As filed with the Securities and Exchange Commission on October 12, 1999
Registration Statement No. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CBS CORPORATION
(Exact name of Registrant as specified in its charter)
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Pennsylvania 25-0877540
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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51 West 52nd Street
New York, NY 10019
(212) 975-4321
(Address, including zip code, and telephone
number, including area code, of
Registrant's principal executive
offices)
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Louis J. Briskman, Esq.
Executive Vice President and General Counsel
CBS Corporation
51 West 52nd Street
New York, NY 10019
(212) 975-4321
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
Peter S. Wilson, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
(212) 474-1000
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Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities
offered only in connection with dividend or interest reinvestment plans,
please check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
Proposed
Title of Each Proposed Maximum
Class of Maximum Aggregate Amount of
Securities Amount to be Offering Price Offering Registration
To be Registered Registered Per Share(1) Price(1) Fee(2)
Common Stock,
$1.00 par value 10,141,691 $48.72 $494,103,186 $137,360.69
Series A Preferred
Stock Purchase
Rights 10,141,691 (3) (3) (3)
(1) Estimated solely for the purposes of computing the registration fee
pursuant to Rule 457(c) under the Securities Act on the basis of the
average of the high and low reported sale prices of the Registrant's
Common Stock on the New York Stock Exchange Inc. Composite Tape on
October 7, 1999.
(2) Calculated by multiplying the aggregate offering amount by .000278.
(3) The Series A Preferred Stock Purchase Rights of CBS are attached to and
trade with the shares of CBS Common Stock being registered hereby. The
value attributable to such Series A Preferred Stock Purchase Rights, if
any, is reflected in the market price of CBS Common Stock.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment that specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
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The information in this Prospectus is not complete and may be changed. The
selling shareholder may not sell these securities until the registration
statement filed with the Securities and Exchange Commission relating to
these securities is effective. This Prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
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PROSPECTUS SUBJECT TO COMPLETION,
October 12, 1999
10,141,691 SHARES
CBS CORPORATION
COMMON STOCK
------------------------------------
This Prospectus relates to the proposed sale from time to time of up
to an aggregate of 10,141,691 shares of common stock of CBS Corporation, a
Pennsylvania corporation, by a selling shareholder. The selling shareholder
acquired shares of CBS Series B Participating Preferred Stock in connection
with the acquisition by CBS from the selling shareholder of television
broadcast station KTVT-TV, Fort Worth/Dallas, Texas, on October 12, 1999.
The preferred stock is convertible by the selling shareholder into our
common stock at any time and this Prospectus relates to the shares of our
common stock issuable to the selling shareholder upon conversion of the
preferred stock.
In connection with this acquisition, we agreed to register this
offering of shares for the benefit of the selling shareholder.
The selling shareholder may sell all or any portion of the shares of
our common stock in one or more transactions on a stock exchange on which
the shares are listed, an underwritten offering or in private, negotiated
transactions. The selling shareholder will determine the prices at which it
sells the shares. We will not receive any of the proceeds from the sale of
the shares by the selling shareholder, but we will pay all registration
expenses. The selling shareholder will pay any underwriting discounts and
selling commissions in connection with the sale of the shares and, in
certain circumstances, marketing expenses incurred in connection with an
underwritten offering of the shares.
On October 6, 1999, 705,713,187 shares of our common stock were
outstanding. Our common stock is listed on the New York Stock Exchange
under the symbol "CBS." On October 11, 1999, the last reported sale price
of our common stock on the New York Stock Exchange was $48.81 per share.
We may amend or supplement this Prospectus from time to time by filing
amendments or supplements as required. You should read this entire
Prospectus and any amendments or supplements carefully before you make your
investment decision.
Our principal executive offices are located at 51 West 52nd Street,
New York, New York 10019. Our telephone number is (212) 975-4321.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this Prospectus. Any representation
to the contrary is a criminal offense.
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The date of this Prospectus is [ ], 1999.
<PAGE>
TABLE OF CONTENTS
Page
Where You Can Find More Information.......................................3
Special Note Regarding Forward-looking Statements.........................4
Recent Developments.......................................................5
Use of Proceeds...........................................................5
Selling Shareholder.......................................................5
Plan of Distribution......................................................7
Legal Matters.............................................................9
Experts...................................................................9
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read
and copy any document we file at the SEC's Public Reference Room at 450
Fifth Street N.W., Washington, D.C. 20549. Please call 1-800-SEC-0330 for
further information on the operation of the Public Reference Room. Reports,
proxy statements and other information regarding issuers that file
electronically with the SEC, including our filings, are also available to
the public from the SEC's web site at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information in
documents we file with them, which means that we can disclose important
business and financial information about us to you that is not included in
or delivered with this Prospectus by referring you to those documents.
The information incorporated by reference is considered to be part of
this Prospectus. Information that we file later with the SEC will
automatically update and supersede this information. We incorporate by
reference the documents listed below and any filing we will make with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 following the date of this Prospectus:
o Annual Report on Form 10-K, as amended by Form 10-K/A, for the
year ended December 31, 1998
o Quarterly Report on Form 10-Q, as amended by Form 10-Q/A, for the
quarterly period ended March 31, 1999, and Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1999
o Current Reports on Form 8-K filed on January 29, 1999, February
5, 1999, April 1, 1999, April 13, 1999, April 30, 1999, June 4,
1999, June 28, 1999, July 30, 1999, August 4, 1999, September 8,
1999, September 15, 1999, October 8, 1999 (including King World
Productions, Inc. historical financial statements), October 8,
1999 (including Viacom Inc. historical financial statements) and
October 12, 1999 (including amended and restated Viacom/CBS
merger agreement)
o Description of risk factors contained in our Registration
Statement on Form S-4 (Registration Statement No. 333-84761),
filed on August 9, 1999
o Description of risk factors and unaudited pro forma financial
information relating to the Viacom Inc./CBS and the CBS/King
World Productions, Inc. transactions contained in our Preliminary
Joint Proxy Statement dated October 7, 1999, filed in connection
with our pending merger with Viacom Inc.
o Description of our common stock contained in our Registration
Statement on Form 10 dated May 15, 1935
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Louis J. Briskman, Esq.
Executive Vice President
and General Counsel
CBS Corporation
51 West 52nd Street
New York, New York 10019
Telephone requests may be directed to (212) 975-4321.
<PAGE>
We have not authorized anyone to give any information or make any
representation about us that differs from or adds to the information in
this Prospectus or in our documents or the documents that we publicly file
with the SEC. Therefore, if anyone does give you different or additional
information, you should not rely on it.
If you are in a jurisdiction where it is unlawful to offer to exchange
or sell, or to ask for offers to exchange or sell, the securities offered
by this Prospectus, or if you are a person to whom it is unlawful to direct
such activities, then the offer presented by this Prospectus does not
extend to you.
The information contained in this Prospectus speaks only as of its
date unless the information specifically indicates that another date
applies.
SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference in this
Prospectus contain both historical and forward-looking statements. All
statements other than statements of historical fact are, or may be deemed
to be, forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements are not based on historical facts,
but rather reflect CBS' current expectations concerning future results and
events. These forward-looking statements generally can be identified by
use of statements that include phrases such as "believe," "expect,"
"anticipate," "intend," "plan," "foresee," "likely," "will" or other
similar words or phrases. Similarly, statements that describe our
objectives, plans or goals are or may be forward-looking statements. These
forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of CBS to be different from any future results, performance
and achievements expressed or impled by these statements. You should review
carefully all information, including the financial statements and the notes
to the financial statements, included or incorporated by reference in this
Prospectus.
The following important factors could affect future results, causing
these results to differ materially from those expressed in our
forward-looking statements:
o the timing, impact and other uncertainties related to pending and
future acquisitions by CBS and the Viacom transaction;
o the ability of CBS to develop and acquire television programming
and to attract and retain advertisers;
o the ability of CBS to increase audience share for its programs,
particularly in key demographic segments;
o the ability of CBS to renew existing programming, licensing and
distribution agreements and to enter into new agreements;
o the success of CBS and its suppliers and customers in achieving
year 2000 compliance;
o the impact of significant competition from both the over-the-air
broadcast stations and programming alternatives such as cable
television, wireless cable, in-home satellite distribution
services and pay-per-view and home video entertainment services;
o the impact of new technologies;
o changes in laws or rules or regulations of a governmental agency,
including the Federal Communications Commission regulations;
<PAGE>
o dependence upon affiliation agreements;
o expenditures by advertisers tend to be seasonal and cyclical;
o changes in tax requirements, including tax rate changes, new tax
laws and revised tax law interpretations; and
o interest rate fluctuations and other capital market conditions.
These factors are not necessarily all of the important factors that
could cause actual results to differ materially from those expressed in any
of our forward-looking statements. Other unknown or unpredictable factors
also could have material adverse effects on our future results. The
forward-looking statements included or incorporated by reference in this
Prospectus are made only as of the date of this Prospectus and under
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 we do not have any obligation to publicly update any
forward-looking statements to reflect subsequent events or circumstances.
We cannot assure you that projected results or event will be achieved.
RECENT DEVELOPMENTS
On September 6, 1999, we entered into an agreement with Viacom Inc.
("Viacom") providing for the merger of CBS and Viacom, and that agreement
was amended and restated as of October 8, 1999. Under the terms of the
amended and restated merger agreement, our shareholders will receive, for
each share of our common stock, 1.085 shares of Viacom non-voting Class B
common stock and for each share of our Series B Participating Preferred
Stock, 1.085 shares of Viacom Series C Preferred Stock. The transaction is
subject to a number of closing conditions, including Federal Communications
Commission approval, expiration of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 waiting period and the adoption of the amended and
restated merger agreement by our shareholders. We expect the merger to
close sometime during the first half of 2000. You may access our Form 8-K
filed on October 12, 1999 for a copy of the amended and restated CBS/Viacom
merger agreement and additional information regarding the merger. See
"Where You Can Find More Information."
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by
the selling shareholder.
SELLING SHAREHOLDER
The following table sets forth the total number of shares of our
common stock the selling shareholder would own upon conversion of all the
shares of our Series B Participating Preferred Stock owned by the selling
shareholder. Because the selling shareholder may offer all or any portion
of the shares of our common stock pursuant to the offering contemplated by
this Prospectus, we can provide no estimate as to the exact number of
shares the selling shareholder will hold after completion of this offering.
The selling shareholder has not had any material relationship with CBS
(other than as described below or in connection with the acquisition of
KTVT-TV from the selling shareholder) within the past three years. All such
information has been provided to us by the selling shareholder.
<PAGE>
Number
of Shares Percent of Number of Shares
Name of Selling Beneficially Outstanding Registered For
Shareholder Owned Shares(1) Sale Hereby
Gaylord Entertainment
Company 10,141,691(2) 1.4% 10,141,691
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1 Percent of total shares of our common stock outstanding as of October 6,
1999.
2 The number of shares beneficially owned is determined under rules
promulgated by the SEC, and the information is not necessarily indicative
of beneficial ownership for any other purpose. The number of shares
beneficially owned excludes any shares of our common stock that might be
beneficially owned by directors, executive officers or more than 5%
shareholders of the selling shareholder.
In September 1997, we acquired The Nashville Network and Country Music
Television through a merger with the former parent of the selling
shareholder, in which approximately 59 million shares of our common stock
were issued to the shareholders of that former parent. In connection with
that transaction, we entered into certain arrangements with the selling
shareholder, including indemnification, services and non-competition
agreements, that are still in effect as of the date of this Prospectus. In
addition, prior to the closing of our acquisition of television broadcast
station KTVT-TV described below, we had a television network broadcasting
affiliation agreement with the selling shareholder relating to KTVT-TV. We
also had a television network broadcasting affiliation agreement with the
selling shareholder relating to KSTW-TV until June 1997.
On October 12, 1999, upon the closing of our acquisition of KTVT-TV
from the selling shareholder, we issued to the selling shareholder
10,141.691 shares of our Series B Participating Preferred Stock. The
preferred stock is convertible by the selling shareholder at any time prior
to the consummation of the CBS/Viacom transaction into a total of
10,141,691 shares of our common stock. Under the terms of the merger
agreement, as amended, governing this transaction, we agreed to register
the resale of the shares of our common stock issuable to the selling
shareholder upon conversion of the preferred stock and to keep the
registration statement covering that transaction, of which this Prospectus
is a part, effective for up to two years. The merger agreement provides
that we may suspend the use of this Prospectus for a period or periods not
to exceed 40 trading days in the aggregate in any 12 month period if we
determine in good faith that a suspension is necessary to avoid public
disclosures (a) that would interfere or materially adversely affect the
negotiation or completion of any acquisitions or divestitures or (b) of
pending corporate developments of a nature that would require public
disclosure, provided that we will use our reasonable best efforts to keep
the length of any blackout period to no more than ten consecutive trading
days.
For the period ending October 12, 2000, if we exercise our right to
suspend the use of this Prospectus, we have agreed to indemnify the selling
shareholder in accordance with the following (without duplication):
o the selling shareholder must have previously notified us in
writing of its intention to sell any or all of the shares, and
the selling shareholder must actually sell those shares during
the 12 month period immediately following the end of the relevant
blackout period and, either,
o if the blackout period exceeds ten consecutive trading days, the
selling shareholder must suffer a loss on the sale of the shares,
measured on a per share basis as the excess, if any, of (1) the
lower of (a) the closing price per share of our common stock on
the day the selling shareholder receives notice of suspension of
the use of this Prospectus and (b) $47.8224 over (2) the higher
of (a) the closing price per share of our common stock on the
trading day
<PAGE>
immediately following the last day of the blackout period and (b)
the price per share (for each relevant sale) at which the selling
shareholder actually sells the shares minus the applicable per
share selling discount or commission, if any, up to a maximum
indemnity of $7 million, or
o if the aggregate number of trading days in all blackout periods
exceeds 40, the selling shareholder must suffer a loss on the
sale of the shares, measured on a per share basis as the excess,
if any, of (1) $47.8224 over (2) the higher of (a) the closing
price per share of our common stock on the trading day
immediately following the last day of the last of such blackout
periods and (b) the price per share (for each relevant sale) at
which the selling shareholder actually sells the shares minus the
applicable per share selling discount or commission, if any.
In addition, we have also agreed to indemnify the selling shareholder
if there is a determination that our acquisition of KTVT-TV is taxable to
the selling shareholder as a result of our breach of certain
representations, warranties or covenants that we made to the selling
shareholder in connection with the acquisition. The amount of the indemnity
is calculated as the excess of the actual tax liability to the selling
shareholder resulting from the transaction over the tax liability that
would have resulted had we not breached those representations, warranties
or covenants. However, the amount of the indemnity is reduced to the extent
the selling shareholder disposes of the preferred stock, or any security
received in exchange for the preferred stock, within ten years of the
closing of our acquisition of KTVT-TV. Furthermore, our indemnity is not
applicable if the selling shareholder has materially contributed in certain
respects to the determination that the acquisition is taxable to the
selling shareholder. However, in the event that this indemnity is not
applicable but we receive a depreciable cost basis in the KTVT-TV assets,
we will be required to pay $40 million to the selling shareholder.
PLAN OF DISTRIBUTION
We are registering this offering of shares on behalf of the selling
shareholder. We will pay all costs, expenses and fees related to this
registration, including all registration and filing fees, printing
expenses, fees and disbursements of our counsel and the selling
shareholder's counsel, blue sky fees and expenses and, if we request that
the selling shareholder effect an underwritten public offering of any of
the shares covered by this Prospectus, all "road show" and other marketing
expenses incurred by us or any underwriters that are not otherwise paid by
the underwriters. These costs, expenses and fees are estimated to total
approximately $[o]. The selling shareholder will pay any underwriting
discounts and selling commissions in connection with the sale of the shares
and, if the selling shareholder elects to effect an underwritten public
offering of the shares covered by this Prospectus, all "road show" and
other marketing expenses incurred by us or any underwriters that are not
otherwise paid by the underwriters.
The selling shareholder may sell the shares from time to time in one
or more transactions on one or more exchanges or in alternative trading
markets or otherwise, at prices and at terms then prevailing or at prices
related to the then current market price, or in negotiated transactions.
The selling shareholder will determine the prices at which it sells the
shares in these transactions. The selling shareholder may effect these
transactions by selling the shares to or through broker-dealers. In
effecting sales, broker-dealers engaged by the selling shareholder may
arrange for other broker-dealers to participate in the resales. The shares
may be sold by one or more, or a combination, of the following:
o a firm commitment underwritten public offering,
<PAGE>
o a block trade in which the broker-dealer attempts to sell the
shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction,
o purchases by a broker-dealer as principal and resale by the
broker- dealer for its account pursuant to this Prospectus,
o an exchange distribution in accordance with the rules of the
applicable exchange,
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers and
o privately negotiated transactions.
The selling shareholder may enter into hedging transactions with
broker-dealers. In these transactions, broker-dealers may engage in short
sales of our common stock in the course of hedging the positions they
assume with the selling shareholder. The selling shareholder also may sell
our common stock short pursuant to this Prospectus and redeliver the shares
to close out these short positions. The selling shareholder may enter into
option or other transactions with broker-dealers that require the delivery
to the broker-dealer of the shares. The broker-dealer may then resell or
otherwise transfer the shares pursuant to this Prospectus. The selling
shareholder also may loan or pledge the shares to a broker-dealer. The
broker-dealer may then sell the loaned shares or, upon a default by the
selling shareholder, the broker-dealer may sell the pledged shares pursuant
to this Prospectus.
The selling shareholder may engage in other financing transactions
that may include forward contract transactions or borrowings from financial
institutions in which the shares are pledged as security. In connection
with any of these forward contract transactions, the selling shareholder
would pledge the shares to secure its obligations and the counterparty to
these transactions would sell our common stock short to hedge its
transaction with the selling shareholder. Upon a default by the selling
shareholder under any of these financings, including a forward contract
transaction, the pledgee or its transferee may sell the pledged shares
pursuant to this Prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling shareholder. Broker-
dealers or agents may also receive compensation from the purchasers of the
shares for whom they act as agents or to whom they sell as principals, or
both. Compensation to a particular broker-dealer may be in excess of
customary commissions and will be in amounts to be negotiated in connection
with the sale. Broker-dealers or agents and any other participating
broker-dealers or the selling shareholder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act of
1933 in connection with sales of the shares. Accordingly, any commission,
discount or concession received by them and any profit on the resale of the
shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act of 1933. Because the selling
shareholder may be deemed to be an "underwriter" within the meaning of
Section 2(11) of the Securities Act of 1933, the selling shareholder will
be subject to the prospectus delivery requirements of the Securities Act of
1933. The selling shareholder has advised us that it has not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the shares.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from
registration or qualification is available and is complied with.
The selling shareholder will be subject to applicable provisions of
the Securities Exchange Act of 1934 and their associated rules and
regulations,
<PAGE>
including Regulation M, which provisions may limit the timing of purchases
and sales of shares of our common stock by the selling shareholder. We will
make copies of this Prospectus available to the selling shareholder and
have informed it of the need for delivery of copies of this Prospectus to
purchasers at or prior to the time of any sale of the shares.
We will file a supplement to this Prospectus, if required, pursuant to
Rule 424(b) under the Securities Act of 1933 upon being notified by the
selling shareholder that any material arrangement has been entered into
with an underwriter or a broker-dealer for the sale of the shares through
an underwritten offering or a block trade, special offering, exchange
distribution or secondary distribution, purchase by a broker or dealer or
hedging or financing transaction with the selling shareholder. The
supplement will disclose:
o the name of each underwriter or participating broker-dealer,
o the number of shares involved,
o the price at which the shares will be sold,
o any commissions paid or discounts or concessions allowed to
underwriters or broker-dealers,
o if applicable, that the broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated
by reference in this Prospectus and
o other facts material to the transaction.
The selling shareholder may agree to indemnify any underwriter,
broker-dealer or agent that participates in transactions involving sales of
the shares against certain liabilities, including liabilities arising under
the Securities Act of 1933. We have agreed to indemnify the selling
shareholder and any underwriters against certain liabilities in connection
with the offering of the shares, including liabilities arising under the
Securities Act of 1933.
LEGAL MATTERS
Louis J. Briskman, Esq., our Executive Vice President and General
Counsel, has passed upon the validity with respect to the issuance of our
shares of common stock offered by this Prospectus. As of October 12, 1999,
Mr. Briskman beneficially owned 397,252 shares of our common stock,
including 395,000 shares of our common stock issuable upon the exercise of
stock options.
EXPERTS
The consolidated financial statements and the related financial
statement schedule of CBS, as of December 31, 1998 and 1997 and for each of
the years in the three year period ended December 31, 1998, incorporated by
reference in this Prospectus from CBS' Form 10-K, as amended by Form
10-K/A, for the year ended December 31, 1998, have been audited by KPMG
LLP, independent auditors, as stated in their reports, which are
incorporated in this document by reference, and have been so incorporated
in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing.
The consolidated financial statements of King World Productions, Inc.,
as of August 31, 1998 and 1997 and for each of the years in the three year
period ended August 31, 1998, incorporated by reference in this Prospectus
from CBS' Form 8-K dated October 8, 1999, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report
with respect thereto and is incorporated by reference in this document in
reliance upon the authority of said firm as experts in giving said report.
<PAGE>
The consolidated financial statements of Viacom Inc., as of December
31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998, incorporated by reference in this Prospectus from CBS'
Form 8-K dated October 8, 1999, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of that firm as experts in auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
o The following table sets forth the costs and expenses payable
by us in connection with the registration of the offering of the
shares. All expenses other than the SEC registration fee are
estimates. The selling shareholder will pay all costs and expenses of
selling its shares, including any underwriting discounts and selling
commissions and, if the selling shareholder (rather than CBS) at its
election undertakes to sell the shares in an underwritten offering,
all "road show" and other marketing expenses incurred by us or any
underwriters which are not otherwise paid by such underwriters.
SEC Registration Fee........................... ....... $
Accounting Fees and Expenses...........................
Legal Fees and Expenses................................
Printing Fees and Expenses.............................
Miscellaneous Expenses.................................
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Total................................ $
==================
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
CBS is incorporated under the laws of the Commonwealth of
Pennsylvania.
Section 1741 of the Pennsylvania Business Corporation Law ("PBCL")
empowers a Pennsylvania corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or proceeding (a "Proceeding"), whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation), by reason of the fact that such person is or was a
representative of the corporation or is or was serving at the request of
the corporation as a representative of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him or her in
connection with such Proceeding, if he or she acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal proceeding,
had no reasonable cause to believe his or her conduct was unlawful. Section
1742 of the PBCL empowers a corporation to indemnify any person who was or
is a party, or is threatened to be made a party, to any threatened, pending
or completed action by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
representative of the corporation or is or was serving at the request of
the corporation as a representative of another corporation or enterprise,
against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with the defense or settlement of the
action if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, provided that indemnification will not be made in
<PAGE>
respect of any claim, issue or matter as to which such person has been
adjudged to be liable to the corporation unless there is a judicial
determination that in view of all the circumstances of the case, the person
is fairly and reasonably entitled to indemnity for the expenses that the
court deems proper.
Section 1743 of the PBCL provides that to the extent that a
representative of a corporation has been successful on the merits or
otherwise in defense of any Proceeding, or in defense of any claim, issue
or matter therein, he or she will be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him or her
in connection therewith.
Section 1745 of the PBCL provides that expenses (including attorneys'
fees) incurred in defending a Proceeding may be paid by the corporation in
advance of the final disposition of such Proceeding upon receipt of an
undertaking by or on behalf of the representative to repay such amount if
it is ultimately determined that he or she is not entitled to be
indemnified by the corporation.
Section 1746 of the PBCL provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
sections of the PBCL will not be deemed exclusive of any other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of shareholders or disinterested
directors or otherwise. However, Section 1746 also provides that such
indemnification will not be made in any case where the act or failure to
act giving rise to the claim for indemnification is determined by a court
to have constituted willful misconduct or recklessness.
We provide for indemnification of our directors and officers pursuant
to Article ELEVEN of our Articles of Incorporation and Article XVII(B) of
our By-laws. Article ELEVEN of our Articles of Incorporation and Article
XVII(B) of our By-laws provide in effect that, with respect to Proceedings
based on acts or omissions on or after January 27, 1987, and unless
prohibited by applicable law, we will indemnify directors and officers
against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement incurred in connection with any such Proceedings
(subject to certain limitations in the case of actions by such persons
against us). Under Article XVII(B), we will also advance amounts to any
director or officer during the pendency of any such Proceedings against
expenses incurred in connection with such Proceedings, provided that, if
required by law, we receive an undertaking to repay such amount if it is
ultimately determined that such person is not entitled to be indemnified
under such Article. The indemnification provided for in such Articles is in
addition to any rights to which any director or officer may otherwise be
entitled. Article XVII(B) of our By-laws provides that the right of a
director or officer to such indemnification and advancement of expenses
will be a contract right and further provides procedures for the
enforcement of such right.
As authorized by Article ELEVEN of our Articles of Incorporation, we
have purchased directors' and officers' liability insurance policies
indemnifying our directors and officers and the directors and officers of
our subsidiaries against claims and liabilities (with stated exceptions) to
which they may become subject by reason of their positions with us or our
subsidiaries as directors and officers.
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Merger dated as of March 31, 1999, as
amended by Amendment No. 1 dated September 8, 1999, by and
among CBS, King World Productions, Inc. and K Acquisition
Corp., incorporated by reference to Annex A to the Proxy
Statement/Prospectus dated August 9, 1999, which forms a
part of our Registration Statement on Form S-4 (Registration
No. 333-84761) filed on August 9, 1999, and our Form 8-K
dated September 15, 1999
<PAGE>
2.2 Agreement and Plan of Merger dated as of April 9, 1999 by
and among CBS, Gaylord Entertainment Company, Gaylord
Television Company, Gaylord Communications, Inc., CBS Dallas
Ventures, Inc. and CBS Dallas Media, Inc.
2.2 Agreement and Plan of Merger dated as of April 9, 1999 by
and among CBS, Gaylord Entertainment Company, Gaylord
Television Company, Gaylord Communications, Inc., CBS Dallas
Ventures, Inc. and CBS Dallas Media, Inc.
2.3 First Amendment dated as of October 8, 1999, to the
Agreement and Plan of Merger filed herewith as Exhibit 2.2
2.4 Amended and Restated Tax Matters Agreement dated as of
October 8, 1999, by and among CBS, Gaylord Entertainment
Company, Gaylord Television Company and Gaylord
Communications, Inc.
2.5 Amended and Restated Agreement and Plan of Merger dated as
of October 8, 1999 by and among CBS Corporation and Viacom
Inc., incorporated by reference to our Form 8-K dated
October 12, 1999
3.1 Restated Articles of Incorporation of CBS, as amended to
December 11, 1997, incorporated by reference to Exhibit 3(b)
to our Form 10-K for the year ended December 31, 1997, and
the Statement With Respect to Shares that forms a part of
our Restated Articles of Incorporation and is filed herewith
3.2 By-laws of CBS, as amended to May 4, 1999, incorporated by
reference to Exhibit 3(b) to our Form 10-Q for the quarterly
period ended June 30, 1999
4.1 The rights of holders of our common stock set forth in our
Restated Articles of Incorporation and By-laws that are
included in Exhibits 3.1 and 3.2.
4.2 The rights of holders of our Series A Preferred Stock
Purchase Rights set forth in our Rights Agreement that is
incorporated by reference to Exhibit 1 to our Form 8-A filed
on January 9, 1996.
