, FURTHER, that Share Purchaser shall not be
required to deliver Shares in excess of the Maximum Deliverable Shares), which
Shares shall be sold as though such Make-Whole Shares were Settlement Shares, or
(ii) pay to or as directed by Share Seller an amount in cash equal to such
remaining Net Share Settlement Balance. Share Purchaser shall promptly notify
Share Seller of its election. This provision shall be applied successively,
MUTATIS MUTANDIS, until the Net Share Settlement Balance is reduced to zero;
PROVIDED that Share Purchaser shall not be required to deliver Shares in excess
of the Maximum Deliverable Shares.
Section 3.5 SALE OF SHARES BY SHARE SELLER. (a) If Shares are to be sold
pursuant to Sections 2.3(c), 3.3 or 3.4 hereof, Share Seller shall, subject to
Section 3.6 hereof, use reasonable efforts to sell or cause to be sold such
Shares in such amounts, in such manner, at such prices and at such times as
Share Seller, in its sole discretion, shall determine; PROVIDED that, except in
the case of a Mandatory Prepayment Date designated as a result of an Event of
Default with respect to Share Purchaser or as described in the last sentence of
Section 2.4(b)(ii), Share Seller shall sell such Shares during a period of not
less than 10 Exchange Business Days. Notwithstanding anything to the contrary
herein, Share Seller shall not be required to sell or cause the sale of Shares
on any Exchange Business Day pursuant to Sections 2.3(c), 3.3, 3.4 or 3.5 if, in
the reasonable judgment of Share Seller, such sale would contravene or violate
any Requirement of Law applicable to Share Seller.
(b) Notwithstanding subsection (a), Share Purchaser may, by written notice
to Share Seller by 8:30 a.m., New York time, on any date on which Share Seller
may sell or cause the sale of Shares pursuant to Section 2.3(c), 3.3 or 3.4
hereof, direct
18
Share Seller not to sell or cause the sale of Shares on such date; PROVIDED that
Share Purchaser shall not be entitled to give such direction on (i) more than 20
Exchange Business Days if an Event of Default with respect to Share Purchaser is
then continuing or in respect of any Mandatory Prepayment Date designated as a
result of an Event of Default with respect to Share Purchaser or a Mandatory
Prepayment Event or (ii) if no Event of Default with respect to Share Purchaser
is then continuing, more than 30 Exchange Business Days in respect of any other
Principal Payment Date.
(c) No later than 5:00 p.m., New York time, on each Exchange Business Day
on which Shares are sold, Share Seller shall inform Share Purchaser by fax or
electronic mail of all Share sales effected pursuant to this Section 3.5 or
otherwise pursuant to this Agreement.
Section 3.6 REGISTRATION CONDITIONS. (a) Subject to subsection (b), but
notwithstanding any other provision to the contrary herein, sales of Shares
pursuant to Sections 2.3(c), 3.3, 3.4 and 3.5 shall not be permitted unless
Share Purchaser shall have satisfied the following conditions (the "REGISTRATION
CONDITIONS") with respect to all such Shares: (i) a registration statement (the
"REGISTRATION STATEMENT") covering public sale of such Shares on behalf of Share
Purchaser by Share Seller (or any Affiliate of Share Seller designated by Share
Seller) shall have been filed with, and declared effective by, the Securities
and Exchange Commission under the Securities Act, at or prior to the close of
business on the Exchange Business Day immediately preceding the Initial Payment
Date, Interest Payment Date, Settlement Date or Settlement Interest Payment
Date, as the case may be, no stop order shall be in effect with respect to such
Registration Statement, and a printed prospectus relating to all such Shares
(including any prospectus supplement thereto, a "PROSPECTUS") shall have been
delivered to Share Seller in such quantities as Share Seller shall reasonably
have requested, on or prior to the date of delivery; (ii) the form and content
of such Registration Statement and such Prospectus (including any sections
describing the plan of distribution) shall be satisfactory to Share Seller;
(iii) Share Purchaser shall have caused all such Shares to be listed on the
Exchange and on each securities exchange on which similar securities issued by
Share Purchaser are then listed; (iv) Share Seller (or any Affiliate of Share
Seller designated by Share Seller) shall have been afforded an opportunity to
conduct a due diligence investigation with respect to Share Purchaser customary
in scope for underwritten offerings of equity securities to confirm to the
satisfaction of Share Seller the accuracy in all material respects of the
Registration Statement; (v) an agreement (a "TRANSFER AGREEMENT") satisfactory
to Share Seller shall have been entered into between Share Purchaser and Share
Seller in connection with the sale of such Shares by Share Seller (or any such
Affiliate), which agreement shall include representations, covenants and
provisions relating to the indemnification of, and contribution in connection
with the liability of, Share Seller and its Affiliates customary in scope for
underwritten offerings of equity securities and shall provide for the payment by
Share Purchaser of all out-of-pocket expenses in connection with such sale,
including all registration costs and all fees and expenses of counsel for Share
Seller; and (vi) the representations and warranties of Share Purchaser set forth
in this Agreement and the relevant Transfer Agreement shall be true and correct
in all
19
material respects and Share Purchaser shall have performed its obligations set
forth herein and therein in all material respects. With respect to any sale of
Shares, Share Purchaser may request Share Seller to engage in marketing
activities, including a roadshow to investors. If Share Purchaser requests Share
Seller to engage in any marketing activities with respect to any such sale of
Shares, Share Seller shall be entitled to receive underwriting fees and
commissions, in addition to the Sale Commission, in such amounts and at such
times as both Share Seller and Share Purchaser shall mutually agree. If Share
Seller and Share Purchaser do not mutually agree on additional underwriting fees
and commissions, Share Seller shall not be obligated to engage in any marketing
activities with respect to the sale of the Shares. Notwithstanding anything to
the contrary herein, the parties agree that the actions specified in this
Section 3.6 are intended solely as a prerequisite to Share Purchaser's right to
elect net cash settlement or net share settlement pursuant to Section 3.3 or 3.4
or to exercise its right to make payments in Shares pursuant to Section 2.3(c),
and that Share Purchaser shall not otherwise be required to take any of the
actions specified in this Section 3.6.
