FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
FIRST AMENDMENT DATED AS OF October 8, 1999 (this "First Amendment") to
the Agreement and Plan of Merger dated as of April 9, 1999 (the "Merger
Agreement"), by and among Xxxxxxx Entertainment Company, a Delaware
corporation ("Xxxxxxx"), Xxxxxxx Television Company, a Delaware corporation
("GTC"), Xxxxxxx Communications, Inc., a Texas corporation ("GCI"), CBS
Corporation, a Pennsylvania corporation ("CBS"), CBS Dallas Ventures, Inc., a
Delaware corporation ("CBS Dallas Ventures"), and CBS Dallas Media, Inc., a
Delaware corporation ("CBS Dallas Media").
WITNESSETH:
WHEREAS Xxxxxxx, GTC, GCI, CBS, CBS Dallas Ventures and CBS Dallas Media
have entered into the Merger Agreement, pursuant to which CBS Dallas Ventures
will be merged with and into GCI, with GCI as the surviving corporation, and,
as a result, GCI will become a direct wholly owned subsidiary of CBS, and
pursuant to which CBS Dallas Media will be merged with and into GTC, with GTC
as the surviving corporation, and, as a result, GTC will become a direct
wholly owned subsidiary of CBS;
WHEREAS CBS has entered into a merger agreement dated as of September 6,
1999 (as amended and restated as of October 8, 1999, and as it may be further
amended from time to time, the "Viacom Merger Agreement") with Viacom Inc.
("Viacom"), pursuant to which and subject to the terms and conditions thereof,
the holders of CBS Common Stock (as defined in the Merger Agreement) will
receive, in exchange for shares of CBS Common Stock, shares of Class B Common
Stock, par value $ .01 per share, of Viacom (the "Viacom Class B Stock") upon
the effective time of the Merger (as defined in the Viacom Merger Agreement,
and referred to herein as the "Viacom Merger");
WHEREAS the parties to the Merger Agreement desire to amend the Merger
Agreement to provide, among other things, that the shares to be delivered to
Xxxxxxx pursuant to and in accordance with the terms of the Merger Agreement
shall be CBS Preferred Stock (as defined below) in lieu of CBS Common Stock,
and for the registration under the Securities Act of 1933 (the "Securities
Act") of the resale by Xxxxxxx of the shares of CBS Common Stock issuable to
Xxxxxxx upon conversion of the shares of CBS Preferred Stock (the "CBS
Conversion Shares");
WHEREAS, immediately prior, and as a condition, to the execution of this
First Amendment, CBS and Viacom amended and restated the Viacom Merger
Agreement to provide that, upon the closing of the Viacom Merger, outstanding
shares of CBS Preferred Stock shall be converted into voting shares of Viacom
Preferred Stock (as defined below) that will be convertible into duly
registered shares of Viacom Class B Stock;
WHEREAS the respective Boards of Directors, or duly authorized committees
thereof, of Xxxxxxx, CBS, GTC, GCI, CBS Dallas Ventures and CBS Dallas Media
have approved, and declared
it advisable and in the best interest of their respective companies and
stockholders to enter into the Merger Agreement, as amended hereby; and
WHEREAS capitalized terms used and not defined herein shall have the
respective meanings given to such terms in the Merger Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree
as follows:
ARTICLE I
AMENDMENTS
SECTION 1.1 The first sentence of Section 1.2 of the Merger Agreement is
hereby deleted and the following sentence is substituted in lieu thereof:
Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant
to Section 9, and subject to any extension permitted by Section
10.15 or 10.16 and to the satisfaction or (subject to applicable
law) waiver of the conditions set forth in Sections 6 and 7, the
consummation of the Mergers will take place on October 12, 1999.
SECTION 1.2 Clause (iii) of Section 1.8 of the Merger Agreement is hereby
deleted and the following clause is substituted in lieu thereof:
(iii) the aggregate of the shares of GCI Stock and GTC Stock
issued and outstanding immediately prior to the Effective Time shall
be converted into the right to receive the number of duly
authorized, validly issued, fully paid and non-assessable shares of
Series B Participating Preferred Stock, par value $1.00 per share,
of CBS (the "CBS Preferred Stock") determined under Section 1.9 of
this Agreement, which shares of CBS Preferred Stock shall have the
rights, limitations and preferences set forth in the Statement With
Respect to Shares attached hereto as Exhibit A.
SECTION 1.3 Section 1.9 of the Merger Agreement is hereby deleted and the
following section is substituted in lieu thereof:
Section 1.9 Consideration for Mergers
As of the Effective Time, CBS shall (i) issue and deliver to
Xxxxxxx one or more certificates registered in the name of Xxxxxxx
evidencing in the aggregate the number of shares (including
fractional shares rounded to the nearest 1/1,000th) of CBS Preferred
Stock equal to the quotient of Four Hundred Eighty-Five Million
Dollars ($485,000,000) divided by the product of (a) the "Market
Price" multiplied by (b) 1,000, and (ii) deliver to Xxxxxxx by wire
transfer in immediately available funds to an account designated in
writing by Xxxxxxx the sum of Four Million Two Hundred Thousand
Dollars ($4,200,000). The "Market Price" means the average of
the daily closing prices per share of CBS Common Stock as
reported on the NYSE Composite Transactions Tape (as reported by the
Wall Street Journal or, if not reported thereby, by another
authoritative source mutually selected by Xxxxxxx and CBS) for the
fifteen (15) consecutive full NYSE trading days immediately
preceding the third full NYSE trading day prior to the date on which
the Closing Date shall occur. Xxxxxxx and CBS agree to allocate one
percent (1%) and ninety-nine percent (99%) of the consideration
received from CBS hereunder to the GCI Stock and the GTC Stock,
respectively.
SECTION 1.4 The following sentence is added to the end of Section 1.10:
In the event of a sale of the Station by the Limited
Partnership or by its successors and assigns (the "Seller"), the
Seller shall require that the purchaser of the Station agree to
assume, be bound by and perform the remaining unperformed
obligations under this Section 1.10.
SECTION 1.5 CBS, Xxxxxxx, GTC and GCI shall, simultaneously with the
execution of this First Amendment, enter into the Amended and Restated Tax
Matters Agreement.
SECTION 1.6. The following Sections are hereby added to Section 2 of the
Merger Agreement:
Section 2.28 Purchase for Own Account
The shares of CBS Preferred Stock to be acquired by Xxxxxxx pursuant to
the Mergers will be acquired for investment for Gaylord's own account, not as
a nominee or agent, and not with a view to the resale or public distribution
of any part thereof in violation of any requirements of the Securities Act or
applicable state securities laws.
Section 2.29 Restricted Securities
Xxxxxxx understands and acknowledges that the acquisition by Xxxxxxx of
the shares of CBS Preferred Stock pursuant to the Mergers has not been, and
neither such shares of CBS Preferred Stock nor, except as provided in Section
5.14, the CBS Conversion Shares will be, registered under the Securities Act,
and that such shares of CBS Preferred Stock are, and the CBS Conversion Shares
will be, "restricted securities" under applicable U.S. federal and state
securities laws and that, pursuant to these laws, Gaylord must hold such
shares of CBS Preferred Stock and the CBS Conversion Shares indefinitely
unless their resale is registered with the SEC and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available.
Section 2.30 Legend
Xxxxxxx understands and acknowledges that the certificates evidencing the
shares of CBS Preferred Stock to be acquired by Xxxxxxx pursuant to the
Mergers, and the CBS Conversion Shares issuable upon conversion of the shares
of CBS Preferred Stock, will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NO SALE OR
DISTRIBUTION OF SUCH SECURITIES MAY BE EFFECTED WITHOUT EITHER AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933.
Section 2.31 Accredited Investor
Xxxxxxx is an accredited investor as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act.