5.1 Opinion of Louis J. Briskman, Esq.
23.1 Consent of KPMG LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of PricewaterhouseCoopers LLP
23.4 Consent of Louis J. Briskman, Esq. (included in opinion
filed as Exhibit 5.1)
24.1 Power of Attorney (included in signature page)
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the Prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement; provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with
or furnished to the Securities and Exchange Commission by the
Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated
by reference in this Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized in the City of New York, State of New York on
October 12, 1999.
CBS CORPORATION,
Registrant
by
/s/ Fredric G. Reynolds
-----------------------------------
Fredric G. Reynolds
Executive Vice President
and Chief Financial Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mel Karmazin, Fredric G. Reynolds,
Louis J. Briskman and Robert G. Freedline, and each of them, with full
power to act without the other, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to
sign any or all amendments to this Registration Statement, and to file the
same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------ ------------------- ------------------
/s/ George H. Conrades
- ------------------------ Director October 12, 1999
George H. Conrades
/s/Martin C. Dickinson
- ------------------------ Director October 12, 1999
Martin C. Dickinson
/s/William H. Gray III
- ------------------------ Director October 12, 1999
William H. Gray III
/s/Mel Karmazin
- ------------------------ President and Chief October 12, 1999
Mel Karmazin Executive Officer and
Director (principal
executive officer)
/s/Jan Leschly
- ------------------------ Director October 12, 1999
Jan Leschly
/s/Leslie Moonves
- ------------------------ President and Chief October 12, 1999
Leslie Moonves Executive Officer, CBS
Television, and Director
/s/David T. McLaughlin
- ------------------------ Chairman and Director October 12, 1999
David T. McLaughlin
/s/Richard R. Pivirotto
- ------------------------ Director October 12, 1999
Richard R. Pivirotto
/s/Raymond W. Smith
- ------------------------ Director October 12, 1999
Raymond W. Smith
/s/Dr. Paula Stern
- ------------------------ Director October 12, 1999
Dr. Paula Stern
/s/Robert D. Walter
- ------------------------ Director October 12, 1999
Robert D. Walter
/s/Fredric G. Reynolds
- ------------------------ Executive Vice President October 12, 1999
Fredric G. Reynolds and Chief Financial Officer
(principal financial officer)
<PAGE>
/s/Robert G. Freedline
- ------------------------ Vice President and October 12, 1999
Robert G. Freedline Controller (principal
accounting officer)
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Merger dated as of March 31,
1999, as amended by Amendment No. 1 dated
September 8, 1999, by and among CBS, King World
Productions, Inc. and K Acquisition Corp.,
incorporated by reference to Annex A to the Proxy
Statement/Prospectus dated August 9, 1999, which
forms a part of our Registration Statement on Form
S-4 (Registration No. 333-84761) filed on August
9, 1999, and our Form 8-K dated September 15, 1999
2.2 Agreement and Plan of Merger dated as of April 9,
1999 by and among CBS, Gaylord Entertainment
Company, Gaylord Television Company, Gaylord
Communications, Inc., CBS Dallas Ventures, Inc.
and CBS Dallas Media, Inc.
2.3 First Amendment dated as of October 8, 1999, to
the Agreement and Plan of Merger filed herewith as
Exhibit 2.2
2.4 Amended and Restated and Tax Matters Agreement
dated as of October 8, 1999, by and among CBS,
Gaylord Entertainment Company, Gaylord Television
Company and Gaylord Communications, Inc.
2.5 Amended and Restated Agreement and Plan of Merger
dated as of October 8, 1999 by and among CBS
Corporation and Viacom Inc., incorporated by
reference to our Form 8-K dated October 12, 1999
3.1 Restated Articles of Incorporation of CBS, as
amended to December 11, 1997, incorporated by
reference to Exhibit 3(b) to our Form 10-K for the
year ended December 31, 1997, and the Statement
With Respect to Shares that forms a part of our
Restated Articles of Incorporation and is filed
herewith
3.2 By-laws of CBS, as amended to May 4, 1999,
incorporated by reference to Exhibit 3(b) to our
Form 10-Q for the quarterly period ended June 30,
1999
4.1 The rights of holders of our common stock set
forth in our Restated Articles of Incorporation
and By-laws that are included in Exhibits 3.1 and
3.2.
4.2 The rights of holders of our Series A Preferred
Stock Purchase Rights set forth in our Rights
Agreement that is incorporated by reference to
Exhibit 1 to our Form 8-A filed on January 9,
1996.
5.1 Opinion of Louis J. Briskman, Esq.
23.1 Consent of KPMG LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of PricewaterhouseCoopers LLP
23.4 Consent of Louis J. Briskman, Esq. (included in
opinion filed as Exhibit 5.1)
24.1 Power of Attorney (included in signature page)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GAYLORD ENTERTAINMENT COMPANY,
GAYLORD TELEVISION COMPANY,
GAYLORD COMMUNICATIONS, INC.,
CBS CORPORATION,
CBS DALLAS VENTURES, INC.
AND
CBS DALLAS MEDIA, INC.
<PAGE>
i
TABLE OF CONTENTS
SECTION 1. BASIC PROVISIONS............................................2
SECTION 1.1. MERGERS................................................2
SECTION 1.2. CLOSING................................................2
SECTION 1.3. EFFECTIVE TIME.........................................2
SECTION 1.4. EFFECTS OF THE MERGERS.................................3
SECTION 1.5. ARTICLES AND CERTIFICATE OF INCORPORATION..............3
SECTION 1.6. BYLAWS.................................................3
SECTION 1.7. OFFICERS AND DIRECTORS OF SURVIVING CORPORATIONS.......3
SECTION 1.8. EFFECT ON CAPITAL STOCK OF THE MERGING COMPANIES.......4
SECTION 1.9. ISSUANCE OF CBS COMMON STOCK...........................4
SECTION 1.10. COMMERCIAL SPOTS......................................4
SECTION 1.11. TAX MATTERS AGREEMENT.................................5
SECTION 1.12. PRORATION OF CAPITAL EXPENDITURES.....................5
SECTION 1.13. PRORATION OF CURRENT ASSETS AND LIABILITIES...........6
SECTION 2. REPRESENTATIONS AND WARRANTIES OF GAYLORD...................9
SECTION 2.1. ORGANIZATION; QUALIFICATION; POWER.....................9
SECTION 2.2. AUTHORITY; ABSENCE OF CONFLICTING AGREEMENTS...........9
SECTION 2.3. CAPITALIZATION; OWNERSHIP.............................11
SECTION 2.4. FINANCIAL STATEMENTS..................................11
SECTION 2.5. ABSENCE OF MATERIAL ADVERSE EFFECT....................12
SECTION 2.6. TAXES.................................................12
SECTION 2.7. PERMITS...............................................13
SECTION 2.8. REAL PROPERTY.........................................14
SECTION 2.9. ASSETS OTHER THAN REAL PROPERTY.......................15
SECTION 2.10. ASSETS AND LIABILITIES OF THE LIMITED PARTNERSHIP....16
SECTION 2.11. EMPLOYEES............................................16
SECTION 2.12. EMPLOYMENT AND SIMILAR AGREEMENTS....................16
SECTION 2.13. ERISA................................................16
SECTION 2.14. LABOR MATTERS........................................17
SECTION 2.15. INTELLECTUAL PROPERTY................................17
SECTION 2.16. CONTRACTS............................................18
SECTION 2.17. STATUS OF CONTRACTS..................................21
SECTION 2.18. LITIGATION...........................................21
SECTION 2.19. COMPLIANCE WITH APPLICABLE LAWS......................21
SECTION 2.20. ENVIRONMENTAL MATTERS................................21
SECTION 2.21. FCC MATTERS..........................................22
SECTION 2.22. NO FINDER............................................23
SECTION 2.23. INSURANCE............................................23
SECTION 2.24. YEAR 2000............................................23
SECTION 2.25. TRANSACTIONS WITH AFFILIATES.........................23
SECTION 2.26. CABLE MATTERS........................................23
SECTION 2.27. DIGITAL TELEVISION...................................24
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CBS......................24
SECTION 3.1. ORGANIZATION; QUALIFICATION; POWER....................25
SECTION 3.2. CBS COMMON STOCK TO BE ISSUED IN THIS TRANSACTION.....25
SECTION 3.3. AUTHORITY; ABSENCE OF CONFLICTING AGREEMENTS..........25
SECTION 3.4. SEC DOCUMENTS; UNDISCLOSED LIABILITIES................27
SECTION 3.5. NO FINDER.............................................27
SECTION 3.6. STATUS OF CBS AND THE CBS SUBSIDIARIES................27
SECTION 3.7. ABSENCE OF CERTAIN CHANGES OR EVENTS..................28
<PAGE>
ii
SECTION 3.8. LITIGATION............................................28
SECTION 3.9. COMPLIANCE WITH APPLICABLE LAWS.......................28
SECTION 3.10. INTERIM OPERATIONS OF THE CBS SUBSIDIARIES...........28
SECTION 3.11. TAXES................................................29
SECTION 4. ACTIONS PRIOR TO THE CLOSING DATE..........................29
SECTION 4.1. PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES...29
SECTION 4.2. FCC CONSENT; IMPROVEMENTS ACT APPROVAL................29
SECTION 4.3. OPERATIONS PRIOR TO THE CLOSING DATE..................30
SECTION 4.4. COLLECTION OF ACCOUNTS RECEIVABLE.....................34
SECTION 4.5. PUBLIC ANNOUNCEMENT...................................35
SECTION 4.6. COMPLIANCE WITH LAWS..................................35
SECTION 4.7. ADVICE OF CHANGES.....................................35
SECTION 4.8. NO SOLICITATION.......................................36
SECTION 4.9. OTHER CONSENTS........................................36
SECTION 4.10. NOTICE OF PROCEEDINGS................................36
SECTION 4.11. TRADE AGREEMENTS.....................................36
SECTION 4.12. CONFIDENTIALITY AGREEMENTS...........................37
SECTION 5. ADDITIONAL AGREEMENTS......................................37
SECTION 5.1. SALES, USE AND TRANSFER TAXES, TITLE INSURANCE........37
SECTION 5.2. EMPLOYEES; EMPLOYEE BENEFIT PLANS.....................37
SECTION 5.3. GAYLORD SUBSIDIARIES AND THE LIMITED PARTNERSHIP
TO CONTROL OPERATIONS PRIOR TO CLOSING DATE...39
SECTION 5.4. COPYRIGHT ROYALTY TRIBUNAL PAYMENTS...................39
SECTION 5.5. ACCESS TO INFORMATION.................................39
SECTION 5.6. REASONABLE BEST EFFORTS...............................40
SECTION 5.7. USE OF GAYLORD NAME...................................40
SECTION 5.8. ENVIRONMENTAL STUDY...................................41
SECTION 5.9. AGREEMENT NOT TO COMPETE..............................41
SECTION 5.10. WAIVER OF CERTAIN CLAIMS.............................42
SECTION 5.11. RECORDS..............................................42
SECTION 5.12. POST CLOSING MATTERS.................................42
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF CBS.................43
SECTION 6.1. CORPORATE ACTION......................................43
SECTION 6.2. WAITING PERIOD; NO RESTRAINT OR INJUNCTION...........43
SECTION 6.3. FCC CONSENT...........................................44
SECTION 6.4. REPRESENTATIONS AND WARRANTIES........................44
SECTION 6.5. NYSE LISTING..........................................44
SECTION 6.6. BREACH OF COVENANT BY GAYLORD.........................44
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF GAYLORD.............44
SECTION 7.1. CORPORATE ACTION......................................44
SECTION 7.2. WAITING PERIOD; NO RESTRAINT OR INJUNCTION...........45
SECTION 7.3. FCC CONSENT...........................................45
SECTION 7.4. REGISTRATION OF SHARES................................45
SECTION 7.5. NYSE LISTING..........................................45
SECTION 7.6. TAX MATTERS AGREEMENT BRING DOWN CERTIFICATE..........45
SECTION 7.7. NO MATERIAL ADVERSE CHANGE............................45
SECTION 7.8. TAX OPINION...........................................45
SECTION 7.9. BREACH OF COVENANT BY CBS.............................46
SECTION 8. INDEMNIFICATION............................................46
SECTION 8.1. INDEMNIFICATION BY GAYLORD............................46
SECTION 8.2. INDEMNIFICATION BY CBS................................47
SECTION 8.3. TERMINATION OF INDEMNIFICATION........................48
SECTION 8.4. PROCEDURES............................................48
<PAGE>
iii
SECTION 8.5. CERTAIN LIMITATIONS...................................50
SECTION 9. TERMINATION................................................50
SECTION 9.1. TERMINATION...........................................50
SECTION 9.2. SPECIFIC PERFORMANCE..................................51
SECTION 9.3. EFFECT OF TERMINATION.................................51
SECTION 10. GENERAL PROVISIONS........................................51
SECTION 10.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
OBLIGATIONS..........................................51
SECTION 10.2. CONFIDENTIAL NATURE OF INFORMATION...................51
SECTION 10.3. GOVERNING LAW........................................52
SECTION 10.4. NOTICES..............................................52
SECTION 10.5. SUCCESSOR AND ASSIGNS................................53
SECTION 10.6. ACCESS TO RECORDS AFTER CLOSING......................54
SECTION 10.7. ENTIRE AGREEMENT; AMENDMENTS.........................54
SECTION 10.8. INTERPRETATION.......................................54
SECTION 10.9. WAIVERS..............................................54
SECTION 10.10. EXPENSES............................................55
SECTION 10.11. PARTIAL INVALIDITY..................................55
SECTION 10.12. EXECUTION IN COUNTERPARTS...........................55
SECTION 10.13. DEFINITIONS.........................................55
SECTION 10.14. CONTROLLING PROVISIONS..............................61
SECTION 10.15. RISK OF LOSS........................................61
SECTION 10.16. RESOLUTION OF DISPUTES OVER SATISFACTION OF
CONDITIONS..........................................63
<PAGE>
1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of April 9, 1999 (the
"Agreement"), is made by and among GAYLORD ENTERTAINMENT COMPANY, a Delaware
corporation ("Gaylord"), GAYLORD TELEVISION COMPANY, a Delaware corporation
and a direct wholly owned subsidiary of Gaylord ("GTC"), GAYLORD
COMMUNICATIONS, INC., a Texas corporation and a direct wholly owned subsidiary
of Gaylord ("GCI") (GTC and GCI being sometimes referred to herein as the
"Gaylord Subsidiaries"), CBS CORPORATION, a Pennsylvania corporation ("CBS"),
CBS DALLAS VENTURES, INC., a Delaware corporation and a direct wholly owned
subsidiary of CBS ("CBS Dallas Ventures"), and CBS DALLAS MEDIA, INC., a
Delaware corporation and a direct wholly owned subsidiary of CBS ("CBS Dallas
Media") (CBS Dallas Ventures and CBS Dallas Media being sometimes referred to
herein as the "CBS Subsidiaries") (GTC, GCI, CBS Dallas Ventures and CBS
Dallas Media being sometimes referred to herein as the "Constituent
Corporations").
WITNESSETH:
WHEREAS, GAYLORD BROADCASTING COMPANY, L.P., a Texas limited partnership
formerly named New Gaylord Broadcasting, L.P. (the "Limited Partnership"), is
solely engaged in the business of owning and operating television broadcast
station KTVT-TV, Fort Worth/Dallas, Texas (the "Station");
WHEREAS, GCI is the sole general partner of the Limited Partnership, and
GTC is the sole limited partner of the Limited Partnership;
WHEREAS, the respective Boards of Directors of GCI and CBS Dallas
Ventures, and Gaylord and CBS as the respective sole stockholders of GCI and
CBS Dallas Ventures, have approved the merger (the "GCI Merger") of CBS Dallas
Ventures with and into GCI upon the terms and subject to the conditions set
forth in this Agreement, and such Boards of Directors have determined that the
GCI Merger is advisable and in the best interests of the respective
stockholders of GCI and CBS Dallas Ventures;
WHEREAS, the respective Boards of Directors of GTC and CBS Dallas Media,
and Gaylord and CBS as the respective sole stockholders of GTC and CBS Dallas
Media, have approved the merger (the "GTC Merger" and, together with the GCI
Merger, the "Mergers") of CBS Dallas Media with and into GTC upon the terms
and subject to the conditions set forth in this Agreement, and such Boards of
Directors have determined that the GTC Merger is advisable and in the best
interests of the respective stockholders of GTC and CBS Dallas Media;
WHEREAS, under the terms of this Agreement, each outstanding share of
common stock, no par value, of GCI (the "GCI Stock") issued and outstanding
immediately prior to the Effective Time, and each outstanding share of common
stock, par value $.001 per share, of GTC (the "GTC Stock") issued and
outstanding immediately prior to the Effective Time, shall be converted into
the right to receive common stock, par value $1.00 per share, of CBS (the "CBS
Common Stock"); and
WHEREAS, the parties intend that for federal income tax purposes each of
the Mergers qualifies as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
<PAGE>
2
NOW, THEREFORE, in consideration of the representations, warranties,
covenants, conditions and agreements hereinafter set forth, it is hereby
agreed among the parties as follows:
SECTION 1. BASIC PROVISIONS
SECTION 1.1. MERGERS
Upon the terms and subject to the conditions of this Agreement, and in
accordance with the Texas Business Corporation Act (the "TBCA") and the
Delaware General Corporation Law (the "DGCL"), at the Effective Time, CBS
Dallas Ventures shall be merged with and into GCI and the separate corporate
existence of CBS Dallas Ventures shall cease and GCI shall continue as the
"surviving corporation". Upon the terms and subject to the conditions of this
Agreement, and in accordance with the DGCL, at the Effective Time, CBS Dallas
Media shall be merged with and into GTC and the separate corporate existence
of CBS Dallas Media shall cease and GTC shall continue as the "surviving
corporation".
SECTION 1.2. CLOSING
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, the consummation
of the Mergers will take place on the third business day after the
satisfaction or (subject to applicable law) waiver of the conditions set forth
in Sections 6 and 7 (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date (as defined below)). The Closing shall be at
the offices of Skadden, Arps, Slate, Meagher & Flom, LLP, New York, New York
(the "Closing"), unless another date, time or place is agreed to in writing by
Gaylord and CBS. The date on which the Closing occurs shall be the "Closing
Date".
SECTION 1.3. EFFECTIVE TIME
As soon as practicable following the Closing, the parties shall (i) file
articles of merger (the "GCI Articles of Merger") with respect to the GCI
Merger in such form as is required by, and executed and verified in accordance
with, the relevant provisions of the TBCA to effectuate the GCI Merger, (ii)
obtain a certificate of merger from the Secretary of State of the State of
Texas to effectuate the GCI Merger, (iii) file a certificate of merger (the
"GCI Certificate of Merger") with respect to the GCI Merger in such form as is
required by, and executed in accordance with, the relevant provisions of the
DGCL to effectuate the GCI Merger, (iv) file a certificate of merger (the "GTC
Certificate of Merger") with respect to the GTC Merger in such form as is
required by, and executed in accordance with, the relevant provisions of the
DGCL to effectuate the GTC Merger and (v) make all other filings or recordings
required under the laws of Delaware and Texas to effectuate the Mergers. The
GCI Articles of Merger, the GCI Certificate of Merger and the GTC Certificate
of Merger shall specify that the GCI Merger or the GTC Merger, as applicable,
shall become effective at 11:59 p.m. on the Closing Date, or at such
subsequent time as Gaylord and CBS shall agree and as shall be specified in
the GCI Articles of Merger, the GCI Certificate of Merger and the GTC
Certificate of Merger (the date and time the respective Mergers become
effective being the "Effective Time").
<PAGE>
SECTION 1.4. EFFECTS OF THE MERGERS
At and after the Effective Time, the Mergers will have the effects set
forth, in the case of the GCI Merger, in Article 5.06 of the TBCA and in
Section 259 of the DGCL, and in the case of the GTC Merger, in Section 259 of
the DGCL.
SECTION 1.5. ARTICLES AND CERTIFICATE OF INCORPORATION
In the case of the GCI Merger, the articles of incorporation of GCI, as
in effect immediately prior to the Effective Time, shall be amended at the
Effective time so that Article 1 of such articles of incorporation reads in
its entirety as follows: "The name of this Corporation is 'CBS Dallas
Ventures, Inc.'", and, as so amended, such articles of incorporation shall be
the articles of incorporation of the surviving corporation of the GCI Merger
until thereafter changed or amended as provided therein or by applicable law.
In the case of the GTC Merger, the certificate of incorporation of GTC,
as in effect immediately prior to the Effective Time, shall be amended at the
Effective Time so that Article First of such certificate of incorporation
reads in its entirety as follows: "The name of this Corporation is 'CBS Dallas
Media, Inc.'", and, as so amended, such certificate of incorporation shall be
the certificate of incorporation of the surviving corporation of the GTC
Merger until thereafter changed or amended as provided therein or by
applicable law.
SECTION 1.6. BYLAWS
The bylaws of GCI, as in effect immediately prior to the Effective Time,
shall be the bylaws of the surviving corporation of the GCI Merger at the
Effective Time, and the bylaws of GTC, as in effect immediately prior to the
Effective Time, shall be the bylaws of the surviving corporation of the GTC
Merger at the Effective Time, in each case until thereafter changed or amended
as provided therein or by applicable law.
SECTION 1.7. OFFICERS AND DIRECTORS OF SURVIVING CORPORATIONS
At the Effective Time, the officers and directors of CBS Dallas Ventures
shall become the officers and directors of the surviving corporation of the
GCI Merger, and the officers and directors of CBS Dallas Media shall become
the officers and directors of the surviving corporation of the GTC Merger,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified. Immediately prior to the Effective
Time, Gaylord shall cause the then current officers and directors of GCI and
GTC to resign.
SECTION 1.8. EFFECT ON CAPITAL STOCK OF THE MERGING COMPANIES
As of the Effective Time, by virtue of the respective Mergers and without
any action on the part of any holder thereof: (i) each issued and outstanding
share of common stock, par value $1.00 per share, of CBS Dallas Ventures shall
be converted into and become one fully paid and nonassessable share of GCI
Stock; (ii) each issued and outstanding share of common stock, par value $1.00
per share, of CBS Dallas Media shall be converted into and become one fully
paid and nonassessable share of GTC Stock; and (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 CBS
Common Stock determined under Section 1.9 of this Agreement.
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4
SECTION 1.9. ISSUANCE OF CBS COMMON STOCK
As of the Effective Time, CBS shall issue and deliver to Gaylord one or
more certificates registered in the name of Gaylord evidencing in the
aggregate the number of shares (rounded to the nearest whole number) of CBS
Common Stock equal to the quotient of Four Hundred Eighty-five Million Dollars
($485,000,000) divided by the "Market Price". 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 Gaylord 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. Gaylord and CBS agree to
allocate one percent (1%) and ninety-nine percent (99%) of the CBS Common
Stock received by Gaylord hereunder to the GCI Stock and the GTC Stock,
respectively.
SECTION 1.10. COMMERCIAL SPOTS
For a period of ten years following the Closing Date, CBS shall cause the
Station to provide commercial advertising spots (the "Spots") to Gaylord, its
subsidiaries, and its Affiliates listed on Schedule 1.10 (to the extent such
parties remain Gaylord Affiliates at the applicable time) for goods or
services of the type offered as of the date hereof (i) by Gaylord and its
subsidiaries, and (ii) by Gaylord's Affiliates listed on Schedule 1.10 and as
set forth on Schedule 1.10. During the ten-year period, subject to CBS's
consent, such consent not to be unreasonably withheld, CBS shall also permit
the Spots to be used for future subsidiaries or Affiliates of Gaylord and for
additional goods or services of Gaylord or its current or future subsidiaries
or Affiliates. The Spots will be provided to Gaylord on the following terms
and conditions:
(a) During the ten-year period, CBS shall cause the Station to grant
to Gaylord an annual credit in a gross amount of $1 million, solely to be
applied toward the cost of the Spots.
(b) The cost for the Spots will be based upon schedules, which
schedules will include rates by program and by day-part no less favorable
than the average rates by program and by day- part negotiated by all
similarly significant cash-paying customers. It is the intention of the
parties that the Spots be placed on a substantially even basis throughout
the year, and that Gaylord will request the placement of Spots
accordingly, and that CBS shall use all reasonable efforts to accommodate
such Gaylord requests. The airing of the Spots will be subject to the
Station's normal sales practices including rates, prompt make-goods of
like value, and the normal level of preemptability for all similarly
significant cash-paying customers. Consistent with Station billing
practices, and in no event more than fifteen (15) days after the end of
the month in which any Spots air, CBS will cause the Station to provide
to Gaylord (i) an invoice which will detail the Spots which aired during
the previous month, including the date, time and value assigned to each
Spot, and (ii) written confirmation of its compliance with this Agreement
on a monthly basis consistent with its standard reporting policies for
other commercial advertisers on the Station, which written confirmation
shall include actual exhibition time and rate charged.
(c) Notwithstanding any of the foregoing, CBS may take such action
with respect to the Spots as necessary to comply with the reasonable
access by federal candidates and equal time for all candidates provisions
of the Communications Act relating to political broadcasting as well as
the FCC's rules and policies, applicable laws and CBS's standards and
practices.
(d) Any unused portion of each annual credit shall expire at the end
of the relevant year and shall not be carried forward to any subsequent
year, unless such credit is not used due to (i) the preemption or
rejection of Spots contemplated by this Section 1.10 or (ii) any other
reason which is outside the control of Gaylord. To the extent that any
credit exists after the end
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5
of any annual period for the reasons set forth in clause (i) or (ii),
such credit shall be carried forward to the immediately succeeding annual
period; to the extent any such credits are not fully used at the end of
the ten (10) year period, Gaylord shall be entitled to an additional
eighteen (18) month period during which it may use any such unused
credits, at the end of which any remaining credits will expire.
CBS and Gaylord agree that the fair market value of the annual credits
provided in this Section 1.10 is six million dollars ($6,000,000), it being
understood that the determination of the fair market value as provided herein
shall not alter the obligation of CBS to provide an annual credit of one
million dollars ($1,000,000) for a period of ten (10) years.
SECTION 1.11. TAX MATTERS AGREEMENT
The parties hereto shall, simultaneously with the execution of this
Agreement, enter into that certain Tax Matters Agreement attached hereto as
Exhibit A.
SECTION 1.12. PRORATION OF CAPITAL EXPENDITURES
Gaylord intends to make capital expenditures with respect to the Station,
in the ordinary course of business, on an as-needed basis in an amount not to
exceed $7,100,000 during the calendar year 1999. Gaylord shall be responsible
for 1/365th of this amount per day from January 1, 1999 until the Closing. At
the Closing, to the extent Gaylord has spent less than such pro rata amount,
Gaylord shall deliver the difference in cash to CBS, and, to the extent
Gaylord has spent more than such pro rata amount, CBS shall deliver the
difference in cash to Gaylord; provided, however, that (i) during the period
prior to the Closing, Gaylord agrees to consult with CBS and shall not make
any capital expenditures not otherwise necessary to the operation of the
Station in the ordinary course of business, (ii) to the extent Gaylord and CBS
agree to a revised amount of capital expenditures for calendar year 1999, the
proration referred to herein shall be applied to such revised amount, and
(iii) in no event shall CBS be obligated to pay to Gaylord more than $500,000
under the terms of this Section 1.12. If the Closing takes place after
December 31, 1999, an arrangement similar to that provided for in this Section
1.12 shall be agreed upon by the parties with respect to capital expenditures
in 2000.