(b) If on any Exchange Business Day on which there is a positive Interest
Settlement Balance or Settlement Balance any of the Registration Conditions is
not satisfied (any such date, a "REGISTRATION FAILURE DATE"), then (i) Share
Purchaser shall immediately notify Share Seller thereof and (ii) (A) Share
Seller shall be entitled to cease selling and causing to be sold Shares pursuant
to the Registration Statement and (B) Share Seller shall thereafter use
reasonable efforts to sell or cause to be sold Shares in accordance with Section
3.5 and as otherwise provided herein but on a private placement basis (or on
another basis not involving a sale pursuant to a Registration Statement);
PROVIDED that in such case Share Purchaser shall be entitled, on notice to Share
Seller, to repurchase all remaining Interest Settlement Shares and Interest
Make-Whole Shares or Settlement Shares, as the case may be, at an aggregate
price equal to the remaining Interest Settlement Balance or Settlement Balance,
as applicable, on the third Exchange Business Day following the date such notice
is received. If subsequent to a Registration Failure Date all of the
Registration Conditions are satisfied, Share Seller shall be entitled to sell or
cause to be sold all remaining Interest Settlement Shares and Interest
Make-Whole Shares or Settlement Shares, as the case may be, pursuant to the
Registration Statement.
Section 3.7 DEFAULT INTEREST. If Share Purchaser or Share Seller fails to
perform, when due, any obligation to make a payment to the other hereunder,
Share Purchaser or Share Seller, as the case may be, shall pay interest to the
other on demand in an amount (without duplication of other interest required to
be paid hereunder on such overdue amount) equal to the product of (i) the
overdue amount, (ii) a per annum rate, reset and compounded monthly, equal to
(A) LIBOR PLUS (B) the Applicable Spread, (iii) the number of days in the period
from and including the date such performance was due to but excluding the date
of actual performance and (iv) 1/360. Share Purchaser shall be entitled, in lieu
of its obligations under this Section 3.7, to pay such amount in accordance with
Section 2.3(c) as though such amount were an Interest Cost and the date of such
demand were an Interest Payment Date.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SHARE SELLER
Section 4.1 REPRESENTATIONS AND WARRANTIES OF SHARE SELLER. Share Seller
represents and warrants to Share Purchaser, each and all of which
representations and warranties shall survive the execution and delivery of this
Agreement and shall be repeated as of any date on which Share Seller delivers or
causes to be delivered Shares to Share Purchaser or purchases or sells (or
causes the purchase or sale of) Shares pursuant to the terms hereof, that:
(a) Share Seller is a national banking association duly organized and
validly existing under the laws of the United States and, if relevant to its
performance hereunder or under the Collateral Agreement, is in good standing.
(b) Each of this Agreement, the Collateral Agreement and each other
document relating to the Transaction to which Share Seller is a party or that
Share Seller is required to deliver has been (or, in the case of the Transfer
Agreement, will on the date of delivery be) duly authorized, executed and
delivered by or on behalf of Share Seller and is (or, in the case of the
Transfer Agreement, will on the date of delivery be) a valid and binding
agreement of Share Seller, enforceable against Share Seller in accordance with
its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and equitable principles of general
applicability.
(c) The execution and delivery by Share Seller of, and performance by
Share Seller of its obligations under, this Agreement and the Collateral
Agreement (i) will not contravene or constitute a default under any provision of
applicable law or regulation, any constitutive document of Share Seller, any
agreement or other instrument binding upon Share Seller or any of its assets or
any judgment, injunction, order or decree of any governmental body, agency,
official or court having jurisdiction over Share Seller, whether foreign or
domestic, and (ii) do not require any consent, approval, authorization or order
of, or filing or qualification with, any governmental body, agency, official,
self-regulatory organization or court or other tribunal, whether foreign or
domestic, except for informational filings with the Securities and Exchange
Commission and applicable gaming regulatory authorities.