SECTION 1.7 Schedule 2.16 is hereby amended by the addition, or
correction, of the items set forth on the Amendment to Schedule 2.16 attached
hereto. In addition, the last sentence of Section 2.8 is hereby deleted and
the following sentence is substituted in lieu thereof:
The lease agreements described in items 7, 8 and 10 under the
'Purchase, sale or lease of real property' heading to Schedule 2.16
do not, individually or collectively, materially interfere with the
business and operations of the Station as currently conducted.
SECTION 1.8 Section 3.2 of the Merger Agreement is hereby deleted and
the following section is substituted in lieu thereof:
Section 3.2 CBS Capital Stock to be Issued in this Transaction
The issuance of the CBS Preferred Stock to Xxxxxxx pursuant to
this Agreement, and the CBS Conversion Shares issuable upon
conversion of the CBS Preferred Stock, have been duly authorized by
all necessary corporate action on the part of CBS. When issued and
delivered to Xxxxxxx pursuant to this Agreement, the CBS Preferred
Stock shall be duly authorized, validly issued, fully paid,
non-assessable, shall have the rights, limitations and preferences
set forth on Exhibit A hereto, and shall not be subject to
preemptive rights. If and when issued and delivered upon conversion
of the CBS Preferred Stock, the CBS Conversion Shares shall be
validly issued, fully paid, non-assessable and not subject to
preemptive rights.
SECTION 1.9 Section 3.3 of the Merger Agreement is hereby amended by
deleting the last paragraph therein and substituting the following in lieu
thereof:
Except for (i) consents, approvals, licenses, permits, orders,
authorizations, registrations, declarations, filings or applications
as may be required under, and other applicable requirements of, the
Exchange Act, the Securities Act, the Improvements Act and any
foreign competition laws, (ii) filings under state securities or
"blue sky" laws, (iii) filings with the NYSE, (iv) approvals of and
filings with the FCC under the Communications Act, (v) the filing
with the Secretary of State of the Commonwealth
of Pennsylvania of a Statement With Respect to Shares pursuant to
Section 1522 of the Pennsylvania Business Corporation Law (the
"PBCL"), (vi) the filing of the GCI Articles of Merger with the
Secretary of State of the State of Texas, the filing of the GCI
Certificate of Merger and the GTC Certificate of Merger with the
Secretary of State of the State of Delaware and the filing of
appropriate documents with the relevant authorities of other
jurisdictions in which the CBS Subsidiaries are qualified to do
business and (vii) other consents, approvals, orders,
authorizations, registrations, declarations, filings and
applications expressly provided for in the Transaction Agreements,
no consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to CBS or any subsidiary of CBS in
connection with the execution, delivery or performance by CBS and
the CBS Subsidiaries of each Transaction Agreement to which any of
them is, or is specified to be, a party or the consummation by CBS
and the CBS Subsidiaries of the transactions contemplated thereby
(except where the failure to obtain such consents, approvals,
licenses, permits, orders or authorizations, or to make such
registrations, declarations or filings, would not, individually or
in the aggregate, have a CBS Material Adverse Effect).
SECTION 1.10 The last sentence of Section 5.6 of the Merger Agreement is
hereby deleted and the following sentence is substituted in lieu thereof:
CBS shall use its reasonable best efforts to cause the CBS
Conversion Shares to be approved for listing on the NYSE, subject to
official notice of issuance.
SECTION 1.11 The following Sections are hereby added to Section 5 of the
Merger Agreement:
Section 5.13 Viacom Merger Agreement; Class Vote; Transfer Restrictions
(a) CBS hereby represents that Schedule 5.13 attached hereto sets forth a
true and correct copy of the Amended and Restated Viacom Merger Agreement
dated as of October 8, 1999 (together with any exhibits thereto, as it or they
may be further amended from time to time, the "Viacom Merger Agreement")
executed by CBS and Viacom, including the form of the Restated Certificate of
Incorporation of Viacom (which is Exhibit A-1 thereto and is referred to
herein as the "Viacom Certificate") setting forth the rights, limitations and
preferences of the Series C Preferred Stock, par value $.01 per share, of
Viacom (the "Viacom Preferred Stock"), into which the CBS Preferred Stock
shall be converted pursuant to the Merger (as defined in the Viacom Merger
Agreement). CBS hereby covenants that (i), as of the effective time of the
Merger (as defined in the Viacom Merger Agreement), Section 5 of Article IV of
the Viacom Certificate shall be effective in the form attached hereto, (ii)
without the prior written consent of Xxxxxxx, which consent shall not be
unreasonably withheld, CBS will not enter into any amendment to, or waive any
condition to closing of, the Viacom Merger Agreement that would change
adversely any of the rights or privileges of the Viacom Preferred Stock or the
rights of a holder of the Viacom Preferred Stock to receive shares covered by
the Registration Statement (as defined in the Viacom Merger Agreement) in
accordance with the terms of the Viacom Merger Agreement as in effect on the
date hereof, including, without limitation, any amendment that would change
the Preferred Exchange Ratio (as defined in the
Viacom Merger Agreement) and (iii) CBS shall provide a copy of any further
amendment to the Viacom Merger Agreement to Xxxxxxx within five (5) days
following execution thereof.
(b) The parties acknowledge that, in certain instances, Section 1924 in
conjunction with Section 1914 of the PBCL entitle holders of a class or series
of stock of a Pennsylvania corporation to vote separately as a class or series
upon the adoption of a plan of merger or consolidation. The parties mutually
agree that such a separate class or series vote by holders of shares of CBS
Preferred Stock is not required in order for shareholders of CBS to properly
adopt the Viacom Merger Agreement under the PBCL. However, in the event it is
later determined in CBS' sole discretion that a separate class or series vote
by holders of shares of CBS Preferred Stock is or may be required in order for
shareholders of CBS to properly adopt the Viacom Merger Agreement, Xxxxxxx
hereby covenants and agrees that, at any meeting of CBS shareholders at which
holders of CBS Preferred Stock are asked to vote upon the Viacom Merger
Agreement, and in any action by written consent of such holders, when voting
as a separate class or series, Xxxxxxx shall vote all its shares of CBS
Preferred Stock in favor of the adoption of the Viacom Merger Agreement.
Xxxxxxx hereby covenants and agrees that, at any meeting of Viacom
shareholders at which holders of Viacom Preferred Stock are asked to vote upon
increasing the number of authorized shares of preferred stock of Viacom, and
in any action by written consent of such holders, when voting as a separate
class or series, Xxxxxxx shall vote all its shares of Viacom Preferred Stock
in favor of increasing the number of authorized shares of preferred stock of
Viacom. Xxxxxxx further covenants and agrees that it shall not enter into any
voting agreement or other agreement or understanding with any person or entity
with respect to the voting of its shares of Viacom Preferred Stock or grant a
proxy or power of attorney with respect to its shares of Viacom Preferred
Stock unless the party to whom Xxxxxxx grants such proxy or power of attorney
agrees to vote such shares in accordance with Gaylord's covenants in this
Section 5.13(b), and it hereby waives and agrees that it will not exercise any
dissenters rights that it may have in connection with the Merger (as defined
in the Viacom Merger Agreement) pursuant to Section 1571 of the PBCL. Xxxxxxx
hereby covenants and agrees that it shall not transfer record or beneficial
ownership of any of the shares of CBS Preferred Stock unless the transferee
unconditionally agrees in writing to be bound by the terms and conditions of
this Section 5.13.