SECTION 1.13. PRORATION OF CURRENT ASSETS AND LIABILITIES
(a) All current assets (excluding any assets to be transferred to
Gaylord or any of its Affiliates pursuant to Section 4.3(b)) and all
current liabilities (including accounts payable, bonus or other incentive
payments payable, other payables, accrued liabilities for talent, accrued
salaries and wages, accrued employee benefits, accrued expenses and
accrued deferred income or compensation, but excluding any liabilities or
expenses relating to Taxes, which are governed by the Tax Matters
Agreement, and any liabilities assumed by Gaylord pursuant to Section
4.3(b)) arising from the conduct of the business and operations of the
Station shall be prorated between Gaylord and CBS as of the Effective
Time, taking into account the elapsed time or consumption of an asset
during the month in which the Closing occurs. Such current assets and
current liabilities relating to the period prior to such date shall be
for the account of Gaylord and those relating to the period thereafter
shall be for the account of CBS, and shall be prorated accordingly.
(b) There shall be no proration of the payments due under the film
or programming license agreements other than for the calendar month in
which the Effective Time occurs, and
<PAGE>
6
except that Gaylord shall be responsible for any overdue amount under
such film or programming license agreements. Any such prorations shall be
based upon the due date for payments pursuant to the film and program
license agreements. For the purpose of determining the due date for
payments due under film or programming license agreements which are
silent as to the day of the month on which payment is due, such
agreements shall be deemed to provide that the payment is due on the date
payment is actually made during the month of Closing.
(c) The items included in the current assets and current liabilities
referred to above shall be the same items included in the line items
"Current assets" and "Current liabilities" on the balance sheet as of
February 28, 1999 included in the Financial Statements and such items
shall be calculated in accordance with GAAP except that accruals for
taxes and, subject to subparagraph (b) above, all film and programming
license agreements shall be excluded.
(d) At least five days prior to the Closing Date, Gaylord shall
provide CBS with an estimated balance sheet as of the Effective Time
setting forth a good faith estimate of the pro rata adjustments of
current assets and current liabilities contemplated by Section 1.13(a)
(and all information reasonably necessary to determine the accuracy of
such estimate) on the basis of the then most recently available month-end
financial statements of the Station. Any payment required to be made by
either party pursuant to such preliminary estimate shall be made by the
appropriate party at the Closing in accordance therewith, absent manifest
error. CBS shall be required to pay the amount of any current assets
prorated to Gaylord for which CBS will receive a corresponding benefit
after the Effective Time and which do not relate to the period prior to
the Effective Time. Gaylord shall be required to pay the amount of any
current liabilities prorated to CBS for which Gaylord received a
corresponding benefit prior to the Effective Time and which do not relate
to the period after the Effective Time.
(e) After the Effective Time, the Station shall continue with its
rights and obligations (including barter obligations) pursuant to the
License Agreement between the Station and Columbia Tristar Television
Division for Donnie and Marie dated July 2, 1998 and the License
Agreements with Paramount Pictures for Real TV for the 1998-1999 season
dated June 2, 1997 and for the 1999-2000 season dated June 29, 1998 (the
"Identified Agreements"); provided, however, that Gaylord shall be
responsible solely for any cash payments due under the provisions of the
Identified Agreements as in effect at the Effective Time; provided,
further, that upon the expiration of each of the Identified Agreements,
CBS shall promptly account for and pay to Gaylord one-half of gross
revenues net of agency commissions received by CBS with respect to each
Identified Agreement, it being understood that as part of the aforesaid
accounting, CBS shall promptly deliver written documentation confirming
the amount of gross revenues net of agency commissions received with
respect to each of the Identified Agreements. Under no circumstances will
the Station be required to exhibit the programs represented by the
Identified Agreements.
Within 60 days after the Closing Date, CBS shall prepare and deliver to
Gaylord the definitive final balance sheet setting forth final allocations and
related purchase price adjustments for the Station (the "Settlement
Statement") as of the Effective Time. During the 30-day period following
Gaylord's receipt of the Settlement Statement, Gaylord and its independent
auditors shall be permitted to review and make copies reasonably required of
(i) the working papers of CBS relating to the Settlement Statement and (ii)
any supporting schedules, analyses and other documentation relating to the
Settlement Statement. The Settlement Statement shall become final and binding
upon the parties on the thirtieth (30th) day following delivery thereof,
unless Gaylord gives written notice of its disagreement with the Settlement
Statement ("Notice of Disagreement") to CBS prior to such date. Any Notice of
Disagreement shall specify in reasonable detail the nature
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7
of any disagreement so asserted. If a Notice of Disagreement is given to CBS
in the period specified, then the Settlement Statement (as revised in
accordance with clause (I) or (II) below) shall become final and binding upon
the parties on the earlier of (I) the date CBS and Gaylord resolve in writing
any differences they have with respect to the matters specified in the Notice
of Disagreement or (II) the date any disputed matters are finally resolved in
writing by the Accounting Firm (as defined below). Within 10 business days
after the Settlement Statement becomes final and binding upon the parties,
payment of the difference must be made via wire transfer in immediately
available funds, together with interest thereon at the prime rate (as reported
by the Wall Street Journal or, if not reported thereby, by another
authoritative source) in effect as of the Effective Time, calculated on the
basis of the actual number of days elapsed over 365, from the Effective Time
to the date of actual payment, compounded annually.
During the 30-day period following the delivery of a Notice of
Disagreement that complies with the preceding paragraph, CBS and Gaylord shall
seek in good faith to resolve in writing any differences that they may have
with respect to the matters specified in the Notice of Disagreement. During
such period, CBS and its independent auditors shall be permitted to review and
make copies reasonably required of (i) the working papers of Gaylord relating
to the Notice of Disagreement and (ii) any supporting schedules, analyses and
documentation relating to the Notice of Disagreement. If, at the end of such
30-day period, CBS and Gaylord have not so resolved such differences, CBS and
Gaylord shall submit to an independent accounting firm (the "Accounting Firm")
for review and resolution any and all matters which remain in dispute and
which were properly included in the Notice of Disagreement. The Accounting
Firm shall be a mutually acceptable internationally recognized independent
public accounting firm agreed upon by Gaylord and CBS in writing, which
Accounting Firm shall not have been the auditing firm representing CBS or
Gaylord during the last two years. If Gaylord and CBS do not agree on the
selection of an Accounting Firm within sixty (60) days of the Notice of
Disagreement, then the Washington, D.C. office of Ernst & Young shall be the
Accounting Firm. Within sixty (60) days after selection of the Accounting
Firm, Gaylord and CBS shall submit their respective positions to the
Accounting Firm, in writing, together with any other materials relied upon in
support of their respective positions. CBS and Gaylord shall use reasonable
efforts to cause the Accounting Firm to render a decision resolving the
matters in dispute within 30 days following the submission of such materials
to the Accounting Firm. CBS and Gaylord agree that judgment may be entered
upon the determination of the Accounting Firm in any court having jurisdiction
over the party against which such determination is to be enforced. Except as
specified in the following sentence, the cost of any arbitration (including
the fees and expenses of the Accounting Firm) pursuant to this Section 1.13
shall be borne by CBS and Gaylord in inverse proportion as they may prevail on
each matter resolved by the Accounting Firm, which proportionate allocations
shall also be determined by the Accounting Firm at the time the determination
of the Accounting Firm is rendered on the merits of the matters submitted. The
fees and expenses (if any) of CBS's independent auditors and attorneys
incurred in connection with the review of any Notice of Disagreement shall be
borne by CBS, and the fees and expenses (if any) of Gaylord's independent
auditors and attorneys incurred in connection with their review of the
Settlement Statement shall be borne by Gaylord.
Any payments made pursuant to this Section 1.13 shall (i) in the case of
a payment to be made to Gaylord, be treated as being made immediately before
the Effective Time by the Limited Partnership to GCI or GTC, as the case may
be, and then to Gaylord, and (ii) in the case of a payment to be made by
Gaylord, be treated as being made immediately before the Effective Time as a
capital contribution by Gaylord to GCI or GTC, as the case may be, and then by
such entity to the Limited Partnership. None of Gaylord or any of its
subsidiaries, or CBS or any of its subsidiaries, shall take any position
inconsistent with the treatment described in the immediately
<PAGE>
8
preceding sentence before any Tax Authority except to the extent that a Final
Determination causes any such payment not to be so treated.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF GAYLORD
Gaylord makes the following representations and warranties to CBS as of
the date hereof and, subject to the following sentence, as of the Closing
Date. The representations and warranties of Gaylord in this Agreement that are
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the
Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date).
SECTION 2.1. ORGANIZATION; QUALIFICATION; POWER
The Limited Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Texas. The
Limited Partnership has full power and authority to own or lease and to
operate the Station and its assets and to carry on its business as now
conducted. GCI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas. Gaylord is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. GTC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of GCI and GTC has full
power and authority to own its respective partnership interest in the Limited
Partnership. Each of the Limited Partnership, GTC, Gaylord and GCI is duly
qualified to do business as a foreign entity and in good standing under the
laws of each state or other jurisdiction in which either the ownership or use
of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except where the failure to be
so qualified would not reasonably be expected to have a Material Adverse
Effect on GTC, GCI and the Limited Partnership, taken as a whole, or impair
the ability of Gaylord, the Gaylord Subsidiaries or the Limited Partnership to
consummate the transactions contemplated by, or to satisfy their obligations
under, the Transaction Agreements, or delay in any material respect or prevent
the consummation of any of the transactions contemplated by the Transaction
Agreements (a "Gaylord Material Adverse Effect"). Gaylord has delivered to CBS
true and complete copies of (i) the charter document and by-laws of each of
GTC and GCI and (ii) the Certificate of Limited Partnership and Limited
Partnership Agreement of the Limited Partnership (collectively, the
"Organizational Documents"), in each case as amended through the date of this
Agreement.
SECTION 2.2. AUTHORITY; ABSENCE OF CONFLICTING AGREEMENTS
(a) Each of Gaylord, GCI, GTC and the Limited Partnership has the
power and authority to execute, deliver and perform this Agreement and
all of the other agreements and instruments to which it is, or is
specified to be, a party and which are to be executed and delivered
pursuant hereto (collectively, together with this Agreement, the
"Transaction Agreements"), to consummate the transactions contemplated
thereby and to comply with the terms, conditions and provisions thereof.
(b) The execution, delivery and performance of the Transaction
Agreements and the consummation of the transactions contemplated thereby
have been duly authorized and approved by all necessary corporate and
partnership action on the part of Gaylord, GCI, GTC and the Limited
Partnership. Each of Gaylord, GTC, GCI and the Limited Partnership has
duly executed
<PAGE>
9
and delivered this Agreement and, prior to the Closing, will have duly
executed and delivered the other Transaction Agreements to which it is,
or is specified to be, a party, and this Agreement constitutes, and each
of the other Transaction Agreements to which it is, or is specified to
be, a party will upon execution and delivery thereof constitute, its
legal, valid and binding agreement enforceable against it in accordance
with its respective terms, except in each case as such enforceability may
be limited by bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting or limiting the enforcement of creditors' rights
generally and except as such enforceability is subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(c) Except as set forth in Schedule 2.2, neither the execution and
delivery by Gaylord, GTC, GCI or the Limited Partnership of any of the
Transaction Agreements, the consummation of any of the transactions
contemplated thereby nor compliance by Gaylord, GTC, GCI and the Limited
Partnership with or fulfillment by any of them of the terms, conditions
and provisions thereof will conflict with, or result in a violation or
breach of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, amendment, cancellation or
acceleration of any obligation or loss of a material benefit under, or to
increased, additional, accelerated or guaranteed rights or entitlement of
any person under, or result in the creation of any Encumbrance upon any
of the properties or assets of the Gaylord Subsidiaries or the Limited
Partnership under, (i) any of the Organizational Documents or the charter
or by-laws of Gaylord, (ii) any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, contract, agreement,
obligation, understanding, commitment or other legally binding
arrangement or of any license, franchise, permit, concession, certificate
of authority, order, approval, application or registration from, of or
with a Governmental Entity (as defined below) (a "Permit") to which
Gaylord or any of its subsidiaries, including GTC and GCI, or the Limited
Partnership, is a party or by which any of their respective properties or
assets is or may be bound or (iii) subject to the governmental filings
and other matters referred to in Section 2.2(d), any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Gaylord
or any of its subsidiaries, including GTC and GCI, or the Limited
Partnership or their respective properties or assets, other than, in the
case of clause (ii) or (iii), any such items that individually or in the
aggregate have not had and would not have a Gaylord Material Adverse
Effect.
(d) 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
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act of 1933 (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 Federal Communications Commission or any successor
entity (the "FCC") under the Communications Act, (v) 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 GCI, GTC or the Limited Partnership are qualified
to do business and (vi) 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, filing or application with, any federal, state, local or
foreign government, or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign
(a "Governmental Entity"), is required to be obtained or made by or with
respect to Gaylord or any of its subsidiaries, including GCI and GTC, or
the Limited Partnership, in connection with the execution, delivery or
performance by Gaylord, GCI, GTC and the Limited Partnership of each
Transaction Agreement to which any of them is, or is specified to be, a
party or the consummation by Gaylord, GCI, GTC and the Limited
Partnership of the transactions contemplated thereby (except where the
failure to obtain such consents,
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10
approvals, licenses, permits, orders or authorizations, or to make such
registrations, declarations, filings or applications, would not,
individually or in the aggregate, have a Gaylord Material Adverse
Effect).
SECTION 2.3. CAPITALIZATION; OWNERSHIP
The authorized capital stock of GCI consists of 1,000 shares of GCI
Stock, all of which shares are issued and outstanding, and the authorized
capital stock of GTC consists of 100,000 shares of GTC Stock, of which 100
shares are issued and outstanding. All of the Gaylord Subsidiary Stock is
owned beneficially and of record by Gaylord, free and clear of all
Encumbrances, and the Gaylord Subsidiary Stock has been duly authorized and
validly issued and is fully paid and nonassessable and not subject to
preemptive rights. GCI owns the entire general partnership interest in the
Limited Partnership, free and clear of all Encumbrances, and such interest is
its sole asset. GTC owns the entire limited partnership interest in the
Limited Partnership, free and clear of all Encumbrances, and such interest is
its sole asset. There are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which Gaylord, GTC, GCI or the Limited Partnership is a party or by which any
of them is bound obligating Gaylord, GCI, GTC or the Limited Partnership to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of GTC or GCI or additional
limited or general partnership interests in the Limited Partnership or
obligating Gaylord, GTC, GCI or the Limited Partnership to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations of GTC, GCI or the Limited Partnership to repurchase,
redeem or otherwise acquire any interest in GTC, GCI or the Limited
Partnership. There are no outstanding contractual obligations of Gaylord, GTC
or GCI to vote or to dispose of any of their respective interests in GTC, GCI
or the Limited Partnership.
SECTION 2.4. FINANCIAL STATEMENTS
Schedule 2.4 contains (a) the unaudited balance sheet (the "Balance
Sheet") of GTC, GCI and the Limited Partnership as of February 28, 1999 (the
"Financial Statement Date"), (b) the related unaudited statements of income
for the two months then ended, and (c) the unaudited balance sheets and
related unaudited statements of income as of and for the years ended December
31, 1996, 1997 and 1998 (collectively, the "Financial Statements"). Except as
set forth in Schedule 2.4, the Financial Statements have been prepared in
accordance with GAAP consistently applied, are complete and correct in all
material respects, accurately reflect the books, records and accounts of GTC,
GCI and the Limited Partnership (which books and records are accurate and
complete in all material respects), and fairly present in all material
respects the financial position of GTC, GCI and the Limited Partnership as of
their respective dates and the results of their operations for the periods
then ended, subject to the absence of footnotes. None of GTC, GCI or the
Limited Partnership has any material liabilities or obligations of any nature
(whether absolute, accrued, contingent, unasserted or otherwise) except
liabilities or obligations (a) which are accrued or reserved against in the
Balance Sheet, (b) for Taxes with respect to current operations, or (c) which
were incurred after the Financial Statement Date in the ordinary course of
business and not in violation of this Agreement.
SECTION 2.5. ABSENCE OF MATERIAL ADVERSE EFFECT
Except as disclosed in Schedule 2.5, since February 28, 1999, each of
GTC, GCI and the Limited Partnership has conducted its business only in the
ordinary course consistent with past
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11
practice, and there has not been any change, effect, event or occurrence that,
individually or in the aggregate, has had or would reasonably be expected to
have a Gaylord Material Adverse Effect.
SECTION 2.6. TAXES
Except as set forth in Schedule 2.6:
(a) As used in this Agreement, (i) "Taxes" shall include all
federal, state, local or foreign income, property, sales, excise and
other taxes or similar governmental charges, including any interest,
penalties, or additions with respect thereto; (ii) "Tax Returns" shall
mean all returns, reports, declarations, information, estimates,
schedules, filings or documents (including any related or supporting
information) filed or required by any tax authority to be filed with
respect to taxes, including, without limitation, all information returns,
claims for refund, amended returns, declarations of estimated tax, and
requests for extensions of time to file any item described in this
paragraph; and (iii) "Treasury Regulations" refer to the Treasury
Department regulations promulgated under the Code;
(b) No Encumbrances for Taxes exist with respect to any of the
assets or properties of any of GTC, GCI or the Limited Partnership,
except for statutory Encumbrances for Taxes not yet due or payable;
(c) All federal income Tax Returns and all other material federal,
state and local, domestic and foreign Tax Returns required to be filed by
or on behalf of any of GTC, GCI or the Limited Partnership, or any
consolidated, combined, affiliated or unitary group of which any of GTC,
GCI or the Limited Partnership is or has ever been a member, have been
timely filed or requests for extensions have been timely filed and any
such extensions have been granted and have not expired;
(d) Each such Tax Return was complete and correct in all material
respects;
(e) All material Taxes with respect to taxable periods covered by
such Tax Returns and all other material Taxes for which any of GTC, GCI
or the Limited Partnership is liable (together, the "Relevant Taxes")
have been paid in full, or reserves therefor have been established in
accordance with GAAP on the Balance Sheet;
(f) All U.S. federal income Tax Returns filed by or on behalf of
each of GTC, GCI or the Limited Partnership have been examined by and
settled with the Internal Revenue Service, or the statute of limitations
with respect to the relevant tax liability has expired, for all taxable
periods through and including 1995;
(g) All relevant Taxes due with respect to any completed and settled
audit, examination or deficiency litigation with any tax authority have
been paid in full;
(h) There is no audit, examination, deficiency, or refund litigation
pending with respect to any relevant Taxes and no requests pending for
waivers of the time to assess any relevant Taxes and no tax authority has
given written notice of the commencement of any audit, examination or
deficiency litigation, with respect to any relevant Taxes; and
(i) None of GTC, GCI or the Limited Partnership is bound by any
written agreement or arrangement with respect to Taxes.
<PAGE>
12
SECTION 2.7. PERMITS
Except as set forth in Schedule 2.7, each of GTC, GCI and the Limited
Partnership legally owns, holds or possesses all FCC Authorizations and all
other material Permits which are reasonably necessary to entitle it to own or
lease, operate and use the Station and its assets and to carry on and conduct
the Station's business as currently conducted. Schedule 2.7 sets forth a list
and brief description of each such FCC Authorization and other material Permit
held by each of GTC, GCI and the Limited Partnership. Each of GTC, GCI and the
Limited Partnership has fulfilled and performed in all material respects its
obligations under each such FCC Authorization and other material Permit, and
no event has occurred or condition or state of facts exists which constitutes
or, after notice or lapse of time or both, would constitute grounds for
revocation or termination of any such FCC Authorization or other material
Permit, or the imposition of any materially adverse restriction or limitation
on the operation of the Station. Except as set forth on Schedule 2.7, no
application, action or proceeding is pending for the renewal or modification
of any of such FCC Authorizations or other material Permits, and no notice of
cancellation, of default or of any dispute concerning any such FCC
Authorization or other material Permit, or of any event, condition or state of
facts described in the preceding sentence, has been received by any of
Gaylord, GTC, GCI or the Limited Partnership. Except as set forth on Schedule
2.7, each of such FCC Authorizations and other material Permits is valid,
subsisting and in full force and effect. The Station's operations are limited
only by the conditions and restrictions specified in the FCC Authorizations or
other material Permits and by the FCC's and the FAA's rules and policies and
by the Communications Act, and, except for matters affecting the television
broadcasting industry generally, are not subject to any condition or
restriction which would limit in any material respect the operation of the
Station as currently conducted. Subject to the receipt of the FCC Consent and
any other governmental consents expressly required by the Transaction
Agreements, to the best knowledge of Gaylord, GTC, GCI and the Limited
Partnership, upon consummation of the Mergers, such FCC Authorizations and
other material Permits will remain vested in the Limited Partnership
immediately after the Effective Time and, at such time, will be in full force
and effect, in each case without (a) the occurrence of any material breach,
default or forfeiture of rights thereunder or (b) the consent, approval, or
act of, or the making of any filing with, any other Governmental Entity or
other party. Except as set forth on Schedule 2.7, the Limited Partnership has
operated the Station in all material respects in accordance with such FCC
Authorizations and other material Permits and in compliance in all material
respects with the Communications Act and all other laws and regulations,
federal, state, local and foreign, applicable to the Station. Except as set
forth on Schedule 2.7, none of the Limited Partnership, Gaylord, GCI nor GTC
has received any notice of any violations of such FCC Authorizations, the
Communications Act or any other applicable laws and regulations. Except as set
forth on Schedule 2.7, there is no action by or before the FCC currently
pending or, to the best knowledge of Gaylord, GTC, GCI and the Limited
Partnership, threatened to revoke, cancel, rescind, suspend, modify or refuse
to renew in the ordinary course any of the FCC Authorizations. Except as set
forth on Schedule 2.7, to the best knowledge of Gaylord, GTC, GCI and the
Limited Partnership, there is no reasonable basis for the initiation or
issuance by the FCC of any investigation, proceeding or notice of material
violation with respect to the Station.
SECTION 2.8. REAL PROPERTY
Schedule 2.8 contains (i) a brief description of all real property and
interests in real property owned (the "Owned Property") by the Limited
Partnership (showing the record title holder, legal description, location,
improvements and any indebtedness secured by a mortgage or other Encumbrance
thereon) and (ii) with respect to real property or interests in real property
leased (the "Leased Property") by the Limited Partnership, a list and brief
description of each lease (a "Lease") or similar agreement (showing the
rental, expiration date, renewal, the uses being made thereof and
<PAGE>
13
the location of the real property covered by such lease or other agreement).
The Limited Partnership has good and sufficient, valid and marketable title to
the Owned Property and good and valid leasehold title to the Leased Property,
in each case free and clear of all Encumbrances, except (A) such Encumbrances
as are set forth in Schedule 2.8, (B) Encumbrances described in clauses (3),
(4) and (5) of Section 2.9(c), (C) leases, subleases and similar agreements
set forth in Schedule 2.16, (D) easements, covenants, rights-of-way and other
similar restrictions of record and (E) (i) zoning, building and other similar
restrictions, (ii) Encumbrances that have been placed by any developer,
landlord or other third party on property over which the Limited Partnership
has easement rights or on any Leased Property and subordination or similar
agreements relating thereto and (iii) unrecorded easements, covenants,
rights-of-way and other similar restrictions. None of the items set forth in
clauses (D) and (E) above, individually or in the aggregate, materially
impairs or could reasonably be expected materially to impair, the continued
use and operation of the real property to which they relate in the business of
the Station as presently conducted. There are (A) no outstanding contracts for
any improvements to the Owned Property which have not been fully paid, (B) no
expenses of any kind (including brokerage and leasing commissions) pertaining
to the Owned Property which have not been fully paid and (C) no outstanding
contracts for the sale of any of the Owned Property. All Leases are in full
force and effect and grant in all respects the leasehold estates or rights of
occupancy or use they purport to grant. Except as provided in Schedule 2.8,
the Limited Partnership has not (A) assigned or otherwise transferred any
Lease or (B) sublet all or any portion of any Leased Property. There are no
existing defaults on the part of the Limited Partnership or, to the best of
Gaylord's knowledge, on the part of any other party thereto, in any material
respect under any Lease and no event has occurred that, with notice or the
lapse of time, or both, would constitute a default on the part of the Limited
Partnership or, to the best of Gaylord's knowledge, on the part of any other
party thereto, in any material respect under any of the Leases. The
consummation of the Mergers and the transactions contemplated hereby will not
result in the occurrence of a default under any of the Leases subject to the
receipt of any necessary consents (whether pursuant to a "change in control"
or assignment provision in the Leases or otherwise). The Parkerville Park
Lease Agreement set forth on Schedule 2.16 with respect to a portion of the
Owned Property does not materially interfere with the business and operations
of the Station as currently conducted.
SECTION 2.9. ASSETS OTHER THAN REAL PROPERTY
(a) The Limited Partnership has good and valid title to all assets
reflected on the Balance Sheets or thereafter acquired, except for those
sold or otherwise disposed of for fair value since the Financial
Statement Date in the ordinary course of business consistent with past
practice and not in violation of this Agreement, in each case free and
clear of all Encumbrances except Permitted Encumbrances (as defined
below). Schedule 2.9(a) sets forth a true and complete list of all assets
properly categorized as plant, property and equipment reflected on the
Balance Sheet and acquired after December 31, 1993, and a summary of
assets acquired prior to that date by general category. All the material
tangible personal property owned by the Limited Partnership is and has
been maintained in all material respects in accordance with the past
practice of the Limited Partnership and generally accepted industry
practice, is in good working order (normal wear and tear excepted) and is
suitable in all material respects for the purposes of its intended use.
(b) All personal property leased by the Limited Partnership is in
all material respects in the condition required of such property by the
terms of the lease applicable thereto during the term of the lease and
upon the expiration thereof.
(c) "Permitted Encumbrances" shall mean those Encumbrances (1)
referred to in Schedule 2.9(c), (2) for Taxes not yet due or payable or
being contested in good faith, (3) that
<PAGE>
14
constitute easements, covenants, rights-of-way and other similar matters
of record, (4) that constitute mechanics', carriers', workers'
compensation or like liens incurred in the ordinary course of business
consistent with past practice, (5) that constitute other imperfections of
title or encumbrances that, individually or in the aggregate, do not
materially impair, and could not reasonably be expected materially to
impair, the continued use and operation of the assets to which they
relate in the business of the Station as presently conducted or (6)
incurred, or deposits made, in the ordinary course of business consistent
with past practice in connection with workers' compensation, unemployment
insurance and social security, retirement and other similar legislation
relating to amounts not yet due or payable.
(d) This Section 2.9 does not relate to the Owned Property or the
Leased Property, such items being the subject of Section 2.8, or to
Intellectual Property, such items being the subject of Section 2.15.
SECTION 2.10. ASSETS AND LIABILITIES OF THE LIMITED PARTNERSHIP
The assets and liabilities of the Limited Partnership, GTC and GCI,
including those set forth on the Balance Sheet, consist only of assets and
liabilities solely related to the Station and its business as currently
conducted. Except as set forth on Schedule 2.10, and except for the transfers
contemplated by Section 4.3(b), the assets to be held by the Limited
Partnership, GCI and GTC as of the Effective Time will constitute the assets
necessary to operate the Station and its business as currently conducted.