(d) Any delivery of Shares by or on behalf of Share Seller pursuant to
this Agreement will pass to Share Purchaser title to such Shares free and clear
of any Liens except for any Liens caused by the actions of Share Purchaser.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SHARE PURCHASER
Section 5.1 REPRESENTATIONS AND WARRANTIES OF SHARE PURCHASER. Share
Purchaser represents and warrants to Share Seller as of the date hereof, as of
any date on which Share Purchaser makes a payment or delivers Shares to or at
the direction of Share Seller pursuant to the terms hereof, and as of any date
on which Share Seller purchases or sells (or causes the purchase or sale of)
Shares pursuant to the terms hereof (including in connection with a net cash or
net share settlement or the settlement of interest or commission obligations in
Shares), that:
(a) Share Purchaser is a corporation duly organized and validly existing
under the laws of the State of Nevada and, if relevant to its performance
hereunder or under the Collateral Agreement, is in good standing.
(b) Each of this Agreement, the Collateral Agreement and each other
document relating to the Transaction to which Share Purchaser is a party or that
Share Purchaser is required to deliver has been (or, in the case of the Transfer
Agreement, will on the date of delivery be) duly authorized, executed and
delivered by Share Purchaser and is (or, in the case of the Transfer Agreement,
will on the date of delivery be) a valid and binding agreement of Share
Purchaser, enforceable against Share Purchaser in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and equitable principles of general applicability.
(c) The execution and delivery by Share Purchaser of, and the performance
by Share Purchaser of its obligations under, this Agreement and the Collateral
Agreement (i) will not contravene or constitute a default under any provision of
applicable law or regulation or any constitutive document of Share Purchaser or
any agreement or other instrument binding upon Share Purchaser or any of its
assets or any judgment, injunction, order or decree of any governmental body,
agency, official or court having jurisdiction over Share Purchaser, whether
foreign or domestic, and (ii) do not require any consent, approval,
authorization, order of, or filing or qualification with, any governmental body,
agency, official, self-regulatory organization or court or other tribunal,
whether foreign or domestic, except for (A) such consents, approvals,
authorizations, orders, filings or qualifications (1) as have been obtained or
(2) as may be required following the date hereof in connection with the
satisfaction of the Registration Conditions and (B) informational filings with
the Securities and Exchange Commission and applicable gaming regulatory
authorities.
(d) Share Purchaser has a valid business purpose for entering into this
Agreement, and the Transaction contemplated hereby is consistent with Share
Purchaser's overall investment and business strategy.
22
(e) Share Purchaser is not entering into this Agreement or the Transaction
contemplated hereby to create actual or apparent trading activity in the Shares
(or any security convertible into or exchangeable for such Shares) or to raise
or depress or otherwise manipulate the price of such Shares (or any security
convertible into or exchangeable for such Shares).
(f) Share Purchaser (i) has had access to such information regarding this
Transaction and the other parties as it requires, (ii) has knowledge and
experience in financial and business matters and is capable of evaluating the
merits and risks of this Transaction and is able to bear the economic risk
thereof, (iii) is not entering into this transaction in reliance on tax,
accounting, legal, regulatory or other financial advice from Share Seller or
Share Seller's advisors and (iv) is solvent and able to pay its debts as they
come due, with assets having a fair value greater than the amount of its
liabilities and with capital sufficient to carry on the businesses in which it
engages.
Section 5.2. ADDITIONAL REPRESENTATIONS OF SHARE PURCHASER.
(a) Share Purchaser represents and warrants to Share Seller as of each
Initial Period Date on which Share Seller purchases or causes the purchase of
Shares pursuant to Section 2.2 that, assuming Share Seller's purchases are made
in accordance with Share Seller's covenant in Section 6.5, if Share Purchaser
were to have purchased such Shares in the same manner, such purchase would have
been in compliance with applicable law and all contractual obligations of Share
Purchaser and its Affiliates.
(b) Share Purchaser represents and warrants to Share Seller as of each day
on which Share Seller purchases or sells, or causes the purchase or sale of,
Shares pursuant to this Agreement (including in connection with a net cash or
net share settlement or the settlement of interest or commission obligations in
Shares) that there is no misstatement of material fact contained in its filings
under the Exchange Act or omission of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case as if
such filing spoke of the date of this representation.
(c) Share Purchaser represents and warrants to Share Seller in respect of
any Shares delivered to or at the direction of Share Seller that such Shares
shall be, upon such delivery, duly authorized, validly issued, fully paid and
nonassessable, and subject to no adverse claims of any other party other than as
provided in the Collateral Agreement.
(d) Share Purchaser represents and warrants to Share Seller that its
present intention is to elect physical settlement in connection with each
Principal Payment Date.