(c) Xxxxxxx, by this Agreement, hereby irrevocably constitutes and
appoints CBS, with full power of substitution, as Gaylord's true and lawful
attorney and proxy, for and in its name, place and stead, to vote each of the
shares of CBS Preferred Stock held by Xxxxxxx as Xxxxxxx'x proxy to vote, in
any separate class or series vote by holders of shares of CBS Preferred Stock,
in favor of the adoption of the Viacom Merger Agreement and any other proposal
necessary to consummate the transactions contemplated by the Viacom Merger
Agreement in effect on the date hereof at any meeting or action by written
consent of CBS shareholders at which holders of CBS Preferred Stock are voting
as a separate class or series, or any adjournment or postponement thereof,
held to consider such adoption, provided that the grant of the aforesaid proxy
by Xxxxxxx shall be expressly conditioned upon (i) Section 5 of Article IV of
the Viacom Certificate remaining in the form attached hereto and (ii) CBS not
having breached either of the covenants set forth in clauses (i) and (ii) of
the second sentence of Section 5.13(a). THIS PROXY AND POWER OF ATTORNEY IS
IRREVOCABLE AND COUPLED WITH AN INTEREST. Xxxxxxx hereby acknowledges that it
has reviewed a copy of the Viacom Merger Agreement, as in effect on the date
hereof.
Section 5.14 Registration Statement
(a) CBS shall prepare and, prior to the Closing, shall file with the
SEC a registration statement on Form S-3 (including any amendments thereto,
the "Registration Statement") with respect to the CBS Conversion Shares. The
Registration Statement shall provide for the offer and sale of the CBS
Conversion Shares on a delayed or continuous basis. CBS shall use its best
efforts to cause the Registration Statement to become effective as soon as
reasonably practicable after the Effective Time and remain effective until the
earliest to occur of (i) two years after the Effective Time, (ii) such time as
all shares covered by the Registration Statement have been sold and (iii) the
effective time of the Merger (as defined in the Viacom Merger Agreement).
(b) CBS shall pay all costs, expenses and fees related to the
Registration Statement, including all registration and filing fees, printing
expenses, fees and disbursements of CBS's counsel and its independent
certified accountants, blue sky fees and expenses, and fees and disbursements
of Gaylord's counsel and, if CBS requests Xxxxxxx to effect an underwritten
public offering of any of the shares covered by the Registration Statement,
all road show and other marketing expenses incurred by CBS or any underwriters
which are not otherwise paid by such underwriters. Xxxxxxx shall pay any
selling expenses, including, if applicable, all underwriting discounts and
selling commissions, and, if Xxxxxxx elects to effect an underwritten public
offering of any of the shares covered by the Registration Statement, all road
show and other marketing expenses incurred by CBS or any underwriters which
are not otherwise paid by such underwriters.
(c) Xxxxxxx shall promptly upon request furnish to CBS or its
counsel such information concerning Xxxxxxx as may be required for inclusion
in the Registration Statement or the prospectus (including any supplements
thereto, the "Prospectus") that forms a part of the Registration Statement,
including information concerning Gaylord's beneficial ownership of CBS Common
Stock and Gaylord's intended plan of distribution for the shares covered by
the Registration Statement.
(a) CBS shall furnish to Xxxxxxx, prior to the filing thereof, a
copy of the Registration Statement, each amendment thereof and each amendment
or supplement, if any, to the Prospectus and shall use its best efforts to
reflect in each such document, when so filed, such comments as Xxxxxxx
reasonably and timely may propose. In connection with the Registration
Statement, CBS shall, as expeditiously as possible:
(i) prepare and file with the SEC such amendments of and
supplements to the Registration Statement and the Prospectus as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of the shares covered by the Registration Statement;
(ii) furnish such number of Prospectuses and other documents
incident thereto, including any supplements thereto, as Xxxxxxx from time to
time may reasonably request in order to facilitate the disposition of the
shares covered by the Registration Statement;
(iii) at any time when the Prospectus is required to be
delivered under the Securities Act, notify Xxxxxxx of the happening of any
event as a result of which the Prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading, and prepare and furnish to Xxxxxxx a reasonable number of copies
of a supplement to or an amendment of the Prospectus and the Registration
Statement as may be necessary so that, as thereafter delivered to the
purchasers of the shares, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements, in the light of the circumstances under which
they were made, not misleading;
(iv) take such action as Xxxxxxx may reasonably request to
qualify the shares covered by the Registration Statement for offering and sale
under the securities or blue sky laws of such jurisdictions as Xxxxxxx may
request and continue such qualifications in effect for so long as the
Registration Statement is effective, provided that in connection therewith CBS
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(v) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve (12) months, beginning with the first
day of CBS's first full fiscal quarter after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act;
(vi) in connection with any underwritten public offering of any
of the shares covered by the Registration Statement, (A) enter into an
underwriting agreement containing customary underwriting provisions, including
mutual indemnity provisions such as those set forth in Section 5.15, and
deliver or cause to be delivered such other documents as may be customary so
as to effect the offer and sale of the shares covered by the Registration
Statement, including "comfort letters" from CBS's independent certified
accountants, (B) make available to the underwriters such information and
members of management as the underwriters may reasonably request in connection
with their due diligence review of the affairs of CBS and (c) participate in
"road shows" and other marketing activities as the underwriters may reasonably
request; and
(vii) in connection with other transactions involving
broker-dealers that may be deemed to be an "underwriter" within the meaning of
Section 2(11) of the Securities Act, make available to such broker-dealers
such information and members of management as they may reasonably request in
connection with their due diligence review of the affairs of CBS and
participate in "road shows" and other marketing activities as such
broker-dealers may reasonably request.
(e) Xxxxxxx shall not permit any third party involved in a financing
transaction with Xxxxxxx (including any such party that may engage in hedging
transactions involving CBS Common Stock) to make an offer or sale of CBS
Common Stock that purports to be, or is required to be, covered by the
Registration Statement, without delivering the Prospectus (as appropriately
supplemented) in compliance with the delivery and disclosure requirements
applicable to such a transaction.
(f) CBS, upon written notice to Xxxxxxx, may suspend the use of the
Prospectus for a period or periods (each, a "Blackout Period") not to exceed
forty (40) trading days in the
aggregate in any twelve (12) month period if CBS determines in good faith that
such a suspension is necessary to avoid public disclosures (i) which would
interfere with or affect in a material adverse manner the negotiation or
completion of any acquisitions or divestitures as being contemplated by CBS at
the time the right to suspend is exercised or (ii) of pending corporate
developments of a nature which, in accordance with applicable federal
securities laws, would require public disclosure at the time of the proposed
sale, provided that CBS shall use its reasonable best efforts to keep the
length of any Blackout Period to the minimal time reasonably practicable under
the circumstances and, in any event, no more than ten (10) consecutive trading
days.
(g) Xxxxxxx may transfer or assign any of the rights or benefits
granted to it by CBS under this Section 5.14 and under Section 5.15 to a
pledgee under a pledge or similar agreement entered into by Xxxxxxx or to any
transferee of such a pledgee for which such pledgee has been acting as
collateral agent or in a similar capacity, provided that any such pledgee or
transferee shall assume the obligations, and be bound by the burdens, of
Xxxxxxx under Sections 5.14 and 5.15 as fully as if such person were a party
hereto. No purchaser of any of the shares covered by the Registration
Statement shall acquire or assume the benefits of any of the rights granted by
CBS hereunder.