SECTION 2.11. EMPLOYEES
None of GTC, GCI or the Limited Partnership has any employees other than
the employees listed on Schedule 2.11. Schedule 2.11 contains, as of February
28, 1999: (i) a list of all Station Employees as defined below, and (ii) the
rate of compensation of such Station Employees excluding commissions. Except
as described in Schedule 2.16, the Limited Partnership has no written
contracts of employment with any Station Employee. Except as set forth in
Schedule 2.11, no Station Employee (i) shall be entitled to receive any
termination, severance or deferred compensation payment or benefits as a
result of the transactions contemplated by this Agreement, (ii) has any
entitlement on or following the Effective Time under any individual agreement,
or under any plan, program, policy or other arrangement, to (x) severance pay
or benefits, or (y) bonus or incentive pay other than commission-based
incentive pay, or (iii) is entitled to any such payment in the event any such
Station Employee ceases to be employed at the Station after the Closing Date
other than as a result of actual termination of such employment by the
Station. "Station Employees" shall mean all individuals employed by GTC, GCI,
the Limited Partnership or the Station.
SECTION 2.12. EMPLOYMENT AND SIMILAR AGREEMENTS
Except as disclosed in Schedule 2.16, there exist no consulting,
employment, severance or termination agreements currently in effect between
the Limited Partnership, GTC or GCI, and any current Station Employee or
former employee, officer or director of the Limited Partnership, GTC or GCI.
SECTION 2.13. ERISA
(a) Each "employee welfare benefit plan" and "pension benefit plan"
as defined in Section 3 of the Employment Retirement and Income Security
Act of 1974, as amended, currently available to Station Employees is
listed on Schedule 2.13, and, except as set forth on Schedule
<PAGE>
15
2.13, copies of summary plan descriptions for each plan listed on
Schedule 2.13 have been furnished to CBS. Such summary plan descriptions
are accurate in all material respects. Each benefit plan currently
available to Station Employees, including those listed on Schedule 2.13,
is herein referred to as a "Benefit Plan".
(b) There are no material undisclosed liabilities in respect of the
Benefit Plans with respect to which GTC, GCI or the Limited Partnership
could be liable.
SECTION 2.14. LABOR MATTERS
Except as disclosed on Schedule 2.14, as of the date hereof, none of the
Limited Partnership, GCI or GTC is the subject of any suit, action or
proceeding which is pending or, to the best of Gaylord's knowledge,
threatened, asserting that GCI, GTC or the Limited Partnership has committed
an unfair labor practice (within the meaning of the National Labor Relations
Act or applicable state statutes) or seeking to compel GCI, GTC or the Limited
Partnership to bargain with any labor organization as to wages and conditions
of employment. No strike or other labor dispute involving GCI, GTC or the
Limited Partnership is pending or, to the knowledge of Gaylord, GCI, GTC or
the Limited Partnership, threatened, and, to the best of Gaylord's knowledge,
there is no activity involving any employees of the Limited Partnership
seeking to certify a collective bargaining unit or engaging in any other
organizational activity. None of GCI, GTC or the Limited Partnership is a
party to, or bound by, any collective bargaining agreement or other Contract
with a labor union or labor organization. GTC, GCI and the Limited Partnership
have complied in all material respects with all laws relating to wages, hours,
collective bargaining and the payment of social security and similar Taxes,
and no person has, to the best of Gaylord's knowledge, asserted that GCI, GTC
or the Limited Partnership is liable in any material amount for any arrears of
wages or any Taxes or penalties for failure to comply with any of the
foregoing.
SECTION 2.15. INTELLECTUAL PROPERTY
As used herein, "Intellectual Property" means domestic and foreign
patents, patent applications, trademark and service mark applications,
registered trademarks, registered service marks, registered copyrights, and
unregistered material trademarks, service marks and trade names. Schedule 2.15
sets forth a list of all Intellectual Property which GTC, GCI or the Limited
Partnership owns, licenses or otherwise uses as of the date hereof.
(a) Except as set forth in Schedule 2.15, (i) all Intellectual
Property owned by the Limited Partnership has been duly registered in,
filed in or issued by the appropriate Governmental Entity where such
registration, filing or issuance is in the reasonable business judgment
of the Limited Partnership necessary for the business of the Station as
currently conducted or (ii) the Limited Partnership owns, licenses or
otherwise has the right to use all Intellectual Property and material
trade secrets, inventions, know-how, formulae, processes, procedures and
computer software ("Technology") used in connection with the Station as
its business is currently conducted. To the best of Gaylord's knowledge,
no Technology currently used in connection with the Station has been
used, divulged or appropriated for the benefit of any person other than
the Limited Partnership.
(b) To the best of Gaylord's knowledge no other person has violated,
infringed upon, misused, misappropriated any Intellectual Property or
Technology of the Limited Partnership. Except as set forth in Schedule
2.15, none of GTC, GCI or the Limited Partnership has made any pending
claim in writing of a violation, infringement, misuse or misappropriation
by others of rights of GTC, GCI or the Limited Partnership to or in
connection with any Intellectual Property
<PAGE>
16
or Technology currently used in connection with the Station and its
business as currently conducted. To the best of Gaylord's knowledge,
there are no interferences or other contested inter partes proceedings,
either pending or threatened, in any copyright office or patent and
trademark office or by any other Governmental Entity relating to any
pending application for any Intellectual Property currently used in
connection with the Station as its business is currently conducted.
(c) To the best of Gaylord's knowledge, the Limited Partnership has
not violated, infringed upon, misused, misappropriated or otherwise come
into conflict with any Intellectual Property of any other person. The
Limited Partnership has not received any written charge, complaint,
claim, demand or notice alleging any violation, infringement, misuse,
misappropriation or other conflict of the type listed in the prior
sentence (including any written claim that the Limited Partnership must
license or refrain from using any Intellectual Property or other
proprietary information of any other person) which has not been settled
or otherwise fully resolved, nor is there any action, pending or, to the
best of Gaylord's knowledge, threatened against the Limited Partnership
claiming that the Limited Partnership has, whether directly,
contributorily or by inducement, interfered with, infringed, or
misappropriated or come into conflict with any other Intellectual
Property.
SECTION 2.16. CONTRACTS
(a) Schedule 2.16 provides a true and complete listing of all
contracts as of the date hereof to which GCI, GTC or the Limited
Partnership is a party or by which GCI, GTC or the Limited Partnership is
bound, or with respect to the Station, GCI, GTC or the Limited
Partnership to which Gaylord or any of its subsidiaries (other than GCI
or GTC) is a party, involving:
(i) the purchase, sale or lease of real property;
(ii) the purchase, rental or use of any films, recordings,
television programming or programming services which is not
terminable by the Limited Partnership without penalty on thirty (30)
days' notice or less or which provides for performance over a period
of more than ninety (90) days or which involves the payment after
the date hereof of more than $25,000;
(iii) the purchase of merchandise, supplies or other tangible
personal property or the receipt of services which is not terminable
by the Limited Partnership without penalty on thirty (30) days'
notice or less or which provides for performance over a period of
more than ninety (90) days or which involves the payment after the
date hereof of more than $25,000;
(iv) the lease, sublease or similar agreement with any person
under which any of GCI, GTC or the Limited Partnership is a lessor
or sublessor of, or makes available for use to any person, (A) any
real property of the Limited Partnership or (B) any portion of the
premises otherwise occupied by the Limited Partnership;
(v) the lease, sublease or similar agreement with any person
under which (A) the Limited Partnership is a lessee of, or holds or
uses, any machinery, equipment, vehicle or other tangible personal
property owned by any person or (B) the Limited Partnership is a
lessor or sublessor of, or makes available for use by any person,
any tangible personal property owned or leased by the Limited
Partnership, in any such case which provide for performance over a
period of more than ninety (90) days, which involve the payment or
receipt after the date hereof of more than $25,000 or which require
the payment of any penalties upon assignment or termination.
<PAGE>
17
(vi) any contract under which GTC, GCI or the Limited
Partnership has borrowed any money from, or issued any note, bond,
debenture or other evidence of indebtedness to, any person (other
than the Limited Partnership) or any other note, bond, debenture or
other evidence of indebtedness issued to any person;
(vii) any contract under which GTC, GCI or the Limited
Partnership has, directly or indirectly, made any loan, advance,
extension of credit or capital contribution to, or investment in,
any person (other than among one another and other than to officers
and employees of the Limited Partnership for travel, business or
relocation expenses in the ordinary course of business);
(viii) any mortgage, pledge, security agreement, deed of trust
or other instrument granting an Encumbrance upon any property of
GTC, GCI or the Limited Partnership;
(ix) any contract under which GTC, GCI or the Limited
Partnership is or may become obligated to indemnify (except where
such obligation to indemnify is incidental to the purpose and the
other provisions of such contract) any other person or otherwise to
assume any material liability with respect to liabilities relating
to any current or former business of the Limited Partnership or any
predecessor person;
(x) the sale of broadcast time for advertising or other
purposes for cash which was not made in the ordinary course of
business consistent with past practice;
(xi) any guarantee of the obligations of any person by GTC, GCI
or the Limited Partnership;
(xii) any transaction other than in the ordinary course of
business which is not terminable by the Limited Partnership without
penalty on thirty (30) days' notice or less or which provides for
payments over a period of more than ninety (90) days or which
involves, together with any other such transactions, the payment
after the date hereof of more than $25,000;
(xiii) any agreement relating to a joint venture or similar
arrangement with another person or entity with respect to all or any
part of the operations of the Station or any of its assets;
(xiv) any sales agency, advertising representative or
advertising or public relations contract which is not terminable by
the Limited Partnership without penalty on thirty (30) days' notice
or less or which provides for payments over a period of more than
ninety (90) days or which involves the payment after the date hereof
of more than $25,000;
(xv) any barter agreement or other agreement with advertisers
for broadcasting or commercial time on the Station in exchange for
goods or services;
(xvi) any employee collective bargaining agreement, employment
agreement (other than employment agreements terminable by the
Limited Partnership without penalty on notice of thirty (30) days or
less under which the only obligation of the Limited Partnership is
to make current wage or salary payments and provide current fringe
benefits), consulting advisory or service agreement, deferred
compensation agreement or covenant not to compete;
<PAGE>
18
(xvii) any agreement with employees (other than employment
agreements disclosed in response to clause (xvi) above or excluded
therefrom), agents or attorneys-in-fact of the Limited Partnership;
(xviii) any contract (other than this Agreement) with (A)
Gaylord or any of its Affiliates or (B) any officer, director or
employee of Gaylord, GCI, GTC, the Limited Partnership or any other
Affiliate of Gaylord (other than employment agreements covered by
clause (xvi) above); or
(xix) any other agreement, commitment, understanding or
instrument which Gaylord, GCI, GTC or the Limited Partnership
reasonably believes is material to the Station.
(b) Schedule 2.16 also contains a copy of the Station's syndicated
program and feature film "Inventory Report" as of February 28, 1999. Such
report has been prepared in the normal course of the Station's business
in a manner consistent with prior reports, but it has not been audited by
or on behalf of the Limited Partnership. The information contained in
such report is, to the best of Gaylord's knowledge, accurate in all
material respects.
<PAGE>
19
SECTION 2.17. STATUS OF CONTRACTS
Gaylord has delivered to CBS true, complete and current copies of all
contracts listed on Schedule 2.16. To the best of Gaylord's knowledge, all of
the contracts listed on Schedule 2.16 are in full force and effect, and are
valid, binding and enforceable in accordance with their terms (subject in each
case to bankruptcy, insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally). To the best of
Gaylord's knowledge, there is not under any such contract any default by any
party thereto or any event that, after notice or lapse of time, or both, could
constitute a default. None of Gaylord, GCI, GTC or the Limited Partnership has
received notice or been otherwise advised of the intention of any party to
terminate any of the contracts listed on Schedule 2.16. To the extent GCI, GTC
or the Limited Partnership leases space on any of its transmission towers
pursuant to a contract listed on Schedule 2.16, such leases, individually or
in the aggregate, do not and would not reasonably be expected materially to
impair the continued use and operation by the Station of any such towers in
the business of the Station as presently conducted.
SECTION 2.18. LITIGATION
Except as disclosed in Schedule 2.18, as of the date hereof, there is no
suit, action, proceeding or investigation pending or, to the best of Gaylord's
knowledge, threatened against Gaylord or any of its subsidiaries, including
GTC and GCI, or the Limited Partnership that, individually or in the
aggregate, would reasonably be expected to have a Gaylord Material Adverse
Effect, nor is there any judgment, order, decree, statute, law, ordinance,
rule or regulation of any Governmental Entity or arbitrator outstanding
against Gaylord, the Limited Partnership, GTC or GCI having, or which would
reasonably be expected to have, a Gaylord Material Adverse Effect.
SECTION 2.19. COMPLIANCE WITH APPLICABLE LAWS
Except as disclosed in Schedule 2.19, there has occurred no default under
any FCC Authorization or other material Permit possessed by GCI, GTC or the
Limited Partnership, except for defaults that, individually or in the
aggregate, would not reasonably be expected to have a Gaylord Material Adverse
Effect. Except as disclosed in Schedule 2.19, GTC, GCI and the Limited
Partnership are in compliance with all judgments, orders, decrees, statutes,
laws, ordinances, rules and regulations of any Governmental Entity applicable
to them, except for possible noncompliance which individually or in the
aggregate would not reasonably be expected to have a Gaylord Material Adverse
Effect. Nothing in this Section 2.19 shall relate to compliance with or
Permits under environmental, health and safety laws which is the subject of
Section 2.20.
SECTION 2.20. ENVIRONMENTAL MATTERS
Except as set forth in Schedule 2.20, to the best of Gaylord's knowledge:
(a) GTC, GCI and the Limited Partnership are in compliance with all
environmental, health and safety Requirements of Law applicable to them;
(b) neither the Limited Partnership nor any of its current or former
properties, assets or operation, is subject to any order from or
agreement with any Governmental Entity or private party respecting (i)
any environmental, health or safety Requirements of Law, (ii) any
Remedial Action or (iii) any Liabilities and Costs arising from the
Release or threatened Release of a Contaminant into the environment;
<PAGE>
20
(c) there is not now, nor has there ever been:
(i) any Release of any Contaminant on, in, under or from any
assets or properties currently or formerly owned, leased or operated
by GTC, GCI or the Limited Partnership;
(ii) any underground storage tanks, aboveground storage tanks
or surface impoundments on or under any properties owned or operated
by GTC, GCI or the Limited Partnership;
(iii) any asbestos containing material in any assets currently
owned, leased or operated by GTC, GCI or the Limited Partnership; or
(iv) any polychlorinated biphenyls (PCBs) in any assets owned
or operated by GTC, GCI or the Limited Partnership;
(d) none of Gaylord, GTC, GCI nor the Limited Partnership has
received any notice or claim to the effect that it is or may be liable to
any Governmental Entity or person as a result of the Release or
threatened Release of a Contaminant into the environment;
(e) none of GTC, GCI nor the Limited Partnership is the subject of
any investigation by any Governmental Entity evaluating whether any
Remedial Action is needed to respond to a Release or threatened Release
of a Contaminant into the environment nor, is any such investigation
threatened; and
(f) no facility to which any Contaminant arising from any of the
current or former properties, assets or operations of GTC, GCI or the
Limited Partnership has been taken for disposal is currently subject to
Remedial Action under any environmental, health or safety Requirement of
Law.
SECTION 2.21. FCC MATTERS
Except as set forth on Schedule 2.21, all material notices, reports,
forms, applications and other statements or disclosures required to be filed
with the FCC with respect to the Station have been filed and complied with in
all material respects and are complete, correct and current in all material
respects. The Limited Partnership has timely paid, or caused to be paid, to
the FCC all annual regulatory fees payable with respect to the FCC
Authorizations.
SECTION 2.22. NO FINDER
None of Gaylord, GTC, GCI or the Limited Partnership, nor any party
acting on behalf of any of them has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or on account of the
transactions contemplated by any of the Transaction Agreements.
SECTION 2.23. INSURANCE
A copy of the Gaylord insurance manual has been made available to CBS, it
being understood that CBS shall be solely responsible for arranging insurance
coverage with respect to GTC, GCI and the Limited Partnership from and after
the Closing.
<PAGE>
21
SECTION 2.24. YEAR 2000
Gaylord believes that it is using all reasonable efforts to assure that
all computer software used by the Station in its business as currently
conducted and other applicable technology used by the Station in its business
as currently conducted will be able to operate consistently after December 31,
1999 to accurately process, provide and receive date data (including
calculating, comparing and sequencing) from, into and between the Twentieth
and Twenty-first centuries, including the years 1999 and 2000, and make
leap-year calculations. Gaylord, GTC, GCI and the Limited Partnership believe
that they are using all reasonable efforts to assure that the Year 2000 date
change will not adversely affect the systems and facilities that support the
operation of the Station and its business as currently conducted, except as
could not reasonably be expected to have a Material Adverse Effect on the
Limited Partnership or the Station and its business as currently conducted.
SECTION 2.25. TRANSACTIONS WITH AFFILIATES
None of the contracts set forth in Schedule 2.16 between Gaylord or any
of its Affiliates (excluding GTC and GCI), on the one hand, and GTC, GCI, the
Limited Partnership or any of their respective Affiliates, on the other hand,
will continue in effect subsequent to the Closing.
SECTION 2.26. CABLE MATTERS
(a) To the best of Gaylord's knowledge, Schedule 2.26 sets forth as
of the date hereof a list of all Market Cable Systems which carry the
Station's signal and/or to which the Station has provided a must-carry
notice or retransmission consent notice in accordance with the provisions
of the Cable Television Consumer Protection and Competition Act of 1992,
as amended, and the FCC Regulations (collectively, the "Cable Act
Requirements"), other than those which have fewer than 2,000 subscribers.
(b) Except as set forth on Schedule 2.26, there are no:
(i) written must-carry or retransmission consent notices
referred to in clause (a) above which were not delivered to the
Market Cable System in question on or before the date required under
the Cable Act Requirements for such notices to be effective for the
three-year period ending in 1999;
(ii) Market Cable Systems which are carrying the Station's
signal and which have given written notice of such Market Cable
System's intention to delete the Station from carriage or to change
the Station's channel position on such cable system, other than
pursuant to any agreement described in clause (c) above;
(iii) written notices received by Gaylord from any Market Cable
System alleging that the Station does not deliver an adequate signal
level, as defined in 47 C.F.R. ss.76.55(c)(3), to such Market Cable
System's principal headend (other than any such notice as to which
such failure has been remedied or been determined not to exist);
(iv) pending petitions filed by Gaylord for special relief to
include any additional community or area as part of the Station's
television market, as defined in 47 C.F.R. ss. 76.55(e); and
<PAGE>
22
(v) pending petitions served on Gaylord for special relief
requesting the deletion of any community or area from the Station's
television market.
SECTION 2.27. DIGITAL TELEVISION
The Station has been assigned a channel (Channel 19) by the FCC for the
provision of digital television ("DTV") service. The FCC Authorizations listed
in Schedule 2.7 include a construction permit and all other authorizations
necessary to permit the construction of a DTV station on such channel (the
"DTV Facility"). Construction of the DTV Facility will be completed, and
operation of the DTV Facility commenced, on or before May 1, 1999, the
deadline set forth in 47 C.F.R. ss.73.624(d). To the best of Gaylord's
knowledge, there is no fact or circumstance that will delay the conversion of
the Station to DTV operation in accordance with the May 1, 1999 deadline and
the FCC's overall prescribed timetable for such conversion, or that may cause
the conversion of the Station to DTV operation to have a Gaylord Material
Adverse Effect.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CBS
CBS makes the following representations and warranties to Gaylord as of
the date hereof and, subject to the following sentence, as of the Closing
Date. The representations and warranties of CBS in this Agreement that are
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the
Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date).
SECTION 3.1. ORGANIZATION; QUALIFICATION; POWER
Each of CBS and the CBS Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each of CBS and the CBS Subsidiaries is duly qualified to do business as a
foreign entity and in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect on CBS and its
subsidiaries, taken as a whole, or impair the ability of CBS and the CBS
Subsidiaries to consummate the transactions contemplated by, or to satisfy
their obligations under, the Transaction Agreements, or delay in any material
respect or prevent the consummation of any of the transactions contemplated by
the Transaction Agreements. Each of CBS and the CBS Subsidiaries has the
requisite corporate power and authority to carry on its business as now
conducted. CBS has delivered to Gaylord true and complete copies of the
certificates of incorporation and by-laws of CBS and the CBS Subsidiaries, in
each case as amended through the date of this Agreement.
SECTION 3.2. CBS COMMON STOCK TO BE ISSUED IN THIS TRANSACTION
The issuance of the CBS Common Stock to Gaylord pursuant to this
Agreement has been duly authorized by all necessary corporate action on the
part of CBS. When issued and delivered to Gaylord pursuant to this Agreement,
the CBS Common Stock issued pursuant to this Agreement shall be duly
authorized, validly issued, fully paid, non-assessable and not subject to
preemptive rights.
<PAGE>
23
SECTION 3.3. AUTHORITY; ABSENCE OF CONFLICTING AGREEMENTS
(a) Each of CBS and the CBS Subsidiaries has the requisite corporate
power and authority to execute, deliver and perform each Transaction
Agreement to which it is, or is specified to be, a party and to
consummate the transactions contemplated thereby and to comply with the
terms, conditions and provisions thereof.
(b) The execution, delivery and performance by CBS and the CBS
Subsidiaries of each Transaction Agreement to which it is or will be a
party and the consummation by CBS and the CBS Subsidiaries of the
transactions contemplated thereby have been duly authorized and approved
by all necessary corporate action on the part of CBS and the CBS
Subsidiaries. Each of CBS and the CBS Subsidiaries has duly executed and
delivered this Agreement and, prior to the Closing, will have duly
executed and delivered the other Transaction Agreements to which it is,
or is specified to be, a party, and this Agreement constitutes, and each
of the Transaction Agreements to which it is, or is specified to be, a
party will upon execution and delivery thereof constitute, its legal,
valid and binding obligation, enforceable against it in accordance with
its respective terms, except in each case as such enforceability may be
limited by bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting or limiting the enforcement of creditors' rights
generally and except as such enforceability is subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(c) Neither the execution and delivery by CBS and the CBS
Subsidiaries of any of the Transaction Agreements to which any of them
is, or is specified to be, a party, the consummation by CBS and the CBS
Subsidiaries of the transactions contemplated thereby nor compliance by
CBS and the CBS Subsidiaries with or fulfillment by any of them of the
terms, conditions and provisions thereof will conflict with, or result in
a violation or breach of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, amendment,
cancellation or acceleration of any obligation or loss of a material
benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of
any Encumbrance upon any of the properties or assets of CBS or the CBS
Subsidiaries under, (i) the certificates of incorporation or by-laws of
CBS or the CBS Subsidiaries, (ii) subject to the governmental filings and
other matters referred to in Section 3.3(d), any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, contract,
agreement, obligation, understanding, commitment or other legally binding
arrangement or of any Permit applicable to CBS or any subsidiary of CBS
or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in Section 3.3(d), any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to CBS or any subsidiary of CBS or their respective properties
or assets, other than, in the case of clause (ii) or (iii), any such
items that, individually or in the aggregate, would not have a Material
Adverse Effect on CBS and its subsidiaries taken as a whole, or impair
the ability of CBS and the CBS Subsidiaries to consummate the
transactions contemplated by, or to satisfy their obligations under, the
Transaction Agreements, or delay in any material respect or prevent the
consummation of any of the transactions contemplated by the Transaction
Agreements (a "CBS Material Adverse Effect").
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 of the GCI Articles of Merger with the Secretary of State of
the State of Texas, the filing of the GCI Certificate of Merger
<PAGE>
24
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 (vi) 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 3.4. SEC DOCUMENTS; UNDISCLOSED LIABILITIES
CBS has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC since January 1, 1998 (the
"CBS SEC Documents"). As of their respective dates, the CBS SEC Documents
complied in all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such CBS SEC Documents, and none of
the CBS SEC Documents when filed contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any CBS SEC Document has been revised or
superseded by a later filed CBS SEC Document, none of the CBS SEC Documents
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of CBS included in the CBS SEC
Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with GAAP (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material respects
the consolidated financial position of CBS and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the
Filed CBS SEC Documents, and except for liabilities and obligations incurred
in the ordinary course of business consistent with past practice since the
date of the most recent consolidated balance sheet included in the Filed CBS
SEC Documents, neither CBS nor any of its subsidiaries has or will have any
material liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be recognized or disclosed on a
consolidated balance sheet of CBS and its consolidated subsidiaries or in the
notes thereto.
SECTION 3.5. NO FINDER
Neither CBS, the CBS Subsidiaries nor any party acting on its or their
behalf has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by any of the Transaction Agreements.
<PAGE>
25
SECTION 3.6. STATUS OF CBS AND THE CBS SUBSIDIARIES
Subject to the grant of the Waiver, CBS and the CBS Subsidiaries are
legally and financially qualified under existing law, including the
Communications Act, to (i) purchase, own, operate and control the Station and
(ii) own, by means of acquisition of the GTC Stock and the GCI Stock, the
general and limited partnership interests of the Limited Partnership. Neither
CBS nor any of the CBS Subsidiaries has knowingly taken any action which would
reasonably be expected to cause the FCC or any other Governmental Entity to
institute proceedings against CBS or any of the CBS Subsidiaries with respect
to their respective legal qualifications to acquire the GTC Stock and the GCI
Stock or knowingly taken any other action which would reasonably be expected
to result in CBS or the CBS Subsidiaries being in noncompliance in any
material respect with the ownership requirements of the Communications Act (or
of any other Governmental Entity having jurisdiction) which would impair CBS's
or the CBS Subsidiaries' qualification to be the transferee of the FCC
Authorizations.
SECTION 3.7. ABSENCE OF CERTAIN CHANGES OR EVENTS
Except as set forth in Schedule 3.7 or as disclosed in the CBS SEC
Documents filed and publicly available prior to the date of this Agreement (as
amended to the date of this Agreement, the "Filed CBS SEC Documents") or as
otherwise expressly contemplated by the Transaction Agreements, since the date
of the most recent audited financial statements included in the Filed CBS SEC
Documents, there has not been any event, change or development which
individually or in the aggregate has had or would reasonably be expected to
have a Material Adverse Effect on CBS and its subsidiaries taken as a whole or
the ability of CBS and the CBS Subsidiaries to consummate the transactions
contemplated by, or to satisfy their obligations under, the Transaction
Agreements.
SECTION 3.8. LITIGATION
Except as disclosed in the Filed CBS SEC Documents, as of the date
hereof, there is no suit, action, proceeding or investigation pending or, to
the best knowledge of CBS, threatened against CBS or any of its subsidiaries
that, individually or in the aggregate, would reasonably be expected to have a
CBS Material Adverse Effect, nor is there, subject to the grant of the Waiver,
any judgment, order, decree, statute, law, ordinance, rule or regulation of
any Governmental Entity or arbitrator outstanding against CBS or any of its
subsidiaries having, or which would reasonably be expected to have, a CBS
Material Adverse Effect.
SECTION 3.9. COMPLIANCE WITH APPLICABLE LAWS
CBS and its subsidiaries have in effect all material Permits reasonably
necessary for them to own, lease or operate their properties and assets and to
carry on their businesses as now conducted, and there has occurred no default
under any such material Permit, except for the lack of permits and defaults
that, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on CBS and its subsidiaries taken as a whole.