(e) Share Purchaser represents and warrants to Share Seller that it is
entering into this Agreement in connection with its Share repurchase program
which was
23
approved by its board of directors on May 18, 2000 and publicly announced on May
18, 2000, solely for the purposes stated in such board resolution and public
disclosure.
(f) Share Purchaser represents and warrants that the execution and
delivery by Share Seller and the Trust of, and performance by Share Seller and
the Trust of their respective obligations under, this Agreement and the
Collateral Agreement do not require any consent, approval, authorization or
order of, or filing or qualification with, any gaming regulatory authority with
respect to Share Seller or the Trust, except for such consents, approvals,
authorizations, orders, filings or qualifications as have been obtained or made
on or prior to the date hereof and except for the filing of the Transaction
Documents, the Amended and Restated Trust Agreement of the Trust, any related
agreements with respect to the Transaction, any amendments or supplements to any
of the foregoing and other informational filings to be performed by Share
Purchaser with applicable gaming regulatory authorities following the Closing
Date, and subject to the right of any applicable gaming regulatory authority, to
the extent permitted by applicable law, to require any Person holding beneficial
ownership of the Shares to apply for a determination of suitability with respect
to such holding.
ARTICLE VI
COVENANTS
Section 6.1 TAX TREATMENT. (a) Share Seller acknowledges that Share
Purchaser, solely for U.S. tax purposes, (i) will treat the transaction
contemplated by the Transaction Documents (the "TRANSACTION") as a series of
purchases of Shares by Share Purchaser on the dates on which Shares are acquired
by or on behalf of Share Seller, which Shares are pledged by Share Purchaser to
Share Seller and held by the Collateral Agent to secure a purchase loan from
Share Seller to Share Purchaser in the total amount of the Aggregate Forward
Amount, (ii) will treat Share Seller as entitled to repayment of such purchase
loan in cash and will treat the Initial Interest Costs, Interest Costs, Maturity
Interest Cost and Settlement Interest Costs as interest paid in cash by Share
Purchaser to Share Seller, regardless of whether such cash is derived directly
from Share Purchaser or from the sale of Shares provided by Share Purchaser or
any other source, and (iii) will treat Share Seller as acting for Share
Purchaser's account in connection with any purchase or sale of Shares under
Sections 2.2 or 3.5 hereof.
(b) Share Seller agrees to use reasonable efforts to notify Share
Purchaser in writing of any written request for information from, audit by,
proposed adjustment from or other inquiry by or dispute with any applicable
taxing authority (a "TAX INQUIRY") that concerns the treatment of the
Transaction for U.S. tax purposes within thirty business days of the receipt of
the relevant communication from such taxing authority.
Section 6.2 FURTHER ASSURANCES. From time to time from and after the date
hereof through the later of the final Settlement Date and, if applicable, the
date the
24
final Settlement Balance is reduced to zero, each party hereto shall
use its good faith 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 good faith 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 6.3 MAINTAIN AUTHORIZATIONS. Each party hereto shall use all
reasonable efforts to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained by it with
respect to this Agreement or any Transaction Document to which it is a party and
shall use all reasonable efforts to obtain any that may become necessary in the
future.
Section 6.4 COMPLY WITH LAWS. Each party hereto shall comply in all
material respects with all applicable laws and orders to which it may be subject
if failure so to comply would materially impair its ability to perform its
obligations under this Agreement or the Collateral Agreement.
Section 6.5 RULE 10b-18. Share Purchaser agrees that it will not
(i) purchase any Shares in the public markets other than through Banc of America
Securities LLC on any Initial Period Date on which Share Seller may purchase or
cause the purchase of Shares pursuant to Section 2.2 or (ii) take any other
action that would prevent Share Seller from purchasing or causing the purchase
of Shares in compliance with Rule 10b-18(b) under the Exchange Act on any such
Initial Period Date. Share Seller shall effect and shall cause its Affiliates
and the Trust to effect any purchases of Shares during the Initial Period in
compliance with the requirements of Rule 10b-18(b), assuming for these purposes
that such Persons were Share Purchaser and its "affiliated purchasers" (as
defined in Rule 10b-18).
Section 6.6 SECURITIES CONTRACT; STATUS OF OBLIGATIONS. (a) The parties
hereto acknowledge and agree that it is their intention that (i) Share Seller be
treated as a "financial institution" within the meaning of Section 101(22) of
Title 11 of the United States Code (the "BANKRUPTCY CODE"), (ii) this Agreement
be treated as a "securities contract" within the meaning of Section 741(7) of
the Bankruptcy Code entitled to the protection of Section 555 of the Bankruptcy
Code, and a "swap agreement" within the meaning of Section 101(53B) of the
Bankruptcy Code entitled to the protection of Section 560 of the Bankruptcy
Code, and (iii) each delivery of Shares under this Agreement or the Collateral
Agreement is a "settlement payment" within the meaning of Section 741(8) of the
Bankruptcy Code.