Section 5.15 Indemnification and Contribution
(a) CBS will indemnify Xxxxxxx, each of its officers and directors,
and each person controlling Xxxxxxx, within the meaning of Section 15 of the
Securities Act, and each broker-dealer deemed to be an "underwriter" within
the meaning of Section 2(11) of the Securities Act, if any, and each person
who controls within the meaning of Section 15 of the Securities Act any such
broker-dealer, against all claims, losses, damages and liabilities (or
actions, proceedings or settlements in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in the Registration Statement or in any Prospectus, or based on any
omission (or alleged omission) to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and will reimburse Xxxxxxx, its officers
and directors and each person controlling Xxxxxxx, each such broker-dealer,
and each person who controls any such broker-dealer, for any legal and any
other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage or liability (or action or
proceeding in respect thereof), provided, however, that CBS will not be liable
in any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement (or alleged untrue
statement) or omission (or alleged omission) based upon written information
furnished to CBS by Xxxxxxx, any such broker-dealer or any person controlling
Xxxxxxx or any such broker-dealer and stated to be specifically for use
therein; provided further, however, that CBS will not be liable under this
Section 5.15 for any such claim, loss, damage, liability (or action,
proceeding or settlement in respect thereof) or expense that arises out of
Gaylord's or any other person's failure to send or give a copy of the final
Prospectus to the person asserting an untrue statement (or alleged untrue
statement) or omission (or alleged omission) at or prior to the written
confirmation of the sale of any shares covered by the Registration Statement
to such person if such statement or omission was corrected in such final
Prospectus and CBS or its counsel has previously furnished copies thereof to
Gaylord or such other person in accordance with this Agreement. It is agreed
that the indemnity agreement contained in this Section 5.15 shall not apply to
amounts paid in settlement of any such loss, claim, damage or
liability (or action or proceeding in respect thereof), if such settlement is
effected without the consent of CBS (which consent shall not be unreasonably
withheld).
(b) Xxxxxxx will (and will cause any transferee permitted under
Section 5.14(g) to) indemnify CBS, each of its directors and officers, and
each broker-dealer deemed to be an "underwriter" within the meaning of Section
2(11) of the Securities Act, if any, and each person who controls CBS or such
broker-dealer within the meaning of Section 15 of the Securities Act, against
all claims, losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement or in any Prospectus or any omission (or alleged
omission) to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and will reimburse CBS and such directors, officers,
broker-dealers, or controlling person for any legal and any other expenses
reasonably incurred in connection with investigating and defending or settling
any such claim, loss, damage or liability (or action or proceeding in respect
thereof), provided, however, that Xxxxxxx will not be liable in any such case
to the extent that any such expense, claim, loss, damage or liability arises
out of or is based on any untrue statement (or alleged untrue statement) or
omission (or alleged omission), based upon written information furnished to
Xxxxxxx by CBS or any person controlling CBS and stated to be specifically for
use therein. It is agreed that the obligations of Xxxxxxx hereunder shall not
apply to amounts paid in settlement of any such claims, losses, damages or
liabilities (or action or proceeding in respect thereof), if such settlement
is effected without the consent of Xxxxxxx (which consent shall not be
unreasonably withheld).
(c) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party or parties required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of
such claim or any litigation resulting therefrom, and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Section, to the extent such failure is not prejudicial to the Indemnifying
Party. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party or its counsel may
reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any claim, loss, damage, liability or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such claim, loss, damage, liability or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions that resulted in such claim, loss, damage,
liability or expense as well as any other relevant equitable considerations.
The relative fault of the Indemnifying Party and of the Indemnified Party
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 5.16 Procedure for Sale of CBS Conversion Shares
(a) If, on or prior to the first anniversary of the Effective Time,
Gaylord elects to sell any of the CBS Conversion Shares while the Registration
Statement is effective, Xxxxxxx shall promptly provide CBS with written notice
thereof (a "Notice of Intended Sale") setting forth the number of CBS
Conversion Shares proposed to be sold. If CBS determines pursuant to Section
5.14(f) to impose a Blackout Period, it may do so upon written notice (a
"Blackout Notice") to Xxxxxxx no later than the close of business (New York
City time) on the trading day immediately following the day of delivery of the
Notice of Intended Sale, it being understood that the foregoing shall not
limit CBS' ability to exercise its rights under Section 5.14(f) prior to the
consummation of the proposed sale specified in the Notice of Intended Sale by
delivery of a Blackout Notice. If CBS delivers a Blackout Notice, CBS
covenants that it shall provide written notice to Xxxxxxx (a "Resumption
Notice") no later than the close of business (New York City time) on the
trading day immediately following the day on which CBS determines in good
faith that Xxxxxxx can resume use of the Prospectus.
(b) If, on or prior to the first anniversary of the Effective Time,
(i) a Blackout Period continues for more than ten consecutive
(10) trading days (measured beginning on the date of delivery of a Blackout
Notice following delivery of a Notice of Intended Sale and ending on, and
including, the date of delivery of a Resumption Notice); or
(ii) if the aggregate number of trading days in any one
Blackout Period following delivery of a Notice of Intended Sale or in all
Blackout Periods following delivery of related Notices of Intended Sale
exceeds forty (40); then
CBS shall promptly pay to Xxxxxxx in cash an amount equal to the total number
of CBS Conversion Shares sold multiplied by the excess, if any, of (A) in the
case of clause (i), the lower of (1) the closing price per share of CBS Common
Stock as reported on the NYSE Composite Transactions
Tape (as reported by the Wall Street Journal or, if not reported thereby, by
another authoritative source mutually selected by Xxxxxxx and CBS) on the date
of the delivery of the relevant Blackout Notice and (2) the "Market Price" (as
defined in Section 1.9 above), and, in the case of clause (ii), the Market
Price, over (B) the higher of (1) the closing price per share of CBS Common
Stock as reported on the NYSE Composite Transactions Tape (as reported by the
Wall Street Journal or, if not reported thereby, by another authoritative
source mutually selected by Xxxxxxx and CBS) on the trading day immediately
following the last day of the relevant Blackout Period (which, in the case of
clause (ii), shall be the first Blackout Period that results in the aggregate
number of trading days exceeding forty (40)) and (2) the actual sale price per
share of CBS Common Stock received by Xxxxxxx minus the applicable per share
selling discount or commission; provided, however, that (I) the aggregate
amount of the obligation of CBS under clause (i) of this Section 5.16(b) (but
not under clause (ii)), shall not exceed Seven Million Dollars ($7,000,000);
(II) Xxxxxxx shall only be entitled to the payment from CBS under this Section
5.16 as to CBS Conversion Shares sold by Xxxxxxx within one (1) year following
receipt of the relevant Resumption Notice (which, in the case of clause (ii),
shall be the Resumption Notice delivered at the end of the Blackout Period
that results in the aggregate number of trading days exceeding forty (40));
and (iii) Xxxxxxx shall only be entitled to the payment from CBS under this
Section 5.16 as to no more than the number of CBS Conversion Shares specified
in the relevant Notice of Intended Sale. Any payments made under clause (i)
shall be credited to any payments due under clause (ii). Xxxxxxx acknowledges
that the indemnification to which it may be entitled under this Section
5.16(b) is its sole and exclusive remedy if a Blackout Period continues for
more than ten (10) consecutive trading days at one time or if the aggregate
number of trading days in any one Blackout Period or in all Blackout Periods
exceeds forty (40). If CBS Conversion Shares are sold in circumstances that
would require the application of this paragraph (b) at more than one price,
the formula provided in this paragraph (b) shall be applied independently to
each such sale.
SECTION 1.12 Section 6.5 of the Merger Agreement is hereby deleted and
replaced with the following:
The CBS Conversion Shares shall have been approved for listing on the
NYSE, subject to official notice of issuance.
SECTION 1.13 Section 7.4 of the Merger Agreement is hereby deleted and
replaced with the following:
Section 7.4 Intentionally Omitted
SECTION 1.14 Section 7.5 of the Merger Agreement is hereby deleted and
replaced with the following:
The CBS Conversion Shares shall have been approved for listing on the
NYSE, subject to official notice of issuance.
SECTION 1.15 Section 7.6 of the Merger Agreement is hereby deleted and
replaced with the following:
The Executive Vice President and Chief Financial Officer or the
Executive Vice President and General Counsel of CBS shall have
delivered a duly executed certificate reaffirming the accuracy of
the matters described in Sections 4.1 and 4.2 of the Amended and
Restated Tax Matters Agreement as of the Closing Date.
SECTION 1.16 The following Sections are hereby added to Section 7 of the
Merger Agreement:
Section 7.10 CBS shall have duly filed a Statement With Respect
to Shares in the form of Exhibit A attached hereto as an amendment
to its Restated Articles of Incorporation with the Secretary of
State of the Commonwealth of Pennsylvania.