Except as disclosed in the Filed CBS SEC Documents, CBS and its subsidiaries
are in compliance with all judgments, orders, decrees, statutes, laws,
ordinances, rules and regulations of any Governmental Entity applicable to
them, except for possible noncompliance which individually or in the aggregate
would not reasonably be expected to have a CBS Material Adverse Effect.
SECTION 3.10. INTERIM OPERATIONS OF THE CBS SUBSIDIARIES
The CBS Subsidiaries are and will be at the Effective Time, wholly owned
subsidiaries of CBS. The CBS Subsidiaries were formed solely for the purpose
of engaging in the transactions
<PAGE>
26
contemplated hereby and have and will at the Effective Time have engaged in no
other business other than incident to their respective creation and this
Agreement and the transactions contemplated hereby.
SECTION 3.11. TAXES
(a) All federal, state and local, domestic and foreign, material Tax
Returns required to be filed by or on behalf of any of CBS or any of its
subsidiaries, or any consolidated, combined, affiliated or unitary group
of which any of CBS or any of its subsidiaries is or has ever been a
member, have been timely filed or requests for extensions have been
timely filed and any such extensions have been granted and have not
expired;
(b) each such Tax Return was complete and correct in all material
respects; and
(c) all material Taxes with respect to taxable periods covered by
such Tax Returns and all other material Taxes for which any of CBS or any
of its subsidiaries are liable have been paid in full, or reserves
therefor have been established in accordance with GAAP on the balance
sheet contained in the Filed CBS SEC Documents.
SECTION 4. ACTIONS PRIOR TO THE CLOSING DATE
The respective parties hereto covenant and agree to take the following
actions between the date hereof and the Closing Date:
SECTION 4.1. PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES
Each of the parties hereto shall refrain from taking any action which
would render any representation or warranty in this Agreement that is
qualified as to materiality inaccurate as of, and as if made on, the Closing
Date, or which would render any representation or warranty that is not so
qualified inaccurate in any material respect as of, and as if made on, the
Closing Date. Each party shall promptly notify the other of any action, suit
or proceeding that shall be instituted or threatened against such party to
restrain, prohibit or otherwise challenge the legality of any transaction
contemplated by this Agreement. Gaylord, GCI and GTC shall promptly notify CBS
of any lawsuit, claim, proceeding or investigation that is threatened,
brought, asserted or commenced against Gaylord, GCI, GTC or the Limited
Partnership which would have been required to be listed in Schedule 2.18 if
such lawsuit, claim, proceeding or investigation had arisen prior to the date
hereof.
SECTION 4.2. FCC CONSENT; IMPROVEMENTS ACT APPROVAL
(a) As promptly as practicable after the date hereof but in any
event no later than twenty (20) days hereafter, the parties hereto shall
file with the FCC applications requesting its consent to the transfer of
control of the Station pursuant to the Mergers. Simultaneously with the
filing of the applications, CBS will file with the FCC a request for the
Waiver. The parties hereto will cooperate in the preparation of such
applications and the request for the Waiver (including the furnishing to
each other of copies of such applications and request prior to filing)
and will diligently take, or cooperate in the taking of, all necessary,
desirable and proper steps, provide any additional information reasonably
required and otherwise use their reasonable efforts to prosecute the
applications and the request for the Waiver and to obtain promptly the
requested consent and approval of the FCC to the transfer of control of
the Station and the Waiver. Any fees assessed by the FCC incident to the
filing or grant of such applications shall be borne by
<PAGE>
27
CBS. The parties hereto shall make available to one another, promptly
after the filing thereof, copies of all reports filed on or prior to the
Closing Date with the FCC by any of the parties hereto, as the case may
be, in respect of the Station. Neither CBS nor the CBS Subsidiaries will
act or fail to act in such a way as would adversely affect their legal
qualifications to consummate the Mergers and the other transactions
contemplated hereby pursuant to the Communications Act.
(b) As promptly as practicable after the date hereof but in any
event no later than twenty (20) days hereafter, the parties hereto shall
file with the Federal Trade Commission (the "FTC") and the Antitrust
Division of the Department of Justice ("DOJ") the notifications and other
information required to be filed by such commission or department under
the Improvements Act, or any rules and regulations promulgated
thereunder, with respect to the transactions contemplated hereby. Each of
the parties hereto covenants to file as promptly as practicable such
additional information as may be requested to be filed by such commission
or department. Each of the parties hereto warrants that all such filings
by it will be, as of the date filed, true and accurate in all material
respects and in accordance with the requirements of the Improvements Act
and any such rules and regulations. Gaylord and CBS shall each pay
one-half of the filing fees payable under the Improvements Act in
connection with the notifications and information described in this
Section 4.2(b).
(c) Notwithstanding any other provision of this Agreement, in the
event the approval of the FCC under Section 4.2(a) is conditioned upon
(i) the outcome of the FCC's pending rule-making proceeding with respect
to the FCC's television ownership rules (MM Docket Nos. 91- 221 and 87-8)
or (ii) the divestiture by CBS of any (A) broadcast stations in the
Dallas/Forth Worth area or (B) television stations necessary in order to
comply with the FCC's national multiple ownership rule, 47 CFR Section
73.3555(e), CBS agrees promptly and at its sole expense to take any and
all actions necessary to accept and to comply with such conditions in
order to consummate the Mergers in accordance with this Agreement without
undue delay or prejudice to Gaylord.
SECTION 4.3. OPERATIONS PRIOR TO THE CLOSING DATE
(a) Except as permitted by this Agreement, including the provisions
of Section 4.3(b), or as approved by CBS as provided below, the Limited
Partnership shall operate and carry on the business of the Station, and
the business of GTC, GCI and the Limited Partnership shall be operated
and carried on, only in the ordinary course consistent with past practice
and in compliance in all material respects with all applicable laws,
rules and regulations. Consistent with the foregoing and subject to
Section 4.3(b), the Limited Partnership shall: (i) retain ownership of
and maintain its assets in good operating condition and repair consistent
with past practices and the intended use of such assets (wear and tear in
ordinary usage excepted), (ii) use its reasonable efforts to retain the
Station's libraries of films and other programming, to maintain the
business organization of the Station intact, to keep available the
services of the current officers and other key employees and to preserve
the goodwill of the suppliers, contractors, licensors, employees,
customers, distributors and others having business relations with the
Station, (iii) maintain the budgeted level of expenditures for marketing
and promotions, and (iv) continue any remediation efforts relating to
compliance with Year 2000 issues as described in Section 2.24. The
Limited Partnership shall complete construction and commence operation of
the DTV Facility on or before May 1, 1999, and shall take all other
steps, including the timely submission of all required notices, reports,
forms, applications and other statements or disclosures, that are
necessary to satisfy the FCC's requirements with respect to the
implementation of DTV service. Without limiting the foregoing, and except
as permitted by this Agreement, including the provisions of Section
4.3(b), or except with the express prior written approval of CBS, none of
Gaylord and its subsidiaries, including GTC and GCI, and the Limited
Partnership shall:
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28
(i) amend any of the Organizational Documents;
(ii) make any material change in the operations of the Station;
(iii) sell, lease, transfer or otherwise dispose of any of the
assets of GCI, GTC or the Limited Partnership, other than (A)
tangible personal property having a value, in the aggregate, of less
than $50,000 sold or otherwise disposed of in the ordinary course of
business consistent with past practice and (B) tangible personal
property replaced in the ordinary course of business consistent with
past practice with items of substantially the same nature and of
equal or greater quality;
(iv) enter into any lease of real property with respect to the
Station, except any renewals of existing leases in the ordinary
course of business consistent with past practice and as to which CBS
shall be permitted to participate in the negotiation of the terms;
(v) permit any of the assets of GTC, GCI or the Limited
Partnership to become subject to any Encumbrance, other than
Permitted Encumbrances;
(vi) create, incur, guarantee or assume any indebtedness for
borrowed money or enter into any capitalized leases, but, with
respect to Gaylord, only to the extent any such indebtedness or
lease relates to GTC, GCI, the Limited Partnership or the Station;
(vii) make any change in the compensation of the employees of
the Station, other than changes required to be made in accordance
with existing agreements, the renewal of employment agreements in
the ordinary course of business, and normal compensation practices,
in each case consistent with past practice;
(viii) make any change in the accounting policies applied in
the preparation of the Financial Statements contained in Schedule
2.4;
(ix) cancel any material indebtedness (other than Accounts
Receivable) owed to, or waive any material claims held by, GCI, GTC
or the Limited Partnership;
(x) delay payment of any account payable or other liability of
GCI, GTC or the Limited Partnership beyond its due date or the date
when such liability would have been paid in the ordinary course of
business consistent with past practice;
(xi) institute any increase in any profit sharing, bonus,
incentive, deferred compensation, insurance, pension, retirement,
medical (except for a contemplated contract with a preferred
provider organization), hospital, disability, welfare or other
employee benefit plan with respect to employees of the Station other
than (A) as required by law, (B) changes made in accordance with
normal practices consistent with past practice that are not, in the
aggregate, material in amount or effect, or changes which affect
Gaylord's employees on a company-wide basis or (C) stay-on or reward
bonuses or similar incentives paid by Gaylord in its discretion;
(xii) cause or permit, by any act or failure to act, any of the
FCC Authorizations or other material Permits of GCI, GTC or the
Limited Partnership to expire, to be modified in any materially
adverse respect, to be revoked, or to be suspended; or take, or fail
to take, any action that would be reasonably likely to cause the FCC
or any other Governmental Entity to institute proceedings for the
suspension, revocation or materially adverse modification of any of
the FCC Authorizations or other material Permits of GCI, GTC or the
Limited Partnership;
<PAGE>
29
(xiii) pay, loan or advance any amount to, or sell, transfer or
lease any of the assets of GCI, GTC or the Limited Partnership to,
or enter into any agreement or arrangement with, Gaylord, GCI, GTC,
the Limited Partnership or any of their Affiliates other than
intercompany transactions in the ordinary course of business
consistent with past practice, none of which shall survive the
Effective Time;
(xiv) permit GCI, GTC or the Limited Partnership to acquire, in
any manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire any assets that are material;
(xv) with respect to GCI, GTC and the Limited Partnership, make
any material Tax election or settle or compromise any material Tax
liability or refund;
(xvi) with respect to the Station, waive any material right
under the Cable Act Requirements, fail to timely provide to any
Market Cable System a must-carry notice or retransmission consent
notice in accordance with the Cable Act Requirements (including any
such notice necessary for such notice to be effective for the
three-year period beginning in 1999 and ending in 2002), or reach
any agreement or understanding with any Market Cable System on the
subject of retransmission consent or must-carry under the Cable Act
Requirements without prior consultation with CBS;
(xvii) take any action which would materially adversely affect
CBS's ability to deliver the certificate contemplated by Section
7.6; or
(xviii) authorize, or commit or agree to take, whether in
writing or otherwise, any of the foregoing actions.
Gaylord agrees that CBS shall have the right to approve any contract or
other agreement to be entered into by GCI, GTC or the Limited Partnership
involving payments of more than $500,000 during its term or in connection
with its termination, or having a duration of more than one (1) year;
provided, however, that such approval shall not be unreasonably withheld
by CBS; and provided further that the Limited Partnership shall be
permitted to enter into a contract substantially on the terms as set
forth on Schedule 4.3(a) without the approval of CBS.
(b) Notwithstanding anything to the contrary in this Agreement or
any of the other Transaction Agreements, between the date hereof and the
Effective Time, GTC, GCI and the Limited Partnership shall transfer to
Gaylord or any Affiliate of Gaylord (other than GTC, GCI or the Limited
Partnership), any of the following assets, for any consideration (so long
as such consideration does not involve the assumption by GTC, GCI or the
Limited Partnership of attendant liabilities), or for no consideration,
but at the expense of Gaylord:
(i) all of GTC's, GCI's and the Limited Partnership's cash and
cash equiva lents (including any marketable securities or
certificates of deposit), and all intercompany receivables and
payables as of the Effective Time;
(ii) all rights to refunds for prepaid expenses including
prepayment for bonds, contracts or policies of insurance and prepaid
insurance with respect to such contracts or policies as of the
Effective Time;
<PAGE>
30
(iii) all records prepared in connection with the sale of the
Station (other than records prepared for CBS or its Affiliates in
connection with this Agreement), including bids received from others
and analyses relating to the Station and the Station's assets;
(iv) except to the extent the parties shall otherwise
specifically agree in writing, all rights, obligations and assets
under the Benefit Plans;
(v) all of the Limited Partnership's Accounts Receivable,
including rights and claims to payments made by the Copyright
Royalty Tribunal and related to the operations of the Station
arising out of transactions occurring prior to the Closing Date;
(vi) all of the Limited Partnership's, GTC's and GCI's right,
title and interest in and to that certain unused parcel of real
estate, and the abandoned structure thereon, in Fort Worth, Texas,
which real estate and structure are not involved in the current
operations of the Station and are more particularly described on
Schedule 2.8, and all of the Limited Partnership's interest in any
Affiliate (that owns no assets related to the Station) to whom it
may transfer such parcel;
(vii) all of Gaylord's and its Affiliates' Intellectual
Property and Technology not used primarily in connection with the
Station, including all computer software programs (whether or not
used primarily in connection with the Station, and whether or not
owned by Gaylord or its Affiliates) relating to the general ledger,
accounts payable, payroll, and human resources of the Station;
(viii) the programming contracts set forth on Schedule 4.3(b);
and
(ix) all of the Limited Partnership's, GTC's and GCI's rights
and obligations under that certain Advertising Agreement dated as of
December 4, 1998, by and among Marcus Cable Operating Company, LLC,
Charter Communications, Inc., and the Limited Partnership.
Gaylord hereby assumes all liabilities and obligations of any nature
(whether accrued, absolute, unasserted, contingent or otherwise)
relating to any of the foregoing.
(c) Gaylord shall, within fifteen (15) days after the end of each
month, provide CBS with copies of (i) the unaudited income statement of
the Limited Partnership for such month and (ii) the unaudited balance
sheet of the Limited Partnership as of the end of such month.
SECTION 4.4. COLLECTION OF ACCOUNTS RECEIVABLE
(a) At the Closing, Gaylord shall designate CBS, by means of a
mutually acceptable agency agreement, as its agent solely for purposes of
collecting on behalf of Gaylord the Accounts Receivable. Gaylord shall
deliver to CBS, on or immediately after the Closing Date, a complete and
detailed statement of the Accounts Receivable. CBS shall make reasonable
efforts to collect the Accounts Receivable during the period (the
"Collection Period") beginning at the Effective Time and ending on the
last day of the fifth full calendar month following the Closing Date. Any
payment received by CBS (i) at any time following the Effective Time,
(ii) from a customer of the Station after the Effective Time who was also
a customer of the Station prior to the Effective Time and (iii) which is
not designated as a payment of a particular invoice or invoices or as a
security deposit or other prepayment, shall be presumptively applied to
the accounts receivable for such customer outstanding for the longest
amount of time and, if such
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accounts receivable shall be an Accounts Receivable, remitted to Gaylord
in accordance with Section 4.4(b); provided, however, that if, prior to
the Effective Time, the Limited Partnership or, after the Effective Time,
the Limited Partnership or CBS received or receives a written notice of
dispute from a customer with respect to an Accounts Receivable that has
not been resolved, then CBS shall apply any payments from such customer
to such customer's oldest, non-disputed accounts receivable. CBS shall
not be obligated to refer any of the Accounts Receivable to a collection
agency or to an attorney for collection. CBS shall incur no liability to
Gaylord for any collected or uncollected Accounts Receivable. During the
Collection Period, neither Gaylord nor its agents, without the consent of
CBS, shall make any direct solicitation of any customers owing the
Accounts Receivable for collection purposes.
(b) On or before the fifth day following the end of each calendar
month in the Collection Period, CBS shall deposit into an account
identified by Gaylord at the time of Closing the amounts collected during
the preceding month of the Collection Period with respect to the Accounts
Receivable. CBS shall furnish Gaylord with a list of the amounts
collected during such calendar month with respect to the Accounts
Receivable and a schedule of the amount remaining outstanding under each
particular account. Gaylord shall be entitled to inspect and/or audit the
records maintained by CBS pursuant to this Section 4.4 from time to time,
upon reasonable advance notice.
(c) Following the expiration of the Collection Period, CBS shall
have no further obligations under this Section 4.4, except that CBS shall
immediately pay over to Gaylord any amounts subsequently paid to it with
respect to any Accounts Receivable. Following the Collection Period,
after consultation with CBS, Gaylord may pursue collections of all
Accounts Receivable, and CBS shall deliver to Gaylord all files, records,
notes and any other materials relating to the Accounts Receivable.
SECTION 4.5. PUBLIC ANNOUNCEMENT
None of the parties hereto shall, without the approval of the other, make
any press release or other public announcement concerning the transactions
contemplated by this Agreement, except as and to the extent that any such
party shall be so obligated by law or by the rules, regulations or policies of
any national securities exchange or association or Governmental Entity, in
which case the other parties shall be advised and the parties shall use their
best efforts to cause a mutually agreeable release or announcement to be
issued; provided, however, that the parties hereby acknowledge and agree that
communications among employees of the parties hereto and their attorneys,
representatives and agents necessary to consummate the transactions
contemplated hereby shall not be deemed a public announcement for purposes of
this Section 4.5. Upon the execution and delivery of this Agreement, the
parties hereto will cooperate in respect of the immediate issuance of a
mutually acceptable press release relating to the transactions contemplated by
this Agreement.
SECTION 4.6. COMPLIANCE WITH LAWS
From the date hereof until the Effective Time, none of the parties hereto
shall take any action in respect of the operations, employees or business of
the Station which violates, in any material respect, any law, regulation,
rule, writ, injunction, ordinance, franchise, decree or order of any court or
of any foreign, federal, state, municipal or other Governmental Entity
applicable to the Station or the operations, assets, employees or business of
the Station.
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SECTION 4.7. ADVICE OF CHANGES
From the date hereof until the Effective Time, CBS and Gaylord shall
promptly advise the other party orally and in writing of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or
any such representation or warranty that is not so qualified becoming untrue
or inaccurate in any material respect, (ii) the failure by any party or one of
its Affiliates to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement or (iii) any change or event (x) having, or which can reasonably be
expected to have, in the case of CBS, a Material Adverse Effect on CBS and its
subsidiaries taken as a whole and, in the case of Gaylord, a Gaylord Material
Adverse Effect, (y) having, or which can reasonably be expected to have, the
effect set forth in clause (i) above, or (z) which has resulted, or which can
reasonably be expected to result, in any of the conditions set forth in
Sections 6 or 7 not being satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 4.8. NO SOLICITATION
Gaylord shall not, nor shall Gaylord permit any Affiliate or any officer,
director or employee of Gaylord or any Affiliate to (i) solicit, initiate or
encourage any "other bid", (ii) enter into any agreement with respect to any
other bid or (iii) participate in any negotiations regarding any other bid. As
used in this Section 4.9, "other bid" shall mean any proposal for a merger,
sale of securities, sale of substantial assets or similar transaction
involving GCI, GTC or the Limited Partnership, other than the transactions
contemplated by this Agreement.
SECTION 4.9. OTHER CONSENTS
Without limiting the provisions of Section 4.2, Gaylord, GTC, GCI, the
Limited Partnership and CBS shall use all reasonable efforts to obtain or
cause to be obtained prior to the Closing Date any necessary consents from any
person (other than the FCC, DOJ or the FTC, which are covered in Section 4.2)
to the assignment to CBS of any contract, license or other instrument and
right of Gaylord, GTC, GCI and the Limited Partnership that requires the
consent of any third party by reason of the transactions provided for in this
Agreement, and CBS will reasonably cooperate with Gaylord, GTC, GCI and the
Limited Partnership in this regard, but neither Gaylord, GTC, GCI, the Limited
Partnership nor CBS will be obligated to make any special payment or grant any
special concession to any party. For such purpose but without limitation,
Gaylord, GTC, GCI and the Limited Partnership promptly will at and after the
Closing execute and deliver to CBS such assignments, deeds, bills of sale,
consents and other instruments as CBS or its counsel may reasonably request as
necessary or desirable for such purpose.
SECTION 4.10. NOTICE OF PROCEEDINGS
The parties shall notify each other orally and in writing upon (i)
becoming aware of any order or decree or any complaint praying for an order or
decree restraining or enjoining the consummation of this Agreement or the
transactions contemplated hereunder or (ii) receiving any notice from any
Governmental Entity of its intention (x) to institute an investigation into,
or institute a suit or proceeding to restrain or enjoin, the consummation of
this Agreement or the transactions contemplated hereunder or (y) to nullify or
render ineffective this Agreement or the transactions contemplated hereunder
if consummated.
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33
SECTION 4.11. TRADE AGREEMENTS
There shall be no proration of current assets and liabilities with
respect to trade and/or barter agreements under Section 1.13 or otherwise.
Gaylord shall use its reasonable efforts to air the advertising contemplated
under any trade and/or barter agreements to the fullest extent practicable
prior to Closing. Gaylord shall not enter into any new trade and/or barter
agreements prior to Closing without the consent of CBS, other than renewals of
existing trade and/or barter agreements in the ordinary course of business.
SECTION 4.12. CONFIDENTIALITY AGREEMENTS
Gaylord hereby assigns, effective at the Closing, to CBS its rights under
all confidentiality agreements entered into by Gaylord or any of its
subsidiaries with any person in connection with the proposed sale of the
Station to the extent such rights relate to GTC, GCI, the Limited Partnership
or the Station. Copies of such agreements shall be provided to CBS on the
Closing Date.
SECTION 5. ADDITIONAL AGREEMENTS
SECTION 5.1. SALES, USE AND TRANSFER TAXES, TITLE INSURANCE
Any sales, use, documentary, stamp or other transfer Taxes payable by
reason of the transactions contemplated by this Agreement shall be paid
exclusively by CBS, except that all of the foregoing relating to the transfers
referred to in Section 4.3(b) shall be paid by Gaylord. CBS and Gaylord shall
cooperate in timely preparing and filing all Tax Returns with respect to such
Taxes as may be required to comply with applicable laws. The costs of any
commitments for title insurance and/or surveys obtained by CBS in connection
with this transaction shall be paid solely by CBS.
SECTION 5.2. EMPLOYEES; EMPLOYEE BENEFIT PLANS
CBS, GTC and GCI agree to the following matters with regard to employees
of GTC, GCI, the Limited Partnership, or the Station after the Effective Time:
(a) CBS, GTC and GCI will continue the employment of all actively
employed (including employees on short term disability leave of absence)
Station Employees as of the Effective Time. Following the Effective Time,
CBS shall maintain, or shall cause the Limited Partnership to maintain,
on behalf of the Station Employees base compensation at the same level as
in effect immediately prior to the Effective Time and employee benefit
plans and arrangements that are, in the aggregate, comparable to the
employee benefit plans and arrangements in effect from time to time after
the Effective Time for similarly situated employees of CBS in its
broadcasting businesses; provided, however, that no Station Employee
shall be entitled to participate in CBS's and its Affiliates'
tax-qualified or non-qualified defined benefit pension or excess plans,
including any cash balance component thereof. Notwithstanding the
foregoing, for not less than six months following the Effective Time, CBS
shall provide, or cause the Limited Partnership to provide, severance pay
and severance benefits to each Station Employee that are no less
favorable than under the Benefit Plans or Gaylord's existing employment
policies (except where otherwise provided in existing employment or
personal services agreements). Notwithstanding the foregoing, except
where existing employment or personal services agreements provide
otherwise, CBS shall have the right to make changes or cause changes to
be made in compensation, benefits and other terms of employment and to
terminate the employment of any employee as CBS determines in its sole
discretion. Nothing in this Agreement shall be construed as granting to
any employee any rights of continuing employment.
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34
(b) For purposes of providing health insurance coverage to Station
Employees, CBS shall waive (or obtain a waiver of) all preexisting
condition limitations for all such employees who are covered by the
Station's existing health care plan as of the Effective Time (other than
known preexisting conditions that were excluded by the Station's health
care plan) and shall provide such health care coverage effective as of
the Effective Time without the application of any eligibility period for
coverage (unless a waiting period applied under the Station's plan). In
addition, CBS shall credit all payments made by such employees and their
dependents (pursuant to the Station's existing health care plan as of the
Effective Time) toward deductible, co-payment, out-of-pocket and lifetime
limits under CBS's health care and dental care plans for the plan year
that includes the Effective Time.
(c) As of the Effective Time, CBS, GTC and GCI will provide all
Station Employees with credit for years of service at the Station or
Gaylord or its Affiliates for eligibility and vesting purposes (but not
for benefit accrual purposes or where it would result in a duplication of
benefits) under CBS' applicable benefit plans, including severance
arrangements (excluding, for this purpose, any Station Employee who is a
key employee listed in Schedule 5.2(e) and any other Station Employee
with an employment or personal services agreement which would provide
otherwise in respect of severance payable thereunder), but only to the
extent credited under the applicable Benefit Plan or other applicable
Gaylord plan. Without limiting the foregoing, all Station Employees shall
be entitled to full credit for years of service with respect to their
right (if any) to receive stock options under CBS's Fund the Future
Program.
(d) CBS shall indemnify and hold harmless Gaylord and its Affiliates
from and against any liabilities or obligations in connection with the
Workers Adjustment and Retraining Notification Act (or any similar state
or local law) in connection with this transaction, other than any
liabilities or obligations relating to a violation by Gaylord of such act
(or such similar state or local law) prior to the Effective Time.
(e) The parties agree to those provisions set forth in Schedule
5.2(e).
(f) Except as specifically provided in this Section 5.2, Gaylord
shall retain responsibility for (i) sponsorship of all of the Benefit
Plans, all other applicable Gaylord benefit and compensation plans, and
any other benefit or compensation plans formerly made available to
employees, and (ii) all liabilities and obligations for employee benefits
(including Gaylord employee stock options) and for claims relating to
employment (or termination of employment) which are in respect of (y)
retirees and other former employees of GTC, GCI, the Limited Partnership
and the Station (regardless of whether such liabilities accrued before,
on or following the Closing) and (z) Station Employees to the extent the
event or events giving rise to the liability or obligation occurred
predominantly on or prior to the Closing.
(g) Effective as of the Effective Time, each Station Employee
participating in the Gaylord Pension Plan as of the Effective Time shall
become fully vested in his or her accrued benefit under the Gaylord
Pension Plan.
(h) Effective as of the Effective Time, CBS shall have in effect a
profit-sharing plan that includes a qualified cash or deferred
arrangement within the meaning of Section 401(k) of the Code (the "CBS
401(k) Plan") that will provide benefits to Station Employees as of the
Effective Time. Each Station Employee participating in the Gaylord 401(k)
Plan as of the Effective Time shall become a participant in CBS' 401(k)
Plan as of the Effective Time. Effective as of the Effective Time, each
Station Employee participating in the Gaylord 401(k) Plan as of the
Effective Time shall become fully vested in his or her account balance
under the Gaylord 401(k) Plan.
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35
SECTION 5.3. GAYLORD SUBSIDIARIES AND THE LIMITED PARTNERSHIP TO
CONTROL OPERATIONS PRIOR TO CLOSING DATE
At all times commencing on the date hereof and ending on the Closing
Date, the operation, management, control and supervision of all programs,
equipment, operations and other activities of the Station shall be the sole
responsibility and shall remain within the complete control and discretion of
the Gaylord Subsidiaries and the Limited Partnership. Neither CBS, the CBS
Subsidiaries nor any of their respective employees, agents or representatives,
directly or indirectly, shall (or have any right to) control, direct or
otherwise supervise, or attempt to control, direct or otherwise supervise any
of the management or operations of the Station.