25
(b) The parties agree that in the event of a bankruptcy or insolvency with
respect to Share Purchaser, Share Seller shall have no greater rights against
Share Purchaser hereunder than would a holder of Shares; PROVIDED, HOWEVER, that
in pursuing a claim against Share Purchaser under such circumstances, Share
Seller's rights hereunder shall rank on a parity with the rights of a holder of
Shares enforcing similar rights with respect to a contract involving Shares.
Section 6.7 INDEMNITY. Share Purchaser agrees to indemnify Share Seller,
the Trust and their respective Affiliates and their respective directors,
officers, employees, agents and controlling persons (Share Seller and each such
person being an "INDEMNIFIED PARTY") from and against any and all losses,
claims, damages and liabilities, joint and several, to which such Indemnified
Party may become subject under any applicable federal or state law or otherwise,
and related to or arising out of any of the transactions contemplated by this
Agreement, and will reimburse any Indemnified Party for all expenses (including
reasonable counsel fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense or settlement of any pending or
threatened claim or any action or proceeding arising therefrom, whether or not
such Indemnified Party is a party and whether or not such claim, action or
proceeding is initiated or brought by or on behalf of Share Purchaser. Share
Purchaser shall not be liable under the foregoing indemnification provision to
the extent that any loss, claim, damage, liability or expense is found in a
nonappealable judgment by a court of competent jurisdiction to have resulted
from Share Seller's willful misconduct or gross negligence. The provisions of
this Section 6.7 shall survive any termination of this Agreement or completion
of the transactions contemplated hereby.
Section 6.8 MAXIMUM DELIVERABLE SHARES. Share Purchaser agrees that while
the Transaction is outstanding it shall not take any action or permit any action
to be taken that may cause an Available Shares Shortfall to exist.
ARTICLE VII
EXTRAORDINARY EVENTS, ADJUSTMENTS AND DIVIDENDS
Section 7.1 EXTRAORDINARY EVENTS. If any Merger Event shall occur prior to
the later of the final Settlement Date and, if applicable, the date the final
Settlement Balance is reduced to zero, the provisions of Sections 7.2 through
7.6 shall apply.
Section 7.2 SHARE FOR SHARE MERGER. If in respect of a Merger Event the
consideration for the Shares consists (or, at the option of the holder of the
Shares, may consist) solely of publicly traded shares (whether of the offeror or
a third party) (such shares, "NEW SHARES"), then on and after the Merger Date
the number of New Shares to which a holder of a number of Shares equal to the
Number of Shares would be entitled upon consummation of the Merger Event will be
deemed the "Number of Shares" (adjusted appropriately to reflect purchases of
Shares during the Initial Period and sales
26
of Shares in connection with the reduction of a Settlement Balance) and the New
Shares and their issuer will be deemed the "Shares" and the "Issuer",
respectively. The Calculation Agent shall adjust as it determines appropriate
any other relevant terms of this Agreement or the Collateral Agreement as a
result of such Merger Event.
Section 7.3 SHARE FOR OTHER MERGER. Except as provided in Section 7.5,
if in respect of a Merger Event the consideration for the Shares consists solely
of (i) cash and any securities (other than New Shares) or (ii) assets (whether
of the offeror or a third party) ((i) and (ii) collectively, "OTHER
CONSIDERATION"), then on and after the Merger Date the amount of Other
Consideration (as subsequently modified in accordance with the relevant terms
and including the proceeds of any redemption, if applicable) to which a holder
of a number of Shares equal to the Number of Shares would be entitled upon
consummation of the Merger Event will be deemed the "Number of Shares" (adjusted
appropriately to reflect purchases of Shares during the Initial Period and sales
of Shares in connection with the reduction of a Settlement Balance), the Other
Consideration will be deemed the "Shares," and a Mandatory Prepayment Date shall
occur with respect to the entire Aggregate Forward Amount on the first Exchange
Business Day on which a holder of the Shares, having received the Other
Consideration, would be able to deliver such Other Consideration to another
party. The Calculation Agent shall adjust as it determines appropriate any other
relevant terms of this Agreement or the Collateral Agreement as a result of such
Merger Event.
Section 7.4 SHARE FOR COMBINED MERGER. If in respect of a Merger Event
the consideration for the Shares consists of New Shares and Other Consideration,
then on and after the Merger Date the number of New Shares to which a holder of
a number of Shares equal to the Number of Shares would be entitled upon
consummation of the Merger Event will be deemed the "Number of Shares" (adjusted
appropriately to reflect purchases of Shares during the Initial Period and sales
of Shares in connection with the reduction of a Settlement Balance), the New
Shares and their issuer will be deemed the "Shares" and the "Issuer",
respectively, and the amount of Other Consideration (as subsequently modified in
accordance with any relevant terms and including proceeds of any redemption, if
applicable) to which such holder would be entitled upon the consummation of the
Merger Event shall be deemed to be an Extraordinary Dividend. The Calculation
Agent shall adjust as it determines appropriate any other relevant terms of this
Agreement or the Collateral Agreement as a result of such Merger Event.