Section 7.11 CBS shall have filed a registration statement on
Form S-3 as contemplated by Section 5.14(a).
Section 7.12 CBS shall have executed and delivered the Amended
and Restated Tax Matters Agreement.
SECTION 1.17 Schedule 5.2(e)(iii) is hereby deleted in its entirety.
SECTION 1.18 Section 10.4 of the Merger Agreement is hereby deleted and
replaced with the following:
All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered
when delivered personally, by messenger, by private courier, or by
facsimile transmission, or seventy-two (72) hours after having been
sent by registered or certified mail addressed as follows:
If to CBS, to:
CBS Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: 000 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: 000-000-0000
If to Gaylord, to:
Xxxxxxx Entertainment Company
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No: 000-000-0000
with a copy to:
Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: 615-742-4539
with a copy to:
Xxxx Xxxxx Xxxx & XxXxxx
1301 K Street, X.X.
Xxxx Xxxxx - Xxxxx X 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
or to such other address or facsimile number as such party may indicate
by a notice delivered to the other parties hereto.
SECTION 1.19 The Merger Agreement is hereby amended to add Exhibit A and
Schedule 5.13 hereto as Exhibit A and Schedule 5.13, respectively, to the
Merger Agreement.
SECTION 1.20 CBS hereby waives Section 6.6 of the Merger Agreement solely
with respect to Gaylord's obligations under Section 5.6 of the Merger
Agreement regarding the Crescent Real Estate lease. The foregoing waiver shall
not apply to any other obligation of Xxxxxxx or the Xxxxxxx Subsidiaries under
the Merger Agreement. Xxxxxxx covenants that it shall, as promptly as
reasonably practicable, cause the lessor under the Crescent Real Estate lease,
or an alternative lessor, to enter into a replacement of the Crescent Real
Estate lease on terms not materially more disadvantageous to CBS, GTC, GCI and
the Limited Partnership than those contained in the Crescent Real Estate
lease.
SECTION 1.21 The following is hereby added to Section 1.13 of the Merger
Agreement as paragraph (f):
(f) Xxxxxxx hereby represents that it has caused the Limited
Partnership to execute the letter agreement dated August 24, 1999
from Paramount Pictures Corporation ("Paramount") to the Station
(the "Paramount Letter"). Xxxxxxx hereby assumes the obligations to
pay the balance of the total license fee obligation described in the
Paramount Letter. In exchange therefor, CBS shall make a payment to
Xxxxxxx in the amount of $10,000, as reflected on the estimated
balance sheet
delivered pursuant to Section 1.13(d). Xxxxxxx and CBS each covenant
to use their reasonable efforts to cause Paramount to execute the
Paramount Letter as promptly as reasonably practicable. Upon
execution of the Paramount Letter by Paramount, notwithstanding
Section 1.13(e), CBS shall have no obligation to pay Xxxxxxx any
revenues with respect to the agreement that is the subject of the
Paramount Letter. If the parties are unable to cause Paramount to
execute the Paramount Letter within sixty (60) days, Xxxxxxx shall
pay CBS $10,000, and the agreement that is the subject of the
Paramount Letter shall be governed by the provisions of Section
1.13(e). Upon execution of the Paramount Letter by the parties
thereto, CBS shall have no obligation under the agreement that is
the subject of the Paramount Letter, and Xxxxxxx shall hold CBS
harmless from and against any such obligation or other liability
under such Agreement.
ARTICLE II
GENERAL
SECTION 2.1 Merger Agreement. Except as amended hereby, the
provisions of the Merger Agreement shall remain in full force and effect.
References in the Merger Agreement and the other Transaction Agreements
shall be references to the Merger Agreement as amended by this First
Amendment.
SECTION 2.2 Governing Law. This First Amendment shall be governed by
and construed in accordance with the laws of the State of Delaware
without reference to its choice of law rules.
SECTION 2.3 Execution in Counterparts. This First Amendment may be
executed in one or more counterparts, each of which shall be considered
an original instrument, but all of which shall be considered one and the
same agreement, and shall become binding when one or more counterparts
have been signed by each of the parties and delivered to each of the
parties.
IN WITNESS WHEREOF, Xxxxxxx, GTC, GCI, CBS, CBS Dallas Ventures and
CBS Dallas Media have caused this First Amendment to be signed by their
respective officers thereunto duly authorized as of the date first written
above.
XXXXXXX ENTERTAINMENT COMPANY
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title:
XXXXXXX TELEVISION COMPANY
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title:
XXXXXXX COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title:
CBS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
CBS DALLAS VENTURES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
CBS DALLAS MEDIA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
The Limited Partnership joins in the execution of this First Amendment
and agrees to be bound hereby and specifically acknowledges the terms of, and
agrees to be bound by, the terms of Section 1.10 of the Agreement, as amended
by this First Amendment.
XXXXXXX BROADCASTING COMPANY, L.P.
By: Xxxxxxx Communications, Inc., its general partner
By:
/s/ Xxxxxx X. Xxxxx
------------------------
Its:
------------------------
Amendment to Schedule 2.16
(omitted)
EXHIBIT A
CBS CORPORATION
RESOLUTION ESTABLISHING THE SERIES B
PARTICIPATING PREFERRED STOCK(1)
RESOLVED, that a series of Preferred Stock of the Company, the
Series B Participating Preferred Stock, is hereby created out of the
authorized but unissued shares of Preferred Stock of the Company undesignated
as to series, with the terms and provisions herein set forth, which terms and
provisions shall be made a part of the Company's Restated Articles of
Incorporation as Article FIFTH (F) thereof:
F. 1. DESIGNATION AND AMOUNT. The shares of this series shall be
designated as "Series B Participating Preferred Stock" (the "Series B
Preferred Stock"). The par value of each share of Series B Preferred Stock
shall be $1.00. The number of shares constituting the Series B Preferred Stock
shall initially be 10,150. The Company is authorized to issue fractional
shares of Series B Preferred Stock to 1/1000th of a share in accordance with
the terms herein. All references herein to shares of Series B Preferred Stock
shall be deemed to include, if applicable, references to such fractional
shares.
2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the provisions for adjustment hereinafter set forth,
the holders of outstanding shares of Series B Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, a cash dividend in an amount per
share (rounded to the nearest cent) equal to 1000 times the aggregate per
share amount of each cash dividend declared or paid on the Common Stock, $1.00
par value per share, of the Company (the "Common Stock"). In addition, in the
event the Company shall, at any time after the issuance of any share or
fraction of a share of Series B Preferred Stock, pay any dividend or make any
distribution on the shares of Common Stock of the Company, whether by way of a
dividend or a reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Company or otherwise, which is payable in cash or
any debt security, debt instrument, real or personal property or any other
property (other than (x) cash dividends subject to the
--------------------
1 To be attached to Statement With Respect To Shares.
2
immediately preceding sentence, (y) a distribution of shares of Common Stock
or other capital stock of the Company subject to paragraph 8(a) below or (z) a
distribution of rights or warrants to acquire any such shares subject to
paragraph 8(b) or (c) below, including as such a right any debt security
convertible into or exchangeable for any such shares, at a price less than the
Fair Market Value (as hereinafter defined) of such shares on the date of
issuance of such rights or warrants), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series B
Preferred Stock a distribution, in like kind, of 1000 times such distribution
paid on a share of Common Stock (subject to the provisions for adjustment
hereinafter set forth). The dividends and distributions on the Series B
Preferred Stock to which holders thereof are entitled pursuant to the first
and second sentences of this paragraph 2(a) are hereinafter referred to as
"Dividends" and the multiple of such cash and non-cash dividends and
distributions on the Common Stock applicable to the determination of the
Dividends, which shall be 1000 initially but shall be adjusted from time to
time as hereinafter provided, is hereinafter referred to as the "Dividend
Multiple." In the event the Company shall, at any time after the issuance of
any share or fraction of a share of Series B Preferred Stock, declare or pay
any dividend or make any distribution on Common Stock payable in shares of
Common Stock, or effect a subdivision or split or a combination, consolidation
or reverse split of the outstanding shares of Common Stock into a greater or
lesser number of shares of Common Stock, then in each such case the Dividend
Multiple thereafter applicable to the determination of the amount of Dividends
which holders of shares of Series B Preferred Stock shall be entitled to
receive shall be the Dividend Multiple applicable immediately prior to such
event multiplied by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) The Company shall declare each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash
dividend or distribution on the Common Stock in respect of which a Dividend is
required to be paid shall be paid or set aside for payment on the Common Stock
unless a Dividend in respect of such dividend or distribution on the Common
Stock shall be simultaneously paid, or set aside for payment, on the Series B
Preferred Stock.