SECTION 5.4. COPYRIGHT ROYALTY TRIBUNAL PAYMENTS
To the extent not included in the prorations under Section 1.13, CBS
agrees promptly upon receipt to remit to Gaylord any payments received by CBS
as a Copyright Royalty Tribunal Payment attributable to the Limited
Partnership's ownership and operation of the Station prior to the Closing
Date.
SECTION 5.5. ACCESS TO INFORMATION
Subject to the provisions of Section 10.2, and upon reasonable notice,
Gaylord shall, and shall cause each of its subsidiaries to, afford to CBS, its
subsidiaries and their employees, officers, accountants, counsel, financial
advisors and other representatives, reasonable access during normal business
hours during the period prior to the Effective Time to all of its properties,
books, contracts, management personnel and records relating to GTC, GCI, the
Limited Partnership and the Station; provided, however, that, to the extent
reasonably possible, such access shall be at Gaylord's offices in Nashville,
Tennessee, and shall not unreasonably interfere with the normal operations of
the Station. During such period, CBS shall, and shall cause each of its
subsidiaries to, furnish promptly to Gaylord upon request a copy of each
report, schedule, registration statement and other document required to be
filed by it during such period pursuant to the requirements of Section 13(a)
of the Exchange Act.
SECTION 5.6. REASONABLE BEST EFFORTS
Upon the terms and subject to the conditions set forth in this Agreement,
CBS and Gaylord each agrees to use its reasonable best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things reasonably
necessary, proper or advisable to consummate and make effective, in a timely
manner, the Mergers and the other transactions contemplated by the Transaction
Agreements, including (i) the obtaining of all necessary actions or
non-actions, waivers (including the Waiver), consents, approvals, orders and
authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings and the taking of all steps as may be
reasonably necessary to obtain an approval, waiver (including the Waiver),
order or authorization from, or to avoid an action or proceeding by, any
Governmental Entity, including the actions or divestitures by CBS or its
Affiliates contemplated by Section 4.2(c), if required as a condition to the
approval of the FCC or the satisfactory conclusion of DOJ and/or FTC review
under the Improvements Act, (ii) the obtaining of all necessary waivers,
consents, approvals, orders or authorizations from third parties, (iii) the
defending of any suit, action or proceeding, whether judicial or
administrative, challenging any Transaction Agreement or the consummation of
any of the transactions contemplated by any
<PAGE>
36
Transaction Agreement, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated or
reversed and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry
out the purposes of, the Transaction Agreements. Gaylord shall obtain the
consent to assignment of the microwave lease between the Limited Partnership
and Dallas Main Center Limited Partnership and the lease with Crescent Real
Estate, each as listed in Schedule 2.8 or, if such consents cannot be
obtained, enter into replacement leases on terms not materially more
disadvantageous to CBS, GTC, GCI and the Limited Partnership than those
contained in the current microwave lease and Crescent Real Estate lease. CBS
shall use its reasonable best efforts to cause the shares of CBS Common Stock
issued and delivered to Gaylord hereunder to be registered pursuant to an
effective registration statement under Section 5 of the Securities Act to be
registered or otherwise duly qualified under all appropriate state securities
or "blue sky" laws or regulations, and to be approved for listing on the NYSE.
SECTION 5.7. USE OF GAYLORD NAME
Immediately following the Effective Time, CBS shall cause the surviving
corporations of the Mergers to: (i) cease and desist from all further use of
the name "Gaylord", or any trade names, trademarks, identifying logos or
service marks related thereto (including "Gaylord Broadcasting" and "GBC"), or
any part or variation of any of the foregoing or any confusingly similar trade
names, trademarks or logos (collectively, "Gaylord's Trademarks and Logos");
and (ii) to adopt new trade names, trademarks, identifying logos and service
marks related thereto which are not confusingly similar to Gaylord's
Trademarks and Logos. Nothing in this Section 5.7 shall prohibit CBS and the
surviving corporations of the Mergers from using Gaylord's Trademarks and
Logos to the extent reasonably necessary to fulfill their obligations under
the Transaction Agreements; and provided further, that CBS and its
subsidiaries, including the Limited Partnership, shall be permitted a
reasonable time to transition signage, stationery, business cards, and the
like, it being understood that CBS will use all reasonable efforts to expedite
such transition.
SECTION 5.8. ENVIRONMENTAL STUDY
Within forty-five (45) days after the execution of this Agreement, CBS
shall obtain, at its expense, and present to Gaylord, a Phase I environmental
report (the "Phase I Report") from a licensed environmental engineer or firm
(which shall be reasonably acceptable to Gaylord) with respect to the
Station's real property. If the Phase I Report discloses conditions which
require, in the opinion of the environmental engineer or firm performing the
assessment, further sampling or investigation, Gaylord and the Limited
Partnership shall grant CBS and its agents reasonable access to the Station's
real property, and CBS shall cause such sampling or investigation to be
performed at its expense and shall present the results and recommendations of
the engineer or firm to Gaylord (the "Phase II Report"). Gaylord shall be
responsible for the prompt correction or remediation of any environmental,
health or safety violations or conditions disclosed in the Phase I Report or
the Phase II Report, to the extent required by applicable law or any relevant
Governmental Entity, it being understood that the remediation may continue
following the Closing. The studies contemplated by this Section 5.8 and the
remediation efforts in response thereto shall not hinder or delay the Closing
of the transactions contemplated by this Agreement.
SECTION 5.9. AGREEMENT NOT TO COMPETE
(a) Gaylord and its subsidiaries shall not, and shall cause each of
their Affiliates not to, directly or indirectly: (i) for a period of
eighteen (18) months from the Effective Time own,
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37
manage, operate, join, control or participate in the ownership,
management, operation or control of, or permit the use of the Gaylord
name by, or be connected in any manner with, any television broadcast
station within a 75 mile radius from the Station's main transmitter site;
(ii) for a period of twenty-four (24) months from the Effective Time
induce or attempt to induce any Station Employee to leave the employ of
the Station; (iii) knowingly hire for work in the Dallas/Fort Worth area
any voluntarily terminating Station Employee for a period of six (6)
months following such Station Employee's termination; (iv) knowingly hire
for work outside the Dallas/Fort Worth area any voluntarily terminating
Station Employee for a period of three (3) months following such Station
Employee's termination; or (v) for a period of twenty-four (24) months
from the Effective Time induce or attempt to induce any person, business
or entity which is an advertiser with or supplier of the Station, or
which otherwise is a contracting party with the Station, as of the
Effective Time or at any time during the twenty-four (24) month period,
to terminate any written or oral agreement or understanding with the
Station. Nothing contained herein shall prevent Gaylord or its Affiliates
from hiring any Station Employee involuntarily terminated by the Station.
(b) Notwithstanding the provisions of Section 5.9(a), Gaylord or its
Affiliates shall be entitled to invest in or otherwise affiliate with one
or more entities that operate one or more television broadcast stations
within a 75 mile radius from the Station's main transmitter site, so long
as, during the eighteen (18) month period, Gaylord does not participate,
directly or indirectly, in the operation of such television broadcast
station.
(c) Notwithstanding any other provision of this Agreement, it is
understood and agreed that the remedy of indemnity payments pursuant to
Section 8 and other remedies at law would be inadequate in the case of
any breach of the covenants contained in Section 5.9(a). CBS and its
subsidiaries shall be entitled to equitable relief, including the remedy
of specific per formance, with respect to any breach or attempted breach
of such covenants.
SECTION 5.10. WAIVER OF CERTAIN CLAIMS
Neither CBS nor its Affiliates shall be entitled to sue or otherwise
prosecute a claim or cause of action for breach of fiduciary duty on behalf of
the Limited Partnership, GTC or GCI (or their successors in interest) against
any of their officers or directors with respect to any act or omission
occurring prior to the Closing Date.
SECTION 5.11. RECORDS
As soon as practicable following the Closing Date, Gaylord shall deliver
or cause to be delivered to CBS all agreements, documents, books, records and
files, including records and files stored on computer disks or tapes or any
other storage medium (collectively, "Records"), if any, in the possession of
Gaylord or any of its subsidiaries (except GCI and GTC) relating to the
business and operations of GCI, GTC, the Limited Partnership and the Station
to the extent not then in the possession of GCI, GTC and the Limited
Partnership, subject to the following exceptions:
(a) CBS recognizes that certain Records may contain incidental
information relating to GCI, GTC, the Limited Partnership or the Station
or may relate primarily to subsidiaries, divisions or businesses of
Gaylord other than GCI, GTC, the Limited Partnership and the Station, and
that Gaylord may retain such Records and shall provide copies of the
relevant portions thereof to CBS;
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(b) Gaylord may retain all Records prepared in connection with the
sale of the Station, including bids received from other parties and
analyses relating to the Limited Partnership and the Station; and
(c) Gaylord may retain any Tax Returns, and CBS shall be provided
with copies of such Tax Returns if they relate to GCI's, GTC's or the
Limited Partnership's separate Tax Returns or separate Tax liability.
SECTION 5.12. POST CLOSING MATTERS
The parties agree to the following, from and after the Effective Time:
(a) In the event that prior to the Effective Time any asset of the
Station suffers any damage, destruction or other casualty loss, Gaylord
shall surrender to CBS after the Effective Time (i) all insurance
proceeds received with respect to such damage, destruction or loss, less
any proceeds applied to the physical restoration of such asset, and (ii)
all rights of Gaylord with respect to any causes of action, whether or
not litigation has commenced as of the Effective Time, in connection with
such damage, destruction or loss. Gaylord shall make available to CBS the
benefit of any workers' compensation, general liability, product
liability, automobile liability, umbrella (excess) liability or crime or
other insurance policy covering GTC, GCI, the Limited Partnership or the
Station with respect to insured events or occurrences prior to the
Effective Time (whether or not claims relating to such events or
occurrences are made prior to or after the Effective Time); provided,
however, that (i) all of Gaylord's costs and expenses incurred in
connection with the foregoing shall promptly be paid by CBS, and (ii) the
benefits of such insurance shall be subject to (and recovery thereon
shall be reduced by the amount of) any applicable deductibles and
co-payment provisions or any payment or reimbursement obligations of
Gaylord in respect thereof. Gaylord shall promptly pay to CBS all
insurance proceeds relating to the business of the Station received by
Gaylord or its subsidiaries under any insurance policy.
(b) Subject to the provisions of Section 5.7, and to the extent
permitted by any third party licensor, CBS shall have a limited license
to use the Intellectual Property and Technology transferred pursuant to
Section 4.3(b) or that is not owned by GCI, GTC or the Limited
Partnership but is used in the operation of the business of the Station
for a period of ninety (90) days following the Effective Time; provided,
however, that CBS shall use all reasonable efforts to make the transition
to its own computer programs and systems and to terminate its reliance on
the Intellectual Property and Technology as quickly as possible. To the
extent that CBS reasonably requires a license beyond the first ninety
(90) day period, CBS shall make a request to that effect to Gaylord, or
to any applicable third party licensor, specifying the reasons for such
need, and Gaylord shall not unreasonably withhold its consent to an
extension of the limited license for up to an additional ninety (90)
days.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF CBS
The obligations of CBS under this Agreement shall be subject to the
satisfaction (or waiver by CBS), on or prior to the Closing Date, of the
following conditions. CBS shall not be entitled to assert the failure of any
condition set forth herein if such failure is caused, in whole or in material
part, by CBS' breach of any covenant or agreement hereunder.
SECTION 6.1. CORPORATE ACTION
Gaylord and the Gaylord Subsidiaries shall have taken all action
necessary to approve the transactions contemplated by this Agreement, and
shall have delivered certified copies of the
<PAGE>
39
resolutions of the boards of directors of Gaylord and the Gaylord
Subsidiaries, and unanimous resolutions of the shareholders of the Gaylord
Subsidiaries, approving the transactions contemplated by this Agreement.
SECTION 6.2. WAITING PERIOD; NO RESTRAINT OR INJUNCTION
Any applicable waiting period under the Improvements Act shall have
expired or have been terminated and there shall not be in effect any
preliminary or permanent injunction or other order, decree or ruling by a
court of competent jurisdiction, and there shall not be in effect any
temporary restraining order of a court of competent jurisdiction, which, in
either case, restrains or prohibits the transactions contemplated hereby.
SECTION 6.3. FCC CONSENT
The FCC Consent shall have been issued, without any condition or
qualification that is materially adverse to CBS or its subsidiaries or the
Station, and shall have become a Final Order; provided, however, that a
condition contemplated by Section 4.2(c) shall not constitute such a material
adverse condition or qualification.
SECTION 6.4. REPRESENTATIONS AND WARRANTIES
Subject to Section 10.16, the representations and warranties of Gaylord
in this Agreement and the Tax Matters Agreement shall be true and correct as
of the date hereof and as of the Closing Date as though made on the Closing
Date, except to the extent that such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
shall be true and correct on and as of such earlier date), in each case except
for breaches as to matters that, individually or in the aggregate, would not
reasonably be expected to have a Gaylord Material Adverse Effect the
consequences of which substantially impair the physical assets or economic
value or prospects of the Station taken as a whole.
SECTION 6.5. NYSE LISTING
The shares of CBS Common Stock to be issued and delivered to Gaylord
pursuant to the Mergers shall have been approved for listing on the NYSE,
subject to official notice of issuance.
SECTION 6.6. BREACH OF COVENANT BY GAYLORD
Subject to Section 10.16, Gaylord shall not have materially breached its
obligations in any covenant or agreement hereunder.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF GAYLORD
The obligations of Gaylord under this Agreement shall be subject to the
satisfaction (or waiver by Gaylord), on or prior to the Closing Date, of the
following conditions. Gaylord shall not be entitled to assert the failure of
any condition set forth herein if such failure is caused, in whole or in
material part, by Gaylord's breach of any covenant or agreement hereunder.
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SECTION 7.1. CORPORATE ACTION
CBS and the CBS Subsidiaries shall have taken all corporate action
necessary to approve the transactions contemplated by this Agreement, and
shall have delivered certified copies of the resolutions of the boards of
directors of CBS and the CBS Subsidiaries, and unanimous resolutions of the
shareholders of the CBS Subsidiaries, approving the transactions contemplated
by this Agreement.
SECTION 7.2. WAITING PERIOD; NO RESTRAINT OR INJUNCTION
Any applicable waiting period under the Improvements Act shall have
expired or been terminated and there shall not be in effect any preliminary or
permanent injunction or other order, decree or ruling by a court of competent
jurisdiction, and there shall not be in effect any temporary restraining order
of a court of competent jurisdiction, which, in either case, restrains or
prohibits the transactions contemplated hereby.
SECTION 7.3. FCC CONSENT
The FCC Consent shall have been issued and become effective, without any
condition or qualification which is materially adverse to Gaylord.
SECTION 7.4. REGISTRATION OF SHARES
The registration statement to be filed with respect to the shares of CBS
Common Stock to be issued and delivered to Gaylord pursuant to the Mergers
shall have become effective under the Securities Act and shall not be the
subject of any stop order or proceedings seeking a stop order, and CBS shall
have received all state securities or "blue sky" authorizations necessary to
issue the CBS Common Stock pursuant to the Mergers.
SECTION 7.5. NYSE LISTING
The shares of CBS Common Stock to be issued and delivered to Gaylord
pursuant to the Mergers shall have been approved for listing on the NYSE,
subject to official notice of issuance.
SECTION 7.6. TAX MATTERS AGREEMENT BRING DOWN CERTIFICATE
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 Tax Matters Agreement as of the Closing Date.
SECTION 7.7. NO MATERIAL ADVERSE CHANGE
Except as disclosed in the Filed CBS SEC Documents or as otherwise
expressly contemplated by the Transaction Agreements, since the date of the
most recent financial statements included in the Filed CBS SEC Documents,
there shall not have been any event, change or development which individually
or in the aggregate has had or would reasonably be expected to have a Material
Adverse Effect on CBS and its subsidiaries taken as a whole.
<PAGE>
41
SECTION 7.8. TAX OPINION
There shall have been, after the date hereof, no changes in law
(including the Code, the Treasury Regulations, revenue rulings or other
official written administrative interpretations, or judicial interpretations)
that would prevent Skadden, Arps, Slate, Meagher & Flom, LLP, special tax
counsel to Gaylord, from rendering an opinion substantially to the effect that
each of the Mergers should constitute a "reorganization" within the meaning of
Section 368(a) of the Code. In rendering such opinion, such counsel may rely
upon the representations, covenants and warranties of the parties hereto,
reasonably satisfactory to such counsel, contained in the Tax Matters
Agreement.
SECTION 7.9. BREACH OF COVENANT BY CBS
Subject to Section 10.16. CBS shall not have materially breached its
obligations in any covenant or agreement hereunder.
SECTION 8. INDEMNIFICATION
SECTION 8.1. INDEMNIFICATION BY GAYLORD
(a) Subject to Section 8.1(b), Gaylord shall indemnify, defend and
hold harmless CBS, its Affiliates (including, after the Effective Time,
GTC, GCI and the Limited Partnership) and each of their respective
officers, directors, employees, stockholders, agents and representatives
and each of the heirs, executors, successors and assigns of any of the
foregoing (the "CBS Indemnitees") from and against, and pay or reimburse
the CBS Indemnitees for, all losses, liabilities, damages, deficiencies,
obligations, fines, expenses, claims, demands, actions, suits,
proceedings, judgments or settlements, whether or not resulting from
Third Party Claims, including interest and penalties recovered by a third
party with respect thereto and out-of-pocket expenses and reasonable
attorneys' and accountants' fees and expenses incurred in the
investigation or defense of any of the same or in asserting, preserving
or enforcing any rights hereunder (collectively, "Losses"), suffered or
incurred by the CBS Indemnitees (other than any Losses relating to Taxes,
for which indemnification provisions are set forth in the Tax Matters
Agreement), relating to or arising from:
(i) the breach by Gaylord of any agreement or covenant
contained in this Agreement;
(ii) any breach or inaccuracy of any representation or warranty
of Gaylord contained in this Agreement; or
(iii) the ownership of GCI, GTC or the Limited Partnership or
the operation of the Station prior to the Effective Time or the
liabilities and obligations assumed by Gaylord pursuant to Section
4.3(b); or
(iv) any business or activity of GCI, GTC or the Limited
Partnership other than the ownership by GCI or GTC of its
partnership interest in the Limited Partnership or the ownership or
operation by the Limited Partnership of the Station and the assets
relating thereto.
(b) Gaylord shall not have any liability under Section 8.1(a)(ii)
unless the aggregate of all Losses for which Gaylord would, but for this
Section 8.1(b), be liable under Section 8.1(a)(ii) exceed on a cumulative
pre-tax basis an amount equal to $1,000,000, and then only to the extent
of any such excess; provided further, that Gaylord shall not have any
liability under Section 8.1(a) for any amount in excess of $485,000,000
in the aggregate; provided, however,
<PAGE>
42
that the foregoing threshold shall not apply to any such Losses relating
to or arising from any breach or inaccuracy of the representations and
warranties contained in Section 2.1, 2.2(a), 2.2(b), and 2.3; and
provided further that neither the foregoing threshold nor the foregoing
cap shall apply to any such Losses to the extent relating to or arising
from the liabilities and obligations assumed by Gaylord pursuant to
Section 4.3(b) or any business or activity of GCI, GTC or the Limited
Partnership other than the ownership by GCI or GTC of its partnership
interest in the Limited Partnership or the ownership or operation by the
Limited Partnership of the Station and the assets relating thereto.
(c) The parties hereto agree that the mere failure to list on a
Schedule a contract required to be listed on the Schedules attached
hereto shall not in and of itself constitute a Loss. The parties hereto
further agree that the foregoing shall in no way limit or impair any
right of any CBS Indemnitee to indemnification under Section 8.1(a) or to
recover any Losses arising out of or otherwise related to any such
contract or the terms thereof, when considered individually or together
with the terms of any other contract, including with respect to any
revenues that may be lower than otherwise reasonably anticipated by CBS,
any expenses that may be higher than otherwise reasonably anticipated by
CBS or any other Losses whatsoever resulting from such contract or its
terms. The parties hereto further agree that this paragraph is not in any
way intended to impose any different or more stringent burden of proof on
any CBS Indemnitee in asserting or enforcing any right than that which
may have existed in the absence of the foregoing.
SECTION 8.2. INDEMNIFICATION BY CBS
CBS shall indemnify, defend and hold harmless Gaylord, its Affiliates
(excluding, after the Effective Time, GCI, GTC and the Limited Partnership)
and each of their respective officers, directors, employees, stockholders,
agents and representatives and each of the heirs, executors, successors and
assigns of any of the foregoing (the "Gaylord Indemnitees" and, together with
the CBS Indemnitees, the "Indemnitees") from and against, and pay or reimburse
the Gaylord Indemnitees for, all Losses (other than any Losses relating to
Taxes, for which indemnification provisions are set forth in the Tax Matters
Agreement), suffered or incurred by the Gaylord Indemnitees, relating to or
arising from :
(i) the breach by CBS, CBS Dallas Ventures or CBS Dallas Media
of any agreement or covenant contained in this Agreement;
(ii) any breach or inaccuracy of any representation or warranty
of CBS contained in this Agreement; or
(iii) except to the extent of Gaylord's indemnification
obligation under Section 8.1, the ownership of GCI, GTC or the
Limited Partnership or the operation of the Station from and after
the Effective Time.
SECTION 8.3. TERMINATION OF INDEMNIFICATION
The obligations to indemnify and hold harmless any party (i) pursuant to
Section 8.1(a)(ii) and 8.2(ii) shall terminate when the applicable
representation or warranty terminates pursuant to Section 10.1 and (ii)
pursuant to Section 8.1(a)(i) and (iii) and Section 8.2(i) and (iii) shall not
terminate; provided, however, that such obligations to indemnify and hold
harmless shall not terminate with respect to any item as to which an
Indemnitee shall have, before the expiration of the applicable period,
previously made a claim by delivering a notice of such claim pursuant to
Section 8.4 to the indemnifying party.
<PAGE>
43
SECTION 8.4. PROCEDURES
(a) In order for an Indemnitee to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or
involving a claim made by any person who is not an Indemnitee against the
Indemnitee (a "Third Party Claim"), such Indemnitee must notify the party
who may become obligated to provide indemnification hereunder (the
"indemnifying party") in writing, and in reasonable detail, of the Third
Party Claim reasonably promptly, and in any event within 20 business days
after receipt by such Indemnitee of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall
not affect the indemnification provided hereunder except to the extent
the indemnifying party shall have been actually prejudiced as a result of
such failure. After any required notification, the Indemnitee shall
deliver to the indemnifying party, promptly after the Indemnitee's
receipt thereof, copies of all notices and documents (including court
papers) received by the Indemnitee relating to the Third Party Claim.
(b) If a Third Party Claim is made against an Indemnitee, the
indemnifying party will be entitled to participate in the defense thereof
and, if it so chooses, to assume the defense thereof (at the expense of
the indemnifying party) with counsel selected by the indemnifying party
and reasonably satisfactory to the Indemnitee. Should the indemnifying
party so elect to assume the defense of a Third Party Claim, the
indemnifying party will not be liable to the Indemnitee for any legal
expenses subsequently incurred by the Indemnitee in connection with the
defense thereof. If the indemnifying party assumes such defense, the
Indemnitee shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed
by the indemnifying party, it being understood that the indemnifying
party shall control such defense. The indemnifying party shall be liable
for the fees and expenses of counsel employed by the Indemnitee for any
period during which the indemnifying party has not assumed the defense
thereof (other than during any period in which the Indemnitee shall have
failed to give notice of the Third Party Claim as provided above).
Notwithstanding the foregoing, the indemnifying party shall not be
entitled to assume the defense of any Third Party Claim (and shall be
liable for the fees and expenses of counsel incurred by the Indemnitee in
defending such Third Party Claim) if the Third Party Claim seeks an
order, injunction or other equitable relief or relief for other than
money damages against the Indemnitee which the Indemnitee reasonably
determines, after conferring with its outside counsel, cannot be
separated from any related claim for money damages. If such equitable
relief or other relief portion of the Third Party Claim can be so
separated from that for money damages, the indemnifying party shall be
entitled to assume the defense of the portion relating to money damages.
The indemnification required by Section 8.1 or 8.2, as the case may be,
shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
the Losses are incurred. If the indemnifying party chooses to defend or
prosecute a Third Party Claim, all the parties hereto shall cooperate in
the defense or prosecution thereof, which cooperation shall include the
retention and (upon the indemnifying party's request) the provision to
the indemnifying party of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder. If the indemnifying party
chooses to defend or prosecute any Third Party Claim, the Indemnitee will
agree to any settlement, compromise or discharge of such Third Party
Claim which the indemnifying party may recommend and which by its terms
obligates the indemnifying party to pay the full amount of liability in
connection with such Third Party Claim; provided, however, that, without
the Indemnitee's consent, the indemnifying party shall not consent to
entry of any judgment or enter into any settlement (x) that provides for
injunctive or other nonmonetary relief affecting the Indemnitee or (y)
that does not include as an unconditional term thereof the giving by each
claimant or plaintiff to such Indemnitee of a release from all liability
with respect to such claim. If the indemnifying party shall have assumed
the defense of a Third Party Claim, the Indemnitee
<PAGE>
44
shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the indemnifying party's prior
written consent (which consent shall not be unreasonably withheld).
(c) In order for an Indemnitee to be entitled to any indemnification
provided for under this Agreement in respect of a claim that does not
involve a Third Party Claim, the Indemnitee shall deliver notice of such
claim (in reasonably sufficient detail to enable the indemnifying party
to evaluate such claim) with reasonable promptness to the indemnifying
party. The failure by any Indemnitee so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may
have to such Indemnitee under this Agreement, except to the extent that
the indemnifying party shall have been actually prejudiced by such
failure. If the indemnifying party does not notify the Indemnitee within
20 calendar days following its receipt of such notice that the
indemnifying party disputes its liability with respect to such claim
under Section 8.1 or 8.2, as the case may be, the claim shall be
conclusively deemed a liability of the indemnifying party under Section
8.1 or 8.2, as the case may be, and the indemnifying party shall pay the
amount of such liability to the Indemnitee on demand or, in the case of
any notice in which the amount of the claim (or any portion thereof) is
estimated, on such later date when the amount of such claim (or such
portion thereof) becomes finally determined. If the indemnifying party
has timely disputed its liability with respect to such claim, as provided
above, the indemnifying party and the Indemnitee shall proceed in good
faith to negotiate a resolution of such dispute and, if not resolved
through negotiations, such dispute shall be resolved by litigation in an
appropriate court of competent jurisdiction.
(d) Notwithstanding any of the foregoing, Gaylord shall be
responsible for defending any Third Party Claim pending at the Effective
Time.
Section 8.5. CERTAIN LIMITATIONS
(a) The amount of any Losses for which indemnification is provided
under this Agreement shall be net of any amounts actually recovered by
the Indemnitee from third parties (including, without limitation, amounts
actually recovered under insurance policies) with respect to such Losses.
(b) All indemnification payments under this Agreement shall be
determined on a pre-tax basis, i.e., without regard to the tax
consequences to the Indemnitee of making a payment that is indemnified by
another party under this Agreement or of receiving a payment under this
Agreement as indemnification therefor.