Section 7.5 CASH MERGER. If in respect of a Merger Event the
consideration for the Shares consists solely of cash, then on or prior to the
Merger Date, Share Seller shall, upon notice to Share Purchaser, designate a
Mandatory Prepayment Date with respect to the entire Aggregate Forward Amount.
Share Purchaser, promptly on receipt of such notice, shall deliver written
notice to Share Seller, the Trust and the Collateral Agent setting forth its
settlement election pursuant to Article III with respect to such Mandatory
Prepayment Date. If necessary, the Calculation Agent shall adjust as it
27
determines appropriate any other relevant terms of this Agreement or the
Collateral Agreement as a result of such Merger Event.
Section 7.6 POSTPONEMENT OF DELIVERY; ELECTION OF CONSIDERATION.
(a) From and after the occurrence of a Merger Event, if as of any date Shares
are required to be delivered under this Agreement a holder of Shares would not
yet have received the New Shares to which it is entitled as a result of such
Merger Event, such delivery date shall be postponed to the first Exchange
Business Day on which such holder, having received the New Shares, would be able
to transfer such New Shares to another party.
(b) In respect of any Merger Event, to the extent that a holder of
Shares would be entitled to elect the consideration to be received in connection
with such Merger Event, Share Seller shall be entitled, after consultation with
Share Purchaser, to make such election for purposes of Sections 7.2 through 7.5.
Section 7.7 ADJUSTMENTS. In the event of any stock split, reverse
stock split, stock dividend, subdivision, consolidation or reclassification of
Shares or other similar event that may have a diluting or concentrative effect
on the theoretical value of the Shares (unless a Merger Event), the Calculation
Agent shall adjust as it determines appropriate the Number of Shares and/or any
other relevant terms of this Agreement or the Collateral Agreement to account
for that diluting or concentrative effect and determine the effective date of
such adjustments.
Section 7.8 DIVIDENDS. (a) If an "ex-dividend" date in relation to a
dividend or other distribution of cash (other than an Extraordinary Dividend)
occurs with respect to the Shares on or prior to the later of the final
Settlement Date and, if applicable, the date the final Settlement Balance is
reduced to zero, Share Seller shall pay or cause to be paid to Share Purchaser,
on the related payment date, the amount of all dividends or other distributions
to which a holder of a number of Shares equal to the Number of Shares (adjusted
appropriately to reflect purchases of Shares during the Initial Period and sales
of Shares in connection with the reduction of a Settlement Balance) as of such
"ex-dividend" date would be entitled.
(b) If an "ex-dividend" date in relation to an extraordinary cash or
non-cash dividend or other distribution (other than a dividend or other
distribution resulting in an adjustment pursuant to Section 7.7) (an
"EXTRAORDINARY DIVIDEND") occurs with respect to the Shares on or prior to the
later of the final Settlement Date and, if applicable, the date the final
Settlement Balance is reduced to zero, Share Seller shall deliver or cause to be
delivered to Share Purchaser, on the related distribution date and in the same
form in which the Extraordinary Dividend was made, the amount of the
Extraordinary Dividend to which a holder of a number of Shares equal to the
Number of Shares (adjusted appropriately to reflect purchases of Shares during
the Initial Period and sales of Shares in connection with the reduction of a
Settlement Balance) as of such "ex-dividend" date would be entitled, against
payment by Share Purchaser to or as directed by Share Seller of cash equal to
such amount (or in the case of a non-cash Extraordinary
28
Dividend, the value thereof as determined by the Calculation Agent), up to the
Aggregate Forward Amount. The Aggregate Forward Amount shall be reduced by the
amount of such cash payment upon receipt thereof by or on behalf of Share Seller
or upon netting as provided in the next sentence. To the extent such
Extraordinary Dividend consists of cash, the obligation of Share Seller to
deliver or cause the delivery of such Extraordinary Dividend and the obligation
of Share Purchaser to pay in cash the amount thereof shall be netted. If, as a
result of such payment or netting the Aggregate Forward Amount is reduced to
zero, a Mandatory Prepayment Date shall occur on the Exchange Business Day
following the date of such payment or netting. The Calculation Agent shall
adjust as it determines appropriate any other relevant terms of this Agreement
or the Collateral Agreement as a result of such Extraordinary Dividend.
Section 7.9 SPREAD ADJUSTMENT. If at any time Share Purchaser's senior
unsecured credit rating falls to or below B+ by S&P or B1 by Xxxxx'x or either
such rating is suspended or withdrawn, the Spread shall be adjusted (a
"REPRICING") to reflect then-prevailing market spreads for debt securities
issued by companies with the same rating as Share Purchaser's rating, as
determined by the Calculation Agent. If at any time following a Repricing, (i)
such credit rating or ratings are further reduced or are suspended or withdrawn
or (ii) such credit ratings are at or above BB- by S&P and Ba3 by Xxxxx'x, a
further Repricing shall occur as of the date of such change; PROVIDED that in no
event shall the Spread be less than the Initial Spread.