3
(c) All Dividends paid with respect to shares of the Series B
Preferred Stock shall be paid pro rata on a share-by-share basis to the
holders entitled thereto.
(d) The holders of shares of Series B Preferred Stock shall
not be entitled to receive any dividends or distributions except as provided
herein.
3. VOTING RIGHTS. The holders of record of outstanding shares of
Series B Preferred Stock shall have the following voting rights:
(a) Subject to the provisions for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to
1000 votes on all matters submitted to a vote of the holders of the Common
Stock. The number of votes which a holder of a share of Series B Preferred
Stock is entitled to cast, as the same may be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Vote Multiple." In
the event the Company shall, at any time after the issuance of any share or
fraction of a share of Series B Preferred Stock, declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, then in each such case the Vote Multiple thereafter applicable to the
determination of the number of votes per share to which holders of shares of
Series B Preferred Stock shall be entitled after such event shall be the Vote
Multiple applicable immediately prior to such event multiplied by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Restated Articles of
Incorporation, in the By-laws or as otherwise provided by law, the holders of
shares of Series B Preferred Stock, the holders of shares of Series A
Participating Preferred Stock, par value $1.00 per share, of the Company (the
"Series A Preferred Stock"), if any, and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Company.
(c) Except as otherwise required by the Restated Articles of
Incorporation or the By-laws or set forth in this paragraph 3 or in paragraph
14 or as otherwise provided by law, holders of Series B Preferred Stock shall
have no
4
other special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for the taking of any corporate action.
4. CONVERSION. The shares of Series B Preferred Stock shall be
convertible as follows:
(a) Each share of Series B Preferred Stock shall be convertible, at
the option of the holder thereof, at any time after the date of issuance of
such share at the office of the Company or any transfer agent for the Series B
Preferred Stock. Subject to the provisions for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall be convertible into 1000
shares of Common Stock. The number of shares of Common Stock into which each
share of Series B Preferred Stock may be converted is hereinafter referred to
as the "Conversion Rate." In the event the Company shall, at any time after
the issuance of any share or fraction of a share of Series B Preferred Stock,
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or lesser
number of shares of Common Stock, then in each such case the Conversion Rate
thereafter applicable shall be the Conversion Rate applicable immediately
prior to such event multiplied by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) If the Merger Agreement (as hereinafter defined) is terminated
in accordance with its terms, all outstanding shares of Series B Preferred
Stock shall, at the option of the Company, be mandatorily converted into
shares of Common Stock at the Conversion Rate applicable immediately prior to
such termination.
(c) No fractional shares of Common Stock shall be issued upon
conversion of the Series B Preferred Stock. In lieu of any fractional shares
to which the holder would otherwise be entitled, the Company shall pay cash
equal to such fraction multiplied by the then Fair Market Value per share of
the Common Stock. For such purpose, all shares of Series B Preferred Stock
held by each holder shall be aggregated, and any resulting fractional share of
Common Stock shall be paid in cash. Before any holder of shares of Series B
Preferred Stock shall be entitled to convert the same into full shares of
Common Stock, and to receive
5
certificates therefor, the holder shall surrender the certificate or
certificates representing the shares of Series B Preferred Stock, duly
endorsed, at the office of the Company or of any transfer agent for the Series
B Preferred Stock, and shall give written notice to the Company at such office
that such holder elects to convert the same; provided, however, that in
connection with a conversion pursuant to paragraph 4(b) above, the conversion
shall be deemed effective immediately upon the Company's election thereunder.
The Company shall, as soon as practicable after such delivery, issue
and deliver at such office to such holder of Series B Preferred Stock a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled and a check payable to such holder in the amount
of any cash amount payable as the result of a conversion into fractional
shares of Common Stock, plus any declared and unpaid dividends on the
converted Series B Preferred Stock. Subject to the proviso in the last
sentence of the immediately preceding paragraph, such conversion shall be
deemed to have been made immediately prior to the close of business on the
date of receipt of such surrender of the shares of Series B Preferred Stock to
be converted, and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock on such date.
(d) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of Series B Preferred Stock, such
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series B Preferred Stock.
(e) Any notice required by the provisions of this Section 4 to be
given to the holders of shares of Series B Preferred Stock or to the Company
shall be given via facsimile transmission or via certified or registered U.S.
mail or via private overnight delivery service, if to the holder, at (615)
316-6570 or such holder's address appearing on the books of the Company, and
if to the Company, at (000) 000-0000 or 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX
00000, attention General Counsel, or such other facsimile number or address as
the holder or the Company shall notify the other of in accordance with the
notice provisions set forth in this paragraph 4(e). Notice shall be deemed to
have been given on the date of facsimile transmission (if the notice
6
is faxed) or five days after mailing (if the notice is mailed) or the day
after the notice is given to the delivery service (if sent by overnight
courier).
5. CERTAIN RESTRICTIONS.
(a) Whenever Dividends are in arrears or the Company shall be in
default on payment thereof, thereafter and until all accrued and unpaid
Dividends, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid or set irrevocably aside for payment in full,
and in addition to any and all other rights which any holder of shares of
Series B Preferred Stock may have in such circumstances, the Company shall
not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series B Preferred Stock, unless dividends are
paid ratably on the Series B Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled if the full dividends accrued thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 5(a), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Preferred Stock, provided that the Company may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Company ranking junior
(both as to dividends and upon liquidation, dissolution or winding
up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock, or any shares of stock ranking on
a parity with the Series B Preferred Stock (either as to dividends or
upon liquidation, dissolution or winding up) except as permitted by
subparagraph (iii) of this paragraph 5(a) or in accordance with a
purchase offer made to all
7
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Company shall not permit any Subsidiary (as hereinafter
defined) of the Company to purchase or otherwise acquire for consideration any
shares of stock of the Company unless the Company could, under subparagraph
(a) of this paragraph 5, purchase or otherwise acquire such shares at such
time and in such manner. A "Subsidiary" of the Company shall mean any
corporation or other entity of which securities or other ownership interests
entitled to cast at least a majority of the votes that would be entitled to be
cast in an election of the board of directors of such corporation or other
entity or other persons performing similar functions are beneficially owned,
directly or indirectly, by the Company or by any corporation or other entity
that is otherwise controlled by the Company.
(c) The Company shall not issue any shares of Series B Preferred
Stock except pursuant to the Agreement and Plan of Merger dated as of April 9,
1999, as it may be amended from time to time, among Xxxxxxx Entertainment
Company, Xxxxxxx Television Company, Xxxxxxx Communications, Inc., the
Company, CBS Dallas Ventures, Inc. and CBS Dallas Media, Inc., a copy of which
is on file with the Secretary of the Company at its principal executive
offices and shall be made available to holders of Series B Preferred Stock
without charge upon written request therefor addressed to the Secretary of the
Company at the address set forth in paragraph 4(e) above. Notwithstanding the
foregoing sentence, nothing contained in the provisions of this Article FIFTH
(F) shall prohibit or restrict the Company from issuing for any purpose any
series of Preferred Stock with rights and privileges similar to, different
from, or greater than, those of the Series B Preferred Stock or, subject to
the limitations set forth in paragraph 14, from creating other securities
senior to, junior to or on a parity with the Series B Preferred Stock.