SECTION 9. TERMINATION
SECTION 9.1. TERMINATION
Notwithstanding anything contained in this Agreement to the contrary,
this Agreement may be terminated at any time prior to the Closing:
(a) by the mutual consent of Gaylord and CBS;
(b) by Gaylord at any time, if the Closing has not occurred on or
before the first anniversary of the execution of this Agreement;
(c) by CBS at any time, if the Closing has not occurred on or before
the date one (1) year and two (2) months following the execution of this
Agreement; provided, however, that if
<PAGE>
45
the granting of the FCC Consent is materially delayed because of any act
or omission on the part of CBS, this time shall be extended by an
additional ten (10) months;
(d) by Gaylord or CBS if the FCC designates the FCC transfer
applications for an evidentiary hearing;
(e) by Gaylord if the condition set forth in Section 7.8 cannot be
satisfied; or
(f) as provided in Section 10.15.
SECTION 9.2. SPECIFIC PERFORMANCE
The parties recognize that if any party breaches this Agreement and
refuses to perform under the provisions of this Agreement, monetary damages
would not be adequate to compensate the other party for its injury. Each of
CBS and Gaylord shall therefore be entitled, in addition to any other legal
and equitable remedies that may be available, including money damages, to
obtain specific performance of the terms of this Agreement. If any action is
brought by either CBS or Gaylord to enforce this Agreement, the other parties
shall waive the defense that there is an adequate remedy at law.
SECTION 9.3. EFFECT OF TERMINATION
The termination of this Agreement shall not affect the following sections
of this Agreement, which shall remain in full force and effect following any
termination: Sections 9.3, 10.2 and 10.10. In the event of any termination of
this Agreement, and (subject to Section 10.16) Gaylord is not in material
breach of its obligations under any covenant or agreement hereunder, CBS
agrees that, at the option of Gaylord, it shall extend the Station's status as
a CBS affiliate for a term of one (1) additional year past its then current
expiration date, on the same terms and conditions then in effect (other than
changes applicable to all affiliates generally and to the extent such changes
would be binding on the Station under its current affiliate agreement), and
CBS shall not unreasonably withhold its consent to any assignment of the
Station to a transferee or assignee approved by the FCC. Any termination of
this Agreement shall not relieve or release a party from responsibility
hereunder for any breaches of or defaults under this Agreement nor shall it
impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement.
SECTION 10. GENERAL PROVISIONS
SECTION 10.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
OBLIGATIONS
All representations, warranties, covenants and obligations contained in
this Agreement shall survive the Effective Time; provided, however, that the
representations and warranties contained in Sections 2 and 3 of this Agreement
shall terminate eighteen (18) months after the Closing Date, except that (i)
the representations and warranties in Section 2.20 shall terminate as of the
second anniversary of the Closing Date and (ii) the representations and
warranties relating to Taxes shall terminate at the time the applicable
statute of limitations with respect to the Taxes in question expire (giving
effect to any extension thereof). This Section 10.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
<PAGE>
46
SECTION 10.2. CONFIDENTIAL NATURE OF INFORMATION
The Confidentiality Agreement between Gaylord and CBS dated as of January
21, 1999, shall remain in full force and effect to the extent not superseded
by this Agreement; provided, however, that if the Closing takes place, the
Confidentiality Agreement shall no longer apply to the extent it requires CBS
or any of its Affiliates to treat in confidence any documents, materials or
other information relating to GCI, GTC, the Limited Partnership or the
Station. Each party further hereby agrees that it will treat in confidence all
documents, materials and other information which it shall have obtained
regarding the other party during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before
or after the date of this Agreement), the investigation provided for herein
and the preparation of this Agreement and other related documents, and, in the
event the transactions contemplated hereby shall not be consummated, each
party will return to the other party all copies of nonpublic documents and
materials which have been furnished in connection therewith. Gaylord further
agrees that, after the Closing Date, it will treat in confidence all
documents, materials and other information relating to the business, assets,
liabilities and operations of the Station which were confidential prior to the
Closing. The obligation of each party to treat such documents, materials and
other information in confidence shall not apply to any information which (a)
such party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is known to the public and did not
become so known through any violation of a legal obligation, (c) became known
to the public through no fault of such party, (d) is later lawfully acquired
by such party from other sources, (e) such party is permitted to disclose
under this Agreement or (f) such party is required to disclose, pursuant to
judicial order or, in the opinion of counsel, pursuant to applicable law.
Without limiting the right of any party to pursue all other legal and
equitable rights available to it for violation of this Section 10.2 by any
other party, it is agreed that other remedies cannot fully compensate the
aggrieved party for such a violation of this Section 10.2 and that the
aggrieved party shall be entitled to injunctive relief to prevent a violation
or continuing violation thereof.
SECTION 10.3. GOVERNING LAW
This Agreement and the transactions contemplated hereby 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 10.4. NOTICES
All notices or other communications required or permitted hereunder shall
be in writing and shall be deemed given or delivered when delivered personally
or by messenger or seventy-two (72) hours after having been sent by registered
or certified mail or when delivered by private courier addressed as follows:
If to CBS, to:
CBS Corporation
51 West 52nd Street
New York, NY 10019
Attention: Louis J. Briskman, Esq.
with a copy to:
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47
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Peter S. Wilson, Esq.
If to Gaylord, to:
Gaylord Entertainment Company
One Gaylord Drive
Nashville, Tennessee 37214
Attention: Joseph B. Crace
with a copy to:
Sherrard & Roe, PLC
424 Church Street, Suite 2000
Nashville, TN 37219
Attention: Thomas J. Sherrard, Esq.
with a copy to:
Reed Smith Shaw & McClay
1301 K Street, N.W.
East Tower - Suite I 100
Washington, D.C. 20005
Attention: Brian A. Johnson, Esq.
or to such other address as such party may indicate by a notice delivered to
the other parties hereto.
SECTION 10.5. SUCCESSOR AND ASSIGNS
(a) The rights of a party under this Agreement shall not be
assignable by such party without the prior written consent of CBS and
Gaylord, except that upon written notice to the other party all or any
portion of the rights of CBS or Gaylord hereunder (but not its
obligations) may be assigned, without the consent of the other party,
only to a direct wholly owned corporate subsidiary of CBS or Gaylord.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include, without
limitation, any permitted assignee as well as the successors in interest
to such permitted assignee (whether by merger, liquidation (including
successive mergers or liquidations) or otherwise). Except as expressly
provided in Article 8, nothing in this Agreement, expressed or implied,
is intended or shall be construed to confer upon any person other than
the parties and successors and assigns permitted by this Section 10.5 any
right, remedy or claim under or by reason of this Agreement.
SECTION 10.6. ACCESS TO RECORDS AFTER CLOSING
For a period of six (6) years after the Closing Date, Gaylord and its
representatives shall have reasonable access to all of the books and records
of the Station transferred to CBS and the CBS Subsidiaries hereunder to the
extent that such access may reasonably be required by Gaylord in
<PAGE>
48
connection with matters relating to or affected by the operations of the
Station prior to the Closing Date. Such access shall be afforded by CBS upon
receipt of reasonable advance notice and during normal business hours. Gaylord
shall be solely responsible for any costs or expenses incurred by it pursuant
to this Section 10.6. If CBS shall desire to dispose of any of such books and
records prior to the expiration of such six-year period, CBS shall, prior to
such disposition, give Gaylord a reasonable opportunity, at Gaylord's expense,
to segregate and remove such books and records as Gaylord may select.
For a period of six (6) years after the Closing Date, CBS and its
representatives shall have reasonable access to all of the books and records
relating to the Station which Gaylord or any of its Affiliates may retain
after the Closing Date. Such access shall be afforded by Gaylord and its
Affiliates upon receipt of reasonable advance notice and during normal
business hours. CBS shall be solely responsible for any costs and expenses
incurred by it pursuant to this Section 10.6. If Gaylord or any of its
Affiliates shall desire to dispose of any of such books and records prior to
the expiration of such six-year period, Gaylord shall, prior to such
disposition, give CBS a reasonable opportunity, at CBS's expense, to segregate
and remove such books and records as CBS may select.
SECTION 10.7. ENTIRE AGREEMENT; AMENDMENTS
This Agreement and the Exhibits and Schedules referred to herein, the
other Transaction Agreements and the documents delivered pursuant hereto and
thereto contain the entire understanding of the parties hereto with regard to
the subject matter contained herein or therein, and supersede all prior
agreements, understandings or intents between or among any of the parties
hereto and related thereto (provided that nothing in this Agreement shall be
deemed to supersede the provisions of the Merger Agreement dated as of
February 9, 1997 among Westinghouse Electric Corporation, G Acquisition Corp.
and Gaylord Entertainment Company and all other agreements related thereto,
including the Post-Closing Covenants Agreement dated as of September 30, 1997,
among Gaylord Entertainment Company, New Gaylord Entertainment Company and the
subsidiaries of New Gaylord Entertainment Company party thereto from time to
time). The parties hereto, by mutual agreement in writing, may amend, modify
or supplement this Agreement.
SECTION 10.8. INTERPRETATION
Article titles and headings to sections herein are inserted for
convenience of reference only and are not intended to be a part of or to
effect the meaning or interpretation of this Agreement. The Schedules referred
to herein shall be construed with and as an integral part of this Agreement to
the same extent as if they were set forth verbatim herein, and disclosure of
any information on any Schedule shall be deemed disclosure on all Schedules
where such information is manifestly applicable excluding Schedule 2.5.
SECTION 10.9. WAIVERS
Any term or provision of this Agreement may be waived, or the time for
its performance may be extended, in a writing signed by the party or parties
entitled to the benefit thereof. The failure of any party hereto to enforce at
any time any provision of this Agreement shall not be construed to be a waiver
of such provision, nor in any way to affect the validity of this Agreement or
any part hereof or the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach.
<PAGE>
49
SECTION 10.10. EXPENSES
Whether or not the Closing takes place, and except as otherwise provided
herein and subject to the following sentence, each party hereto will pay all
of its own costs and expenses incident to its negotiation and preparation of
this Agreement and to its performance and compliance with all agreements and
conditions contained herein on its part to be performed or complied with,
including the fees, expenses and disbursements of its counsel and accountants.
Gaylord will pay all such costs and expenses on behalf of GTC, GCI and the
Limited Partnership.
SECTION 10.11. PARTIAL INVALIDITY
Wherever possible, each provision hereof shall be interpreted in such
manner as to be effective and valid under applicable law, but in case any one
or more of the provisions contained herein shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal
or unenforceable provision or provisions had never been contained herein
unless the deletion of such provision or provisions would result in such a
material change as to cause completion of the transactions contemplated hereby
to be unreasonable.
SECTION 10.12. EXECUTION IN COUNTERPARTS
This Agreement 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.
SECTION 10.13. DEFINITIONS
As used in this Agreement, the following terms have the meanings
specified or referred to in this Section 10.13:
"Accounting Firm" has the meaning specified in Section 1.13 of this
Agreement.
"Accounts Receivable" means the accounts held by the Limited Partnership
and to which Gaylord is entitled as of the Effective Time for advertising and
programming aired on the Station and for production and other services
provided by the Limited Partnership prior to the Effective Time , including
rights and claims to payments made by the Copyright Royalty Tribunal.
"Affiliate" means, with respect to any person, any other person which
directly or indirectly controls, is controlled by or is under common control
with such person[, excluding, with respect to Gaylord, The Oklahoma Publishing
Company].
"Balance Sheets" has the meaning specified in Section 2.4 of this
Agreement.
"Benefit Plans" has the meaning specified in Section 2.13 of this
Agreement.
"Cable Act Requirements" has the meaning specified in Section 2.26 of
this Agreement.
"CBS" has the meaning specified in the first paragraph of this Agreement.
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50
"CBS Common Stock" has the meaning specified in the Recitals to this
Agreement.
"CBS Dallas Media" has the meaning specified in the first paragraph of
this Agreement.
"CBS Dallas Ventures" has the meaning specified in the first paragraph of
this Agreement.
"CBS Indemnitees" has the meaning specified in Section 8.1 of this
Agreement.
"CBS Material Adverse Effect" has the meaning specified in Section 3.3 of
this Agreement.
"CBS SEC Documents" has the meaning specified in Section 3.4 of this
Agreement.
"CBS Subsidiaries" has the meaning specified in the first paragraph of
this Agreement.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership of New Gaylord Broadcasting Company, L.P., filed in the office of
the Secretary of State of Texas on September 1, 1995, as amended on November
28, 1995 and December 4, 1995 to change its name to Gaylord Broadcasting
Company, L.P.
"Closing" has the meaning specified in Section 1.2 of this Agreement.
"Closing Date" has the meaning specified in Section 1.2 of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Period" has the meaning specified in Section 4.4 of this
Agreement.
"Communications Act" means the Communications Act of 1934, as amended,
and the rules and regulations and written policies and procedures promulgated
thereunder.
"Constituent Corporations" has the meaning specified in the first
paragraph of this Agreement.
"Contaminant" means any waste, pollutant, hazardous substance, toxic or
radioactive substance, hazardous waste, special waste, petroleum or
petroleum-derived substance or waste, or any constituent of any such substance
or waste.
"DTV" has the meaning specified in Section 2.27 of this Agreement.
"DTV Facility" has the meaning specified in Section 2.27 of this
Agreement.
"DOJ" has the meaning specified in Section 4.2 of this Agreement.
"Effective Time" has the meaning specified in Section 1.3 of this
Agreement.
"Encumbrance" means any lien, claim, charge, security interest, mortgage,
pledge, easement, conditional sale or other title retention agreement, defect
in title, covenant or other restrictions of any kind.
"Event of Loss" has the meaning specified in Section 10.15 of this
Agreement.
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51
"Exchange Act" has the meaning specified in Section 2.2 of this
Agreement.
"FAA" means the Federal Aviation Administration.
"FCC" has the meaning specified in Section 2.2 of this Agreement.
"FCC Authorizations" means those Permits issued by the FCC for the
operation of the Station.
"FCC Consent" means action by the FCC granting its consent to the
transfer of control to CBS (or an Affiliate of CBS) of the FCC Authorizations
as contemplated by this Agreement pursuant to appropriate applications filed
by the parties with the FCC.
"Filed CBS SEC Documents" has the meaning specified in Section 3.7 of
this Agreement.
"Final Determination" has the meaning specified in Section 1.4 of the Tax
Matters Agreement.
"Final Order" means a written action or order issued by the FCC, setting
forth the FCC Consent, (a) which has not been reversed, stayed, enjoined, set
aside, annulled or suspended, and (b) with respect to which (i) no requests
have been filed for administrative or judicial review, reconsideration, appeal
or stay and the time for filing any such requests for administrative or
judicial review, reconsideration or appeal, and the time for the FCC to set
aside the action on its own motion, have expired, or (ii) in the event of
review, reconsideration or appeal, the FCC's order has been affirmed and
become final by expiration of the time for further review, reconsideration or
appeal.
"Financial Statements" has the meaning specified in Section 2.4 of this
Agreement.
"Financial Statement Date" has the meaning specified in Section 2.4 of
this Agreement.
"FTC" has the meaning specified in Section 4.2 of this Agreement.
"GAAP" means generally accepted accounting principles.
"Gaylord" has the meaning specified in the first paragraph of this
Agreement.
"Gaylord's 401(k) Plan" has the meaning specified in Section 5.2 of this
Agreement.
"Gaylord Indemnitees" has the meaning specified in Section 8.2 of this
Agreement.
"Gaylord Material Adverse Effect" has the meaning specified in Section
2.1 of this Agreement.
"Gaylord's Pension Plan" has the meaning specified in Section 5.2 of this
Agreement.
"Gaylord Subsidiaries" has the meaning specified in the first paragraph
of this Agreement.
"Gaylord Subsidiary Stock" has the meaning specified in the Recitals to
this Agreement.
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52
"Gaylord's Trademarks and Logos" has the meaning specified in Section 5.7
of this Agreement.
"GCI" has the meaning specified in the first paragraph of this Agreement.
"GCI Articles of Merger" has the meaning specified in Section 1.3 of this
Agreement.
"GCI Certificate of Merger" has the meaning specified in Section 1.3 of
this Agreement.
"GCI Merger" has the meaning specified in the Recitals to this Agreement.
"GCI Stock" has the meaning specified in the Recitals to this Agreement.
"Governmental Entity" has the meaning specified in Section 2.2 of this
Agreement.
"GTC" has the meaning specified in the first paragraph of this Agreement.
"GTC Certificate of Merger" has the meaning specified in Section 1.3 of
this Agreement.
"GTC Merger" has the meaning specified in the Recitals to this Agreement.
"GTC Stock" has the meaning specified in the Recitals to this Agreement.
"Identified Agreements" has the meaning specified in Section 1.13(e) of
this Agreement.
"Improvements Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Including" means including, without limitation.
"Indemnitees" has the meaning specified in Section 8.2 of this Agreement.
"Lease" has the meaning specified in Section 2.8 of this Agreement.
"Leased Property" has the meaning specified in Section 2.8 of this
Agreement.
"Liabilities and Costs" means all liabilities, investigations,
responsibilities, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including, without limitation, attorney,
expert and consulting fees and expenses, costs of investigation and
feasibility studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.
"Limited Partnership" has the meaning specified in the Recitals to this
Agreement.
"Limited Partnership Agreement" means the Agreement of Limited
Partnership of New Gaylord Broadcasting Company, L. P. dated as of September
1, 1995, as amended on February 1, 1999 to change its name to Gaylord
Broadcasting Company, L.P.
"Losses" has the meaning specified in Section 8.1 of this Agreement.
<PAGE>
53
"Market Cable System" means any U.S. cable television system within the
Station's market, as defined in 47 C.F.R. ' 76.55(c) with two thousand (2000)
or more subscribers.
"Material Adverse Effect" means, when used in connection with an entity
or group of entities, any change, effect, event or occurrence that is
materially adverse to the business, properties, assets, financial condition,
results of operations or prospects of such entity or group, taken as a whole,
other than any change, effect, event or occurrence relating to the United
States or the Dallas/Fort Worth economies in general, to United States stock
market conditions in general, or to the entity's or group's industry or
industries in general and not to the entity or group specifically.
"Mergers" has the meaning specified in the Recitals to this Agreement.
"Notice of Disagreement" has the meaning specified in Section 1.13 of
this Agreement.
"NYSE" means The New York Stock Exchange.
"Organizational Documents" has the meaning specified in Section 2.1 of
this Agreement.
"Owned Property" has the meaning specified in Section 2.8 of this
Agreement.
"Permits" has the meaning specified in Section 2.2 of this Agreement.
"Permitted Encumbrances" has the meaning specified in Section 2.9 of this
Agreement.
"Phase I Report" has the meaning specified in Section 5.8 of this
Agreement.
"Phase II Report" has the meaning specified in Section 5.8 of this
Agreement.
"Records" has the meaning specified in Section 5.11 of this Agreement.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any structure, including
the movement of Contaminants through or in the air, soil, surface water,
groundwater or structure.
"Relevant Taxes" has the meaning ascribed in Section 2.6 of this
Agreement.
"Remedial Action" means actions required to (a) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(b) prevent the Release or threat of Release or minimize the further Release
of Contaminants so they do not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment; or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care.
"Requirements of Law" means any foreign, federal, state or local law,
rule or regulation, common law, order, consent, agreement, judgment, decree,
governmental Permit or other binding determination of any Governmental Entity.
"Securities Act" has the meaning specified in Section 2.2 of this
Agreement.
"Settlement Statement" has the meaning specified in Section 1.13 of this
Agreement.
<PAGE>
54
"Spots" has the meaning specified in Section 1.10 of this Agreement.
"Station" has the meaning specified in the Recitals to this Agreement.
"Station Employees" has the meaning specified in Section 2.11 of this
Agreement.
"Tax Authority" has the meaning specified in Section 1.17 of the Tax
Matters Agreement.
"Taxes" has the meaning specified in Section 2.6 of this Agreement.
"Tax Matters Agreement" means the Tax Matters Agreement dated the date
hereof by and between Gaylord, GTC, GCI and CBS, a copy of which is attached
hereto as Exhibit A.
"Tax Returns" has the meaning specified in Section 2.6 of this Agreement.
"Third Party Claim" has the meaning specified in Section 8.4 of this
Agreement.
"To the best of CBS's knowledge" or any similar formulation means to the
actual knowledge, after due inquiry into the areas of their respective
responsibility, including without limitation review of their internal files
and records, of Mel Karmazin, Frederick G. Reynolds and Louis J. Briskman (it
being understood that no attorney-client privilege or work product privilege
shall be waived or compromised by this provision).
"To the best of Gaylord's knowledge" or any similar formulation means to
the actual knowledge, after due inquiry into the areas of their respective
responsibility, including review of their internal files and records, of
Joseph B. Crace, Carl Kornmeyer, Mark Floyd, and Brian Jones.
"Transaction Agreements" has the meaning specified in Section 2.2 of this
Agreement.
"Treasury Regulations" has the meaning specified in Section 2.6 of this
Agreement.
"Waiver" means a permanent waiver or a temporary waiver of at least six
(6) months' duration, including a temporary waiver conditioned on the outcome
of the FCC's pending rule-making proceeding with respect to its television
ownership rules (MM Docket Nos. 91-221 and 87- 8), of the "one-to-a-market
rule," 47 C.F.R. ss.73 3555(c), to permit the common ownership and control by
CBS of the Station and the radio stations in the Dallas/Fort Worth area
currently under CBS's ownership and control.
SECTION 10.14. CONTROLLING PROVISIONS
Notwithstanding anything herein to the contrary, nothing in this
Agreement shall be construed as limiting the provisions contained in the Tax
Matters Agreement, and in the case of doubt or conflict, the terms of the Tax
Matters Agreement shall control.
SECTION 10.15. RISK OF LOSS
The risk of loss, damage or destruction to any of the assets of the
Limited Partnership to be transferred to CBS pursuant to this Agreement shall
remain with Gaylord until the Closing. If any of the assets material to the
operation of the Station is lost, damaged or destroyed prior to the Closing
Date (an "Event of Loss"), Gaylord shall promptly notify CBS of all
particulars thereof,
<PAGE>
55
including the cause (if known) and the extent to which the cost of
restoration, replacement and/or repair of the lost, damaged or destroyed
assets will be reimbursed under any insurance policy. Gaylord, at its expense,
shall use its reasonable best efforts to restore, repair or replace the assets
with comparable property of like value or quality as soon as practicable after
the Event of Loss and, if applicable, to restore all transmissions that were
interrupted due to the Event of Loss.
If an Event of Loss results in failure to satisfy the condition to CBS'
obligations to close under Section 6.4, then CBS may, at its option:
(a) terminate this Agreement; or
(b) postpone the Closing Date until such time as the assets have
been restored, repaired or replaced in a manner and to an extent
reasonably satisfactory to CBS, unless the same cannot be reasonably
effected within one hundred twenty (120) days of the date CBS received
notice from Gaylord of the Event of Loss, in which case either Gaylord or
CBS may terminate this Agreement; or
(c) choose to accept the assets "as is", in which event Gaylord
shall assign or cause to be assigned to CBS all rights under any
insurance claims covering the loss, damage or destruction of the assets
and pay over or cause to be paid over to CBS any proceeds under any such
insurance policies received by Gaylord or any of its subsidiaries prior
to or after the Closing Date with respect thereto.
In the event the Closing Date is postponed pursuant to this Section
10.15, CBS and Gaylord will cooperate to extend the time during which this
Agreement must be closed as specified in the consent of the FCC.
SECTION 10.16. RESOLUTION OF DISPUTES OVER SATISFACTION OF
CONDITIONS
In the event (a) CBS or Gaylord, as applicable, determines that the
condition set forth in Section 6.4, 6.6 or 7.9 has not been satisfied at the
Closing Date (and CBS or Gaylord, as applicable, is not prepared to waive such
condition), or (b) CBS shall determine pursuant to Section 9.3 that Gaylord is
in material breach of its obligations and is unwilling to extend the Station's
status as an affiliate for an additional one year term, then the party making
such determination shall deliver to the other party a notice setting forth in
reasonable detail the facts and circumstances upon which the determination was
made. In the event the other party does not agree with such determination, the
Closing shall be delayed or final determination of non-renewal of affiliate
status shall be delayed, as the case may be, and such party shall be entitled
to a ten (10) day period from receipt of the notice within which to cause the
condition to be satisfied or the breach to be cured. If the dispute is not
resolved within the ten (10) day period, CBS and Gaylord shall submit the
dispute to a mutually agreed-upon law professor with at least ten (10) years'
experience in the law of corporate transactions and television broadcasting;
provided, that if the parties cannot agree upon a law professor, the party
making the determination of non-satisfaction of a condition or of material
breach, as applicable, shall select either Jams/Endisputes or CPR Institute
for Dispute Resolution, and the other party may accept the selection or elect
the other entity and the choice of that party shall be binding. The choice of
person or entity to resolve the dispute shall be made within five (5) working
days after the expiration of the ten (10) day grace period, and such person or
entity shall be referred to as the "Arbitrator." Within five (5) days of the
selection of the Arbitrator, CBS and Gaylord shall submit their respective
positions to the Arbitrator, in writing, together with any other material
relied upon in support of their respective positions. The party claiming that
a condition has not been satisfied or alleging a material breach shall have
the burden of persuasion. CBS and
<PAGE>
56
Gaylord shall use their reasonable efforts to cause the Arbitrator to render a
decision within ten (10) days following the submission of such materials to
the Arbitrator and in no event later than forty-five (45) days from the date
on which the determination was made by a party that a condition had not been
satisfied or that a material breach had occurred, as applicable. The
Arbitrator's decision shall be final and binding upon the parties. The cost of
any arbitration pursuant to this Section 10.16 shall be borne one-half by CBS
and one-half by Gaylord; provided that CBS and Gaylord shall each pay the fees
and expenses of their respective attorneys.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
GAYLORD ENTERTAINMENT COMPANY
By: /s/ Frederic G. Reynolds
------------------------
Its: _______________________
GAYLORD TELEVISION COMPANY
By: /s/ Frederic G. Reynolds
------------------------
Its: _______________________
GAYLORD COMMUNICATIONS, INC
By: /s/ Frederic G. Reynolds
------------------------
Its: _______________________
CBS CORPORATION
By: /s/ Frederic G. Reynolds
------------------------
Its: _______________________
CBS DALLAS VENTURES, INC.
By: /s/ Frederic G. Reynolds
------------------------
Its: _______________________
<PAGE>
57
CBS DALLAS MEDIA, INC.
By: /s/ Joseph B. Crace
------------------------
Its: _______________________
The Limited Partnership joins in the execution of this Agreement and agrees to
be bound hereby.
GAYLORD BROADCASTING COMPANY, L.P.