Section 7.10 MAXIMUM DELIVERABLE SHARES. The parties agree that if at
any time the number of Maximum Deliverable Shares is insufficient to permit
complete settlement of Share Purchaser's obligations hereunder, then (i) the
Maximum Deliverable Shares shall be increased to the extent Share Purchaser, at
such time or thereafter, has additional authorized but unissued Shares not
reserved for other purposes as necessary to complete such settlement, and (ii)
to the extent Share Purchaser does not have such authorized Shares, Share
Purchaser shall use its best efforts to cause the number of authorized Shares to
be increased as necessary to complete such settlement. Following any such
increase in the Maximum Deliverable Shares, Share Purchaser shall be required to
complete such settlement to the extent of such increase as otherwise provided
herein. The Calculation Agent shall adjust as it determines appropriate any
relevant terms of this Agreement in connection therewith.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1 EVENTS OF DEFAULT. The occurrence of one or more of the
following events with respect to Share Purchaser or Share Seller shall
constitute an "EVENT OF DEFAULT" with respect to such party:
(a) such party shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to itself or
its debts under
29
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall take any action to authorize any of the foregoing;
(b) an involuntary case or other proceeding shall be commenced
against such party seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
conservator, liquidator, custodian or other similar official of any substantial
part of its property (and such case or proceeding is not stayed or dismissed
within 30 days), or an order for relief shall be entered against such party
under the federal bankruptcy laws or a receiver or conservator is appointed
under federal insolvency laws, in each case as now or hereafter in effect;
(c) any representation made or repeated or deemed to have been made
or repeated by such party under this Agreement proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have been
made or repeated and remains incorrect or misleading in any material respect;
(d) such party fails to fulfill or discharge when due any of its
obligations, covenants or agreements under or relating to this Agreement or the
Collateral Agreement other than an obligation referred to in subparagraph (e)
below, and in any case such failure is not cured within 30 days after notice
thereof from the other party;
(e) failure by such party to make, when due, a payment or delivery of
Shares hereunder or under the Collateral Agreement, if such failure is not cured
within three Business Days after notice thereof from the other party; or
(f) with respect to Share Purchaser only, Share Purchaser and any of
its Significant Subsidiaries (i) fails to pay the principal, or any principal
installment, of any present or future indebtedness for borrowed money of
$25,000,000 or more, or any guaranty of present or future indebtedness for
borrowed money of $25,000,000 or more, on its part to be paid, when due (or
within any stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment or otherwise or (ii) fails to
perform or observe any other term, covenant or agreement on its part to be
performed or observed, or suffers any event to occur, in connection with any
present or future indebtedness for borrowed money of $25,000,000 or more, or of
any guaranty of present or future indebtedness for borrowed money of $25,000,000
or more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to declare
such indebtedness due before the date on which it otherwise would become due.
30
Section 8.2 CONSEQUENCES OF EVENTS OF DEFAULT. If an Event of Default
with respect to Share Purchaser or Share Seller (in such case, the "DEFAULTING
PARTY") has occurred and is continuing, then the other (the "NON-DEFAULTING
PARTY"), upon notice to the Defaulting Party, shall be entitled to designate an
Exchange Business Day on or after the date such notice is effective as a
Mandatory Prepayment Date with respect to the entire Aggregate Forward Amount;
PROVIDED that upon the occurrence of an Event of Default as set forth in
subsections (a), (b), (e) or, if caused by a failure to make a payment, (f) of
Section 8.1 with respect to Share Purchaser, the Exchange Business Day following
such occurrence shall be automatically designated as a Mandatory Prepayment Date
with respect to the entire Aggregate Forward Amount. Upon receipt by the
Defaulting Party of such notice or upon such automatic designation of a
Mandatory Prepayment Date, Share Purchaser shall promptly deliver written notice
to Share Seller, the Trust and the Collateral Agent setting forth its settlement
election pursuant to Article III with respect to such Mandatory Prepayment Date.
If Share Purchaser fails to perform its obligations in connection with any such
Mandatory Prepayment Date and Share Purchaser's obligations to Share Seller are
satisfied from the proceeds of Collateral pursuant to the Collateral Agreement,
the Aggregate Forward Amount will be treated as paid to the extent of such
proceeds.
ARTICLE IX
MISCELLANEOUS
Section 9.1 ASSIGNMENT BY SHARE SELLER. Notwithstanding any other
provisions in this Agreement to the contrary requiring or allowing Share
Purchaser to purchase, sell, receive or deliver any Shares or other securities
to or from Share Seller, Share Seller may designate the Trust or any of Share
Seller's Affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform Share Seller's obligations in respect of the
Transaction and any such designee shall assume such obligations. Share Seller
shall be discharged of its obligations to Share Purchaser only to the extent of
any such performance.