6. REACQUIRED SHARES. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and canceled promptly after the acquisition thereof. All such
shares upon their retirement and cancelation shall become authorized but
unissued shares of Preferred Stock, without designation as to series, and such
shares may be
8
redesignated and reissued as part of any series of Preferred Stock.
7. LIQUIDATION, DISSOLUTION OR WINDING UP; FAIR VALUE FOR PURPOSES
OF PENNSYLVANIA ANTI-TAKEOVER STATUTE.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, no distribution shall be made (i) to the holders of
shares of stock ranking junior (upon liquidation, dissolution or winding up)
to the Series B Preferred Stock unless the holders of shares of Series B
Preferred Stock outstanding shall have received out of the assets of the
Company available for distribution to its shareholders after payment or
provision for payment of any securities ranking senior to the Series B
Preferred Stock, for each share of Series B Preferred Stock, subject to
adjustment as hereinafter provided, (A) $1.00 plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment or, (B) if greater than the amount specified in
clause (i)(A) of this sentence, an amount equal to 1000 times the aggregate
amount to be distributed per share to holders of Common Stock, as the same may
be adjusted as hereinafter provided, and (ii) to the holders of stock ranking
on a parity upon liquidation, dissolution or winding up with the Series B
Preferred Stock, unless simultaneously therewith distributions are made
ratably on the Series B Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of shares of
Series B Preferred Stock are entitled under clause (i)(A) of this sentence and
to which the holders of such parity shares are entitled, in each case upon
such liquidation, dissolution or winding up. The amount to which holders of
Series B Preferred Stock may be entitled upon liquidation, dissolution or
winding up of the Company pursuant to clause (i)(B) of the foregoing sentence
is hereinafter referred to as the "Participation Liquidation Amount" and the
multiple of the amount to be distributed to holders of shares of Common Stock
upon the liquidation, dissolution or winding up of the Company applicable
pursuant to said clause to the determination of the Participating Liquidation
Amount, as said multiple may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Liquidation Multiple". In the
event the Company shall, at any time after the issuance of any share or
fraction of a share of Series B Preferred Stock, declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, then in each such case the
9
Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series B Preferred Stock
shall be entitled after such event shall be the Liquidation Multiple
applicable immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Except as provided in this paragraph 7(a), holders of Series B Preferred Stock
shall not be entitled to any distribution in the event of liquidation,
dissolution or winding up of the Company.
(b) For the purposes of this xxxxxxxxx 0, xxxx of the following
shall be deemed to be a voluntary or involuntary liquidation, dissolution or
winding up of the Company:
(i) the voluntary sale, conveyance, lease, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets
of the Company;
(ii) the consolidation or merger of the Company with or into
one or more other corporations or other associations;
(iii) the consolidation or merger of one or more corporations
or other associations with or into the Company;
(iv) the participation by the Company in a share
exchange;
(v) the division of the Company pursuant to Sections 1951
through 1957 of the Pennsylvania Business Corporation Law (the
"Pennsylvania BCL"); or
(vi) the conversion of the Company pursuant to Sections 1961
through 1966 of the Pennsylvania BCL.
(c) Notwithstanding anything to the contrary in this Article FIFTH
(F), in case any Controlling Person or Group (as defined from time to time in
Section 2543 of the Pennsylvania BCL) shall be required to purchase any shares
of Series B Preferred Stock pursuant to Sections 2541 through 2548 of the
Pennsylvania BCL, as in effect from time to time, the amount that is
determined to represent the "fair value" (as that term is used in Section 2542
of the
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Pennsylvania BCL) of such shares shall be an amount per share equal to the
Liquidation Multiple then in effect times the aggregate amount per share that
such Controlling Person or Group is required to pay to purchase any share of
Common Stock pursuant to such Sections 2541 through 2548 of the Pennsylvania
BCL.
8. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.
(a) In the event that holders of shares of Common Stock receive,
after the issuance of any share or fraction of a share of Series B Preferred
Stock, in respect of their shares of Common Stock any share of capital stock
of the Company (other than any share of Common Stock), whether by way of
reclassification, recapitalization, reorganization, dividend or other
distribution or otherwise (a "Transaction"), then, and in each such event, the
dividend rights, voting rights, conversion rights and rights upon the
liquidation, dissolution or winding up of the Company of the shares of Series
B Preferred Stock shall be adjusted so that after such Transaction the holders
of Series B Preferred Stock shall be entitled, in respect of each share of
Series B Preferred Stock held, in addition to such rights in respect thereof
to which such holder was entitled immediately prior to such adjustment, (i) to
such additional dividends as equal the Dividend Multiple in effect immediately
prior to such Transaction multiplied by the additional dividends which the
holder of a share of Common Stock shall be entitled to receive by virtue of
the receipt in the Transaction of such capital stock, (ii) to such additional
voting rights as equal the Vote Multiple in effect immediately prior to such
Transaction multiplied by the additional voting rights to which the holder of
a share of Common Stock shall be entitled by virtue of the receipt in the
Transaction of such capital stock, (iii) upon surrender of shares of Series B
Preferred Stock for conversion, to the aggregate number and kind of shares of
capital stock of the Company which, if such shares of Series B Preferred Stock
had been converted immediately prior to such Transaction, such holder would
have been entitled to receive by virtue of such Transaction and (iv) to such
additional distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to such
Transaction multiplied by the additional amount which the holder of a share of
Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Company by virtue of the receipt in the Transaction of such
capital stock, as the case may be, all as provided by the terms of such
capital stock.
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(b) In the event that holders of shares of Common Stock receive,
after the issuance of any share or fraction of a share of Series B Preferred
Stock, in respect of their shares of Common Stock any right or warrant to
purchase Common Stock (including as such a right, for all purposes of this
paragraph 8(b), any security convertible into or exchangeable for Common
Stock) at a purchase price per share less than the Fair Market Value of a
share of Common Stock on the date of issuance of such right or warrant, then
and in each such event the dividend rights, voting rights, conversion rights
and rights upon the liquidation, dissolution or winding up of the Company of
the shares of Series B Preferred Stock shall each be adjusted so that after
such event the Dividend Multiple, the Vote Multiple, the Conversion Rate and
the Liquidation Multiple shall each be the product of the Dividend Multiple,
the Vote Multiple, the Conversion Rate and the Liquidation Multiple, as the
case may be, in effect immediately prior to such event multiplied by a
fraction the numerator of which shall be the number of shares of Common Stock
outstanding immediately before such issuance of rights or warrants plus the
maximum number of shares of Common Stock which could be acquired upon exercise
in full of all such rights or warrants and the denominator of which shall be
the number of shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the number of shares of Common Stock which
could be purchased, at the Fair Market Value of the Common Stock at the time
of such issuance, by the maximum aggregate consideration payable upon exercise
in full of all such rights or warrants.
(c) In the event that holders of shares of Common Stock of the
Company receive, after the issuance of any share or fraction of a share of
Series B Preferred Stock, in respect of their shares of Common Stock any right
or warrant to purchase capital stock of the Company (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph
8(c), any security convertible into or exchangeable for capital stock of the
Company (other than Common Stock) but excluding, for all purposes of this
paragraph 8(c), any rights issuable under the Company's Rights Agreement dated
as of December 28, 1995, with First Chicago Trust Company of New York, as it
may be amended from time to time, at a purchase price per share less than the
Fair Market Value of a share of such capital stock on the date of issuance of
such right or warrant, then and in each such event the dividend rights, voting
rights, conversion rights and rights upon liquidation, dissolution or winding
up of the Company of the shares of Series B Preferred Stock shall each be
adjusted so that after such event each holder of a share of Series B Preferred
Stock shall be entitled, in
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respect of each share of Series B Preferred Stock held, in addition to such
rights in respect thereof to which such holder was entitled immediately prior
to such event, to receive (i) such additional dividends as equal the Dividend
Multiple in effect immediately prior to such event multiplied, first, by the
additional dividends to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital stock
which could be acquired upon such exercise, and multiplied again by the
Discount Fraction (as hereinafter defined), (ii) such additional voting rights
as equal the Vote Multiple in effect immediately prior to such event
multiplied, first, by the additional voting rights to which the holder of a
share of Common Stock shall be entitled upon exercise of such right or warrant
by virtue of the capital stock which could be acquired upon such exercise, and
multiplied again by the Discount Fraction, (iii) such additional conversion
rights as equal the Conversion Rate in effect immediately prior to such event
multiplied by a fraction the numerator of which shall be the Fair Market Value
per share of Common Stock on the date of such event less the Fair Market Value
of the portion of the right or warrant so distributed applicable to one share
of Common Stock and the denominator of which shall be the Fair Market Value
per share of Common Stock on the date of such event and (iv) such additional
distributions upon liquidation, dissolution or winding up of the Company as
equal the Liquidation Multiple in effect immediately prior to such event
multiplied, first, by the additional amount which the holder of a share of
Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Company upon exercise of such right or warrant by virtue of
the capital stock which could be acquired upon such exercise, and multiplied
again by the Discount Fraction. For purposes of this paragraph, the "Discount
Fraction" shall be a fraction the numerator of which shall be the difference
between the Fair Market Value of a share of the capital stock subject to a
right or warrant distributed to holders of shares of Common Stock of the
Company as contemplated by this paragraph 8(c) immediately after the
distribution thereof and the purchase price per share for such share of
capital stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock immediately
after the distribution of such right or warrant.
(d) For purposes of this Article FIFTH (F), the "Fair Market Value"
of a share of capital stock of the Company (including a share of Common Stock)
on any date shall be deemed to be the average of the daily closing price per
share thereof over the 15 consecutive Trading Days (as
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hereinafter defined) immediately prior to such date; provided, however, that
in the event the Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 15 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such capital stock
or division of the Company pursuant to Sections 1951 through 1957 of the
Pennsylvania BCL, then, and in each such case, the Fair Market Value shall be
appropriately adjusted by the Board of Directors of the Company to take into
account ex-dividend or post-effective date trading. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way (in either case, as reported in the applicable transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange), or, if the shares are not listed or admitted to trading
on the New York Stock Exchange, as reported in the applicable transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares are listed or admitted to trading or,
if the shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by The
Nasdaq Stock Market or such other system then in use, or if on any such date
the shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the shares selected by the Board of Directors of the Company. The
term "Trading Day" shall mean a day on which the principal national securities
exchange on which the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or admitted to
trading on any national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be selected by the
Board of Directors of the Company is open. If the shares are not publicly held
or not so listed or traded on any day within the 15 Trading Day period
applicable to the determination of Fair Market Value thereof as aforesaid,
"Fair Market Value" shall mean the fair market value thereof per share as
determined in good faith by the Board of Directors of the Company. In either
case referred to in the foregoing sentence, the determination of Fair Market
Value shall be described in a statement filed with the Secretary of the
Company.
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9. CONSOLIDATION, MERGER, ETC. In case the Company shall enter into
any consolidation, merger, division, share exchange, combination, sale of all
or substantially all of the Company's assets, or other transaction in which
the shares of Common Stock are exchanged for or changed into other securities,
cash and/or any other property, then in any such case each outstanding share
of Series B Preferred Stock shall at the same time be similarly exchanged for
or changed into the aggregate amount of securities, cash and/or other property
(payable in like kind), as the case may be, for which or into which each share
of Common Stock is changed or exchanged multiplied by the highest of the Vote
Multiple, the Dividend Multiple, the Conversion Rate or the Liquidation
Multiple in effect immediately prior to such event; provided, however, that no
fractional share or scrip representing fractional shares of any other
securities shall be issued; provided further, however, that upon consummation
of the merger contemplated in the Amended and Restated Agreement and Plan of
Merger dated as of October 8, 1999, as it may be amended from time to time
(the "Merger Agreement"), between the Company and Viacom Inc. ("Viacom"), each
outstanding share of Series B Preferred Stock shall be converted into the
aggregate number of shares of Series C Preferred Stock, par value $.01 per
share, of Viacom Inc. (the "Viacom Preferred Stock") into which each share of
Series B Preferred Stock is convertible pursuant to the Merger Agreement, and
each share of Viacom Preferred Stock shall have substantially identical
preferences, limitations and special rights as the Series B Preferred Stock
except that such Viacom Preferred Stock shall, subject to adjustment (i) be
convertible at any time into 1,000 shares of non-voting Class B Common Stock,
par value $.01 per share, of Viacom (the "Viacom Class B Stock") and (ii)
possess the voting power of 100 shares of Class A Common Stock, par value $.01
per share, of Viacom. Instead of any fractional interest in a share of such
other securities which would otherwise be deliverable pursuant to this
paragraph 9, the Company will pay to the holder thereof an amount in cash
(computed to the nearest cent) equal to the same fraction of the Fair Market
Value of a share of such other security or such other amount as may be set
forth in the Merger Agreement.
10. EFFECTIVE TIME OF ADJUSTMENTS.
(a) Adjustments to the Series B Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
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(b) The Company shall give prompt written notice to each holder of a
share of outstanding Series B Preferred Stock of the effect of any adjustment
to the voting rights, dividend rights, conversion rights or rights upon
liquidation, dissolution or winding up of the Company of such shares required
by the provisions hereof. Notwithstanding the foregoing sentence, the failure
of the Company to give such notice shall not affect the validity or the force
or effect of, or the requirement for, such adjustment.
11. NO REDEMPTION. The shares of Series B Preferred Stock shall not
be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this paragraph 11, the Company may
acquire shares of Series B Preferred Stock in any other manner permitted by
law, the provisions hereof or the Restated Articles of Incorporation.
12. RANKING. The Series B Preferred Stock shall rank senior to the
Common Stock, pari passu with the Series A Preferred Stock (except with
respect to Preferential Dividends, in which case the Series B Preferred Stock
shall rank junior to the Series A Preferred Stock) and, unless otherwise
provided in a Statement with Respect to Shares or an amendment to the Restated
Articles of Incorporation relating to the determination of a subsequent series
of Preferred Stock, the Series B Preferred Stock shall rank junior to all
other series of Preferred Stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up.
13. LIMITATIONS. Except as may otherwise be required by law, the
shares of Series B Preferred Stock shall not have any powers, preferences or
relative, participating, optional or other special rights other than those
specifically set forth in this Article FIFTH (F) (as such may be amended from
time to time) or otherwise in the Restated Articles of Incorporation.
14. AMENDMENT. So long as any shares of the Series B Preferred Stock
are outstanding, the Company shall not amend this Article FIFTH (F) or the
Restated Articles of Incorporation in any manner which would alter or change
the rights, preferences or limitations cf the Series B Preferred Stock so as
to affect such rights, preferences or limitations in any material respect
prejudicial to the holders of the Series B Preferred Stock without, in
addition to any other vote of shareholders required by law, the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series
B Preferred Stock, voting
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together as a single class either in writing or by resolution adopted at an
annual or special meeting called for the purpose; provided, however, that the
creation of another series of Preferred Stock ranking senior to or on a parity
with the Series B Preferred Stock as to the payment of dividends or the
distribution of assets on liquidation, dissolution or winding up shall not be
deemed to be prejudicial to the holders of the Series B Preferred Stock for
the purposes of this paragraph 14.