Section 9.2 DISCLOSURE. Share Purchaser is expressly authorized to
disclose any and all aspects of this transaction (and any related transactions)
to any and all Persons, without limitation of any kind.
Section 9.3 TRANSFERS. (a) Share Seller shall have the right to
assign, in whole or in part, its rights and corresponding obligations under this
Agreement to one or more other Persons, subject to Share Purchaser's consent,
which consent shall not be unreasonably withheld.
(b) Any Person to whom any rights or obligations under this Agreement
are assigned shall be subject to all the terms and conditions of this Agreement
and the Collateral Agreement. Any assignment in violation of this Agreement
shall be null and void.
31
(c) Share Purchaser shall not have the right to transfer any of its
rights or obligations under this Agreement.
Section 9.4 NOTICES. Except as otherwise provided herein, 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 and shall be effective upon receipt.
Notices to Share Purchaser shall be directed to:
Mandalay Resort Group
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, President
Facsimile: (000) 000-0000
Notices to Share Seller shall be directed to:
Bank of America, N.A.
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Bank of America, N.A.
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Financial Products, Middle Office
Facsimile: (000) 000-0000
Notices to the Trust shall be directed to:
MBG Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
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Section 9.5 GOVERNING LAW; SEVERABILITY; SUBMISSION TO JURISDICTION;
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 GIVING EFFECT TO CHOICE OF LAW
PRINCIPLES).
(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) EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK OR THE SUPREME COURT OF THE STATE OF NEW YORK FOR THE COUNTY OF NEW
YORK FOR THE PURPOSE OF ANY ACTION, SUIT OR OTHER PROCEEDING ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY ("PROCEEDINGS"). EACH PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY PROCEEDINGS IN SUCH COURTS, WAIVES ANY CLAIM THAT
SUCH PROCEEDINGS HAVE BEEN BROUGHT IN ANY INCONVENIENT FORUM AND FURTHER WAIVES
THE RIGHT TO OBJECT WITH RESPECT TO SUCH PROCEEDINGS THAT SUCH COURTS DO NOT
HAVE JURISDICTION OVER SUCH PARTY.
(d) ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY PROCEEDINGS IS
HEREBY WAIVED BY ALL PARTIES TO THIS AGREEMENT.
(e) SERVICE OF PROCESS. The parties irrevocably consent to service of
process given in any manner provided for notices in Section 9.4 that is
permitted by law. Nothing in this Agreement will affect the right of any party
to serve process in any other manner permitted by law.
Section 9.6 ENTIRE AGREEMENT. Except as expressly set forth herein,
this Agreement and the Collateral Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements, understandings and negotiations, both written and oral, among
the parties with respect to the subject matter of this Agreement.
Section 9.7 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 Share Purchaser, Share Seller and,
solely in the case of an amendment that affects the rights or obligations of the
Trust hereunder, the
33
Trust, or, in the case of a waiver, by the party against whom the waiver is to
be effective. No failure or delay by either 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 9.8 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 Share Seller, Share Purchaser, the Trust, the Persons referred
to in Section 6.7 and their respective successors and permitted 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 be
deemed to include the successors and permitted assigns of such party. All
covenants and agreements herein contained by or on behalf of Share Seller, Share
Purchaser and the Trust shall bind, and inure to the benefit of, their
respective successors and permitted assigns whether so expressed or not and
shall be enforceable by and inure to the benefit of Share Seller, Share
Purchaser and the Trust and each of their successors and permitted assigns.
Section 9.9 COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
Section 9.10 LIMITATION OF LIABILITY OF THE TRUSTEE. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by Wilmington Trust Company, not individually or personally but
solely as trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Trust is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but made and intended for the purpose of binding only the Trust, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant,
either expressed or implied, contained herein, all liability, if any, being
expressly waived by the parties hereto and by any person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Trust or be liable for the breach of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Agreement or any
other related documents.
Section 9.11 BANKRUPTCY NON-PETITION. Each of Share Seller and Share
Purchaser hereby agrees that it will not, until such time as it becomes a
Non-Defaulting Party, acquiesce, petition or otherwise invoke or cause the Trust
to invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Trust under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar
34
official of the Trust or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Trust.
Section 9.12 PAYMENTS. All payments required to be made hereunder
shall be made in United States dollars in immediately available funds to the
account specified in advance by the recipient of such payment.
Section 9.13 CALCULATION AGENT. Except as otherwise expressly provided
herein, Share Seller shall make all calculations, adjustments and determinations
required pursuant to this Agreement (Share Seller acting in such capacity, the
"CALCULATION AGENT"), and the Calculation Agent's good faith calculations,
adjustments and determinations shall be binding absent manifest error.
35
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
MANDALAY RESORT GROUP, as Share Purchaser
By: /s/ XXXXX X. XXXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
MBG TRUST, as the Trust
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Trustee
By: /s/ XXXXX X. XXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
BANK OF AMERICA, N.A., as Share Seller
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