By: Gaylord Television Company, its general partner
By: /s/ Joseph B. Crace
------------------------
Its: _______________________
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 Gaylord Entertainment Company, a Delaware
corporation ("Gaylord"), Gaylord Television Company, a Delaware corporation
("GTC"), Gaylord 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 Gaylord, 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
Gaylord 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 Gaylord of the shares of CBS Common Stock issuable to
Gaylord 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 Gaylord, CBS, GTC, GCI, CBS Dallas Ventures and CBS Dallas Media
have approved, and declared
<PAGE>
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
Gaylord one or more certificates registered in the name of Gaylord
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 Gaylord by wire
transfer in immediately available funds to an account designated in
writing by Gaylord the sum of Four Million Two Hundred Thousand
Dollars ($4,200,000). The "Market Price" means the average of
<PAGE>
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 Gaylord 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. Gaylord 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, Gaylord, 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 Gaylord 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
Gaylord understands and acknowledges that the acquisition by Gaylord 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
Gaylord understands and acknowledges that the certificates evidencing the
shares of CBS Preferred Stock to be acquired by Gaylord pursuant to the
Mergers, and the CBS Conversion Shares issuable upon conversion of the shares
of CBS Preferred Stock, will bear the following legend:
<PAGE>
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
Gaylord 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 Gaylord 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 Gaylord 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
<PAGE>
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 Gaylord, 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
<PAGE>
Viacom Merger Agreement) and (iii) CBS shall provide a copy of any further
amendment to the Viacom Merger Agreement to Gaylord 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, Gaylord
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, Gaylord shall vote all its shares of CBS
Preferred Stock in favor of the adoption of the Viacom Merger Agreement.
Gaylord 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, Gaylord shall vote all its shares of Viacom Preferred Stock
in favor of increasing the number of authorized shares of preferred stock of
Viacom. Gaylord 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 Gaylord 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. Gaylord
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) Gaylord, 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 Gaylord as Gaylord's 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 Gaylord 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. Gaylord hereby acknowledges that it
has reviewed a copy of the Viacom Merger Agreement, as in effect on the date
hereof.
<PAGE>
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 Gaylord 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. Gaylord shall pay any
selling expenses, including, if applicable, all underwriting discounts and
selling commissions, and, if Gaylord 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) Gaylord shall promptly upon request furnish to CBS or its
counsel such information concerning Gaylord 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 Gaylord, 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 Gaylord
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 Gaylord 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 Gaylord 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
<PAGE>
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 Gaylord 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 Gaylord 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 Gaylord 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) Gaylord shall not permit any third party involved in a financing
transaction with Gaylord (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 Gaylord, 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
<PAGE>
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) Gaylord 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 Gaylord 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
Gaylord 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 Gaylord, each of its officers and directors,
and each person controlling Gaylord, 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 Gaylord, its officers
and directors and each person controlling Gaylord, 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 Gaylord, any such broker-dealer or any person controlling
Gaylord 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
<PAGE>
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) Gaylord 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 Gaylord 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
Gaylord by CBS or any person controlling CBS and stated to be specifically for
use therein. It is agreed that the obligations of Gaylord 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 Gaylord (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.
<PAGE>
(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, Gaylord 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 Gaylord 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 Gaylord (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 Gaylord 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 Gaylord 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
<PAGE>
Tape (as reported by the Wall Street Journal or, if not reported thereby, by
another authoritative source mutually selected by Gaylord 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 Gaylord 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 Gaylord 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) Gaylord shall only be entitled to the payment from CBS under this Section
5.16 as to CBS Conversion Shares sold by Gaylord 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) Gaylord 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). Gaylord 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:
<PAGE>
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
51 West 52nd Street
New York, NY 10019
Attention: Louis J. Briskman, Esq.
Facsimile No.: 212 597-4031
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Peter S. Wilson, Esq.
Facsimile No.: 212-765-0978
<PAGE>
If to Gaylord, to:
Gaylord Entertainment Company
One Gaylord Drive
Nashville, Tennessee 37214
Attention: Joseph B. Crace
Facsimile No: 615-316-6570
with a copy to:
Sherrard & Roe, PLC
424 Church Street, Suite 2000
Nashville, TN 37219
Attention: Thomas J. Sherrard, Esq.
Facsimile No.: 615-742-4539
with a copy to:
Reed Smith Shaw & McClay
1301 K Street, N.W.
East Tower - Suite I 100
Washington, D.C. 20005
Attention: Brian A. Johnson, Esq.
Facsimile No.: 202-414-9299
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 Gaylord or the Gaylord Subsidiaries under
the Merger Agreement. Gaylord 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) Gaylord 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"). Gaylord 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
Gaylord in the amount of $10,000, as reflected on the estimated
balance sheet
<PAGE>
delivered pursuant to Section 1.13(d). Gaylord 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 Gaylord 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, Gaylord 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 Gaylord 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.
<PAGE>
IN WITNESS WHEREOF, Gaylord, 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.
GAYLORD ENTERTAINMENT COMPANY
By: /s/ Joseph B. Crace
---------------------------
Name: Joseph B. Crace
Title:
GAYLORD TELEVISION COMPANY
By: /s/ Joseph B. Crace
---------------------------
Name: Joseph B. Crace
Title:
GAYLORD COMMUNICATIONS, INC.
By: /s/ Joseph B. Crace
---------------------------
Name: Joseph B. Crace
Title:
CBS CORPORATION
By: /s/ Fredric G. Reynolds
---------------------------
Name: Fredric G. Reynolds
Title:
CBS DALLAS VENTURES, INC.
By: /s/ Fredric G. Reynolds
---------------------------
Name: Fredric G. Reynolds
Title:
CBS DALLAS MEDIA, INC.
By: /s/ Fredric G. Reynolds
---------------------------
Name: Fredric G. Reynolds
Title:
<PAGE>
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.
GAYLORD BROADCASTING COMPANY, L.P.
By: Gaylord Communications, Inc., its general partner
By:
/s/ Joseph B. Crace
------------------------
Its:
------------------------
<PAGE>
Amendment to Schedule 2.16
(omitted)
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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 (212) 597-4031 or 51 West 52nd Street, New York, NY
10019, 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
<PAGE>
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
<PAGE>
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 Gaylord Entertainment
Company, Gaylord Television Company, Gaylord 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
<PAGE>
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
<PAGE>
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 paragraph 7, none 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
<PAGE>
10
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.
<PAGE>
11
(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
<PAGE>
12
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
<PAGE>
13
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.
<PAGE>
14
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.
<PAGE>
15
(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
<PAGE>
16
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.
AMENDED AND RESTATED
TAX MATTERS AGREEMENT
THIS AMENDED AND RESTATED TAX MATTERS AGREEMENT is made as of the
8th day of October, 1999, by and among GAYLORD ENTERTAINMENT COMPANY, a
Delaware corporation ("Gaylord"), GAYLORD TELEVISION COMPANY, a Delaware
corporation and direct wholly owned subsidiary of GAYLORD ("GTC"), GAYLORD
COMMUNICATIONS, INC., a Texas corporation and a direct wholly owned subsidiary
of GAYLORD ("GCI"), and CBS CORPORATION, a Pennsylvania corporation ("CBS").
WHEREAS, Gaylord, GTC, GCI and CBS entered into the Tax Matters
Agreement dated April 9, 1999 (the "Original Tax Matters Agreement"), and such
parties desire to amend and restate the Original Tax Matters Agreement in its
entirety;
WHEREAS pursuant to the AGREEMENT AND PLAN OF MERGER dated as of
April 9, 1999, as amended as of October 8, 1999 (the "CBS Merger Agreement")
by and among Gaylord, GTC, GCI, CBS, CBS DALLAS VENTURES, INC. ("Newco 1"),
and CBS DALLAS MEDIA, INC. ("Newco 2"), both Delaware corporations and direct
wholly-owned subsidiaries of CBS, Newco 1 will be merged with and into GCI
(the "GCI Merger") and Newco 2 will be merged with and into GTC (the "GTC
Merger," and collectively, with the GCI Merger, the "Mergers"), with GCI and
GTC as the surviving corporations;
WHEREAS, GAYLORD BROADCASTING COMPANY, L.P., a Texas limited
partnership (the "Limited Partnership"), is engaged in the business of owning
and operating television broadcast station KTVT-TV, Fort Worth/Dallas, Texas;
WHEREAS, GCI is the sole general partner of the Limited Partnership,
and GTC is the sole limited partner of the Limited Partnership;
WHEREAS, pursuant to the Mergers, Gaylord will receive shares of CBS
Preferred Stock (as defined in the CBS Merger Agreement) in exchange for all
of the issued and outstanding shares of GCI common stock (the "GCI Stock") and
GTC common stock (the "GTC Stock");
WHEREAS, the parties intend that for federal income tax purposes
each of the Mergers qualifies as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, Gaylord is the common parent of an affiliated group of
corporations (the "Gaylord Group") within the meaning of Section 1504(a) of
the Code and the members of the Gaylord Group have heretofore joined in filing
consolidated federal income Tax Returns;
<PAGE>
WHEREAS, CBS is the common parent of an affiliated group of
corporations (the "CBS Group") within the meaning of Section 1504(a) of the
Code and the members of the CBS Group have heretofore joined in filing
consolidated federal income Tax Returns;
WHEREAS, CBS entered into a merger agreement dated as of September
6, 1999, as amended and restated as of October 8, 1999 (as it may be further
amended from time to time, the "Viacom Merger Agreement"), with VIACOM INC., a
Delaware corporation ("Viacom"), pursuant to which and subject to the terms
and conditions thereof, the holders of CBS Common Stock (as defined in the CBS
Merger Agreement) will receive shares of Viacom Class B Common Stock (as
defined in the Viacom Merger Agreement) in exchange for their CBS Common Stock
upon the effective time of the Merger (as defined in the Viacom Merger
Agreement, and referred to herein as the "Viacom Merger"), and the holders of
CBS Preferred Stock will receive shares of Viacom Series C Preferred Stock (as
defined in the Viacom Merger Agreement) in exchange for their CBS Preferred
Stock upon the effective time of the Viacom Merger (the "Viacom Effective
Time");
WHEREAS, Gaylord and CBS desire on behalf of themselves, their
Subsidiaries and their successors to set forth their rights and obligations
with respect to Taxes relating to taxable periods before and after the Closing
Date; and
WHEREAS, CBS and Gaylord desire to make certain representations,
warranties and covenants upon which Skadden, Arps, Slate, Meagher & Flom, LLP
("SASM&F") will rely in rendering its opinion (the "Tax Opinion") as to the
qualification of the Mergers as "reorganizations" within the meaning of
Section 368(a) of the Code;
NOW, THEREFORE, the parties hereto hereby amend and restate the
Original Tax Matters Agreement in its entirety and hereby agree as follows:
ARTICLE I
Definitions*
1.1 "Closing Date" shall mean the last day on which, due to the
Mergers, GCI and GTC could be considered members of the Gaylord Group for
federal income Tax purposes.
1.2 "Dispose" (and with correlative meaning, "Disposition") shall
mean pay, discharge, settle or otherwise dispose.
1.3 "Due Date" shall mean, with respect to any Tax Return or
- --------------
* Additional definitions are in the preceding portion of this Agreement.
Unless otherwise defined herein, all capitalized terms herein shall have the
meanings ascribed thereto in the CBS Merger Agreement.
<PAGE>
payment, the date on which such Tax Return is due to be filed with or such
payment is due to be made to the appropriate Tax Authority pursuant to
applicable law, giving effect to any applicable extensions of the time for
such filing or payment.
1.4 "Final Determination" shall mean (i) the entry of a decision of
a court of competent jurisdiction at such time as an appeal may no longer be
taken from such decision, (ii) the execution of a closing agreement or its
equivalent between the particular taxpayer and the relevant Tax Authority, or
(iii) any other final Disposition complying with the contest provisions of
Article VI hereof.
1.5 "Merger Subsidiaries" shall mean Newco 1 and Newco 2.
1.6 "Payee" shall have the meaning set forth in Section 5.6.
1.7 "Payor" shall have the meaning set forth in Section 5.6.
1.8 "Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
1.9 "Post-Closing Period" shall mean any taxable period beginning
after the Closing Date.
1.10 "Post-Closing Straddle Period" shall mean with respect to a
Straddle Period, that portion of such Straddle Period that begins on the day
immediately following the Closing Date.
1.11 "Pre-Closing Period" shall mean any taxable period that ends on
or prior to the Closing Date.
1.12 "Pre-Closing Straddle Period" shall mean with respect to a
Straddle Period, that portion of such Straddle Period ending on and including
the Closing Date.
1.13 "Related Person" shall mean a related person under Treasury
Regulation Section 1.368-1(e)(3).
1.14 "Section" shall refer to a section of this Agreement unless
otherwise indicated.
1.15 "Straddle Period" shall mean any taxable period that begins
before or on and ends after the Closing Date.
1.16 "Subsidiary" shall mean, with respect to any person, any
corporation or other organization, whether incorporated or unincorporated, of
which (i) such person or any other subsidiary of such person is a general
partner or (ii) at least 50% of the securities or other interests having by
their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization or at least 50% of the value of the
<PAGE>
outstanding equity is directly or indirectly owned or controlled by such
person or by any one or more of its subsidiaries, or by such person and one or
more of its subsidiaries.
1.17 "Tax Authority" shall mean the Internal Revenue Service and any
other state, local or foreign governmental authority responsible for the
administration of Taxes.
1.18 "Tax Claim" shall mean a notice of deficiency, proposed
adjustment, assessment, audit, examination, suit, dispute or other claim with
respect to Taxes or a Tax Return.
1.19 "Underpayment Rate" shall mean the interest rate specified
under Section 6621(a)(2) of the Code.
ARTICLE II
Preparation and Filing of Tax Returns
2.1 Preparation and Filing of Pre-Closing Period Tax Returns.
Gaylord shall prepare (or cause to be prepared) and timely file (or cause to
be timely filed) all Tax Returns with respect to any Pre-Closing Period that
includes GCI, GTC or the Limited Partnership (including all Tax Returns filed
on a consolidated, combined or unitary basis). Gaylord shall have sole
discretion as to the positions in and with respect to any Tax Return described
in the preceding sentence to the extent that it relates to GCI, GTC or the
Limited Partnership; provided, however, that such Tax Returns shall be
prepared on a basis consistent with the past practices of GCI, GTC and the
Limited Partnership. Gaylord shall deliver (or shall cause to be delivered) to
CBS a pro forma set of Tax Returns for each of GCI, GTC and the Limited
Partnership for the Pre-Closing Period ending on the Closing Date at least
twenty business days prior to the Due Date thereof.
2.2 Preparation and Filing of Certain Straddle Period Tax Returns.
CBS shall prepare (or cause to be prepared) all Straddle Period Tax Returns
which include GCI or GTC or the Limited Partnership and, at least twenty
business days prior to the Due Date thereof, shall deliver (or cause to be
delivered) such Tax Return to Gaylord for its review and comment, together
with a statement showing in reasonable detail CBS's calculation of any Taxes
attributable to a Pre-Closing Straddle Period. Any Tax Return described in the
preceding sentence shall be prepared on a basis consistent with the past
practice of GCI, GTC and the Limited Partnership. Gaylord shall have the right
to comment on such Tax Returns and any changes, modifications, additions, or
deletions suggested by Gaylord shall be made to such Tax Returns to the extent
they relate to a Pre-Closing Straddle Period; provided, that such changes,
modifications, additions, or deletions are consistent with past practice;
provided, further, that Gaylord's comments are received by CBS at least
fourteen business days prior to the Due Date of the applicable Tax Return. If
CBS does not accept any change, modification, addition, or deletion suggested
by Gaylord to any Straddle Period Tax Return, then the provisions of Article
IX shall govern the dispute. If the dispute has not
<PAGE>
been resolved prior to the Due Date for filing of the Tax Return, the Tax
Return shall be filed as originally proposed by CBS, reflecting any items
agreed to by the parties at such time. Gaylord shall pay (or shall cause to be
paid) to CBS the amount of Taxes relating to any Pre-Closing Straddle Period
based on the Tax Returns prepared by CBS. When the dispute is resolved
pursuant to Article IX, a settlement payment shall be made from CBS to Gaylord
in an amount equal to the excess, if any, of (i) the amounts paid by Gaylord
in respect of such Taxes over (ii) the amount of Taxes for the Pre-Closing
Straddle Period finally determined to be due, plus interest at the Chase
Manhattan Bank prime rate in effect from the date of the original payment from
Gaylord to CBS to the date on which CBS repays Gaylord pursuant to this
paragraph. CBS shall not file (or cause to be filed) such Tax Returns without
Gaylord's written consent, which shall not be unreasonably withheld or delayed
and shall be deemed to be given in the absence of timely written objection.
2.3 Preparation and Filing of Post-Closing Period Tax Returns. CBS
shall prepare (or cause to be prepared) and timely file (or cause to be timely
filed) any Tax Return with respect to any of GCI, GTC or the Limited
Partnership for any Post-Closing Tax Period.
2.4 Straddle Period Tax Years. To the extent permitted by law or
administrative practice, the taxable year of GCI, GTC and the Limited
Partnership which includes the Closing Date shall be treated as closing on
(and including) the Closing Date. All Tax items of the Limited Partnership for
the period ending on the Closing Date shall be included in the Gaylord Group
consolidated return, and in any state or local income tax return of GTC or GCI
for the taxable period ending on the Closing Date.
2.5 Section 754 Election. An election under Section 754 of the Code
(and comparable provisions of state or local tax law) shall be made on the Tax
Return of the Limited Partnership for its taxable year that includes or ends
on the Closing Date.
2.6 Amended Returns and Claims for Refund. Without the written
consent of Gaylord, none of CBS, GCI, GTC or the Limited Partnership shall
amend (or cause to be amended), or file (or cause to be filed) a claim for a
Tax refund with respect to, any Tax Returns for a Pre-Closing Period or which
relate to tax items in a Pre-Closing Straddle Period, other than disputed
items with respect to which Gaylord received payments pursuant to Section 2.2,
that included Gaylord, GCI, GTC or the Limited Partnership.
ARTICLE III
Payment in Respect of Taxes
3.1 Payment of Taxes by Gaylord. Gaylord shall pay (or cause to be
paid) in a timely manner to the appropriate Tax Authority all Taxes due with
respect to Tax Returns which it is required to file pursuant to Section 2.1.
For all Taxes in respect of Straddle Periods for which CBS is required to file
(or cause to be filed) Tax Returns pursuant to Section 2.2, Gaylord shall pay
CBS the amount of such Taxes
<PAGE>
relating to any Pre-Closing Straddle Period (as determined in accordance with
Section 2.2) at least five business days prior to the Due Date of the Tax
Return reporting such Taxes.
3.2 Payment of Taxes by CBS. CBS shall remit (or cause to be
remitted) in a timely manner to the appropriate Tax Authority all Taxes due in
respect of any Tax for which it is required to file a Tax Return pursuant to
Section 2.2; provided, however, that Gaylord shall have paid CBS for the
amount of such Taxes relating to any Pre-Closing Straddle Period, as provided
in Section 3.1.
3.3 Apportionment in Straddle Periods. Where it is necessary
pursuant to this Agreement to apportion between Gaylord, on the one hand, and
CBS, on the other hand, the Tax liability of GCI, GTC or the Limited
Partnership for a Straddle Period which is not treated under Section 2.4 as
closing on the Closing Date, such liability shall be apportioned between the
Pre-Closing Straddle Period and the Post-Closing Straddle Period on the basis
of an interim closing of the books, except that Taxes imposed on a periodic
basis (such as real property Taxes) shall be allocated on a daily basis.
ARTICLE IV
Representations, Warranties and Covenants for Tax Opinion
4.1 Joint Representations, Warranties and Covenants of the Parties.
Each of CBS, Newco 1, Newco 2, Gaylord, GTC, and GCI, after due inquiry,
hereby represents, warrants and covenants that, as of the date hereof and the
Effective Time:
(a) It understands that SASM&F will be relying upon the
representations, warranties and covenants set forth in this Article IV in
rendering the Tax Opinion.
(b) The consideration to be received by Gaylord in the Mergers
in exchange for the GCI Stock and the GTC Stock was negotiated by the parties
to the CBS Merger Agreement at arm's length.
(c) There is no intercorporate indebtedness for borrowed money
existing between (x) CBS and any of its Subsidiaries and (y) Gaylord and any
of its Subsidiaries, that was or will be issued, acquired, or settled at a
discount.
(d) In the Mergers, GCI Stock representing control of GCI and
GTC Stock representing control of GTC, each within the meaning of Section
368(c) of the Code, will be exchanged for CBS Preferred Stock. For purposes of
this representation, GCI Stock or GTC Stock exchanged in connection with the
Mergers for cash or other property originating with CBS will be treated as
outstanding GCI Stock or GTC Stock at the Effective Time.
(e) It will not take (or cause to be taken) any position on any
Tax Return, in any proceeding before any Tax Authority, or otherwise, that is
inconsistent with the treatment of the Mergers as "reorganizations" within the
meaning
<PAGE>
of Section 368(a) of the Code, unless otherwise required by a Final
Determination. This paragraph will not be deemed violated if, with the prior
written consent of Gaylord (which shall not be unreasonably withheld), CBS
makes protective refund claims taking a contrary position, if necessary to
keep open the applicable statutes of limitations for CBS for all taxable years
since the Closing Date, so that such statutes remain open so long as CBS is
potentially subject to an indemnification obligation under Section 5.3.
4.2 Representations, Warranties and Covenants of CBS and the Merger
Subsidiaries. Each of CBS, Newco 1 and Newco 2, after due inquiry, hereby
represents, warrants and covenants that, as of the date hereof and the
Effective Time:
(a) The facts relating to the contemplated Mergers to the
extent described in the CBS Merger Agreement are, insofar as such facts
pertain to CBS and the Merger Subsidiaries, true and correct in all material
respects.
(b) Except as provided in the CBS Merger Agreement, CBS and
each of the Merger Subsidiaries will pay their respective expenses, if any,
incurred in connection with the Mergers. However, to the extent any expenses
related to the Mergers are to be funded directly or indirectly by a party
other than the incurring party, such expenses are within the guidelines set
forth in Rev. Rul. 73-54, 1973-1 C.B. 187.
(c) Neither CBS nor either of the Merger Subsidiaries is an
investment company within the meaning of Section 368(a)(2)(F)(iii) and (iv) of
the Code.
(d) Prior to the Effective Time, CBS will be in control of the
Merger Subsidiaries within the meaning of Section 368(c) of the Code.
(e) Each of the Merger Subsidiaries is a corporation directly
owned by CBS, was formed at or about April 9, 1999, was created for the sole
purpose of facilitating the Mergers and has not conducted any business
activities other than in connection with the Mergers.
(f) The Merger Subsidiaries will have no material liabilities
assumed by GCI or GTC, and will not transfer to GCI or GTC any assets subject
to material liabilities.
(g) After the Mergers, (i) GCI will hold at least 90% of the
fair market value of its net assets held immediately prior to the Mergers, and
at least 70% of the fair market value of its gross assets held immediately
prior to the Mergers, (ii) GTC will hold at least 90% of the fair market value
of its net assets held immediately prior to the Mergers, and at least 70% of
the fair market value of its gross assets held immediately prior to the
Mergers, (iii) GCI will hold at least 90% of the fair market value of Newco
1's net assets and at least 70% of the fair market value of Newco 1's gross
assets held immediately prior to the Mergers and (iv) GTC will hold at least
90% of the fair market value of Newco 2's net assets and at least 70% of the
fair market value of Newco 2's gross assets held immediately prior to the
Mergers. For purposes of this representation, (w) amounts paid by GCI or GTC
to Gaylord in cash or other property (including any assets distributed to
Gaylord prior to the Mergers),
<PAGE>
(x) amounts paid by either of the Merger Subsidiaries to CBS in cash or other
property, (y) amounts paid by GCI, GTC or the Merger Subsidiaries to pay
reorganization expenses, and (z) all redemptions and distributions (except for
regular, normal dividends) made prior to or after the Mergers by GTC, GCI or
the Merger Subsidiaries, in each of (w) through (z), in connection with the
Mergers, will be included as assets of GCI, GTC or the Merger Subsidiaries,
respectively, held immediately prior to the Mergers. For purposes of this
representation, CBS assumes that the last sentence of Section 4.3(e) is
correct.
(h) Following the Mergers, GCI and GTC will continue their
respective historic business or use a significant portion of their respective
historic business assets in a business.
(i) Except for exchanges of CBS Preferred Stock for Viacom
Series C Preferred Stock pursuant to the Viacom Merger, none of CBS, any
Related Person to CBS, or any Person acting as an intermediary for CBS or such
a Related Person has a plan or intention to acquire any of the CBS Preferred
Stock issued in the Mergers.
(j) CBS has no plan or intention to liquidate GCI or GTC, to
merge GCI or GTC with or into another corporation, to cause GCI or GTC to
issue additional shares of stock that could result in CBS losing control of
GCI or GTC within the meaning of Section 368(c) of the Code, to sell, transfer
or otherwise dispose of the stock of GCI or GTC (except for transfers of stock
described in Treasury Regulation Section 1.368-2(k)(2) or the transfer by CBS
of the stock of GCI or GTC to Viacom pursuant to the Viacom Merger), or to
cause GCI or GTC to sell, transfer or otherwise dispose of any of its assets
(except for dispositions made in the ordinary course of business or transfers
of assets described in Treasury Regulation Section 1.368-2(k)(2)). Within the
two year period following the Closing Date, CBS will not liquidate GCI or GTC
or cause GCI or GTC to merge with or into another corporation.
(k) Neither CBS nor any of its Subsidiaries owns, directly or
indirectly, any GCI Stock or GTC Stock. Neither CBS nor any of its
Subsidiaries (during the period they have been Subsidiaries of CBS) owned,
directly or indirectly, any GCI Stock or GTC Stock in the five year period
immediately prior to the Effective Time. In addition, except pursuant to the
CBS Merger Agreement, no Related Person to CBS (i) owns or will own any GCI
Stock or GTC Stock before the Mergers or (ii) will acquire GCI Stock or GTC
Stock before the Mergers in connection with the Mergers (within the meaning of
Treasury Regulation Section 1.368-1(e)(2)).
(l) The consideration to be received by Gaylord in the Viacom
Merger in exchange for the CBS Preferred Stock was negotiated by the parties
to the Viacom Merger Agreement at arm's length.
(m) prior to the Viacom Effective Time, CBS, GTC, GCI and
Viacom shall execute the First Amendment to Amended and Restated Tax Matters
Agreement attached hereto as Annex A (the "First Amendment").
<PAGE>
4.3 Representations, Warranties, and Covenants of Gaylord, GCI and
GTC. Each of Gaylord, GCI and GTC, after due inquiry, represents, warrants and
covenants that, as of the date hereof and the Effective Time:
(a) The facts relating to the contemplated Mergers to the
extent described in the CBS Merger Agreement are, insofar as such facts
pertain to Gaylord, GCI and GTC, true and correct in all material respects.
(b) Except as provided in the CBS Merger Agreement, Gaylord,
GCI and GTC will pay their respective expenses, if any, incurred in connection
with the Mergers. However, to the extent any expenses related to the Mergers
are to be funded directly or indirectly by a party other than the incurring
party, such expenses are within the guidelines set forth in Rev. Rul. 73-54,
1973-1 C.B. 187.
(c) Neither Gaylord, GCI nor GTC is an investment company
within the meaning of Section 368(a)(2)(F)(iii) and (iv) of the Code.
(d) Neither GCI nor GTC nor any Related Person to GCI or GTC
has redeemed or otherwise acquired or has any present plan or intention to
redeem or otherwise acquire any GCI Stock or GTC Stock in anticipation of the
Mergers, or otherwise as part of a plan of which the Mergers are a part.
Except as contemplated by the CBS Merger Agreement, neither GCI nor GTC nor
any Related Person to GCI or GTC has made or has any present plan or intention
to make any extraordinary distributions with respect to GCI Stock or GTC
Stock.
(e) At the time of the Mergers, (i) GCI will hold at least 90%
of the fair market value of its net assets held immediately prior to the
Mergers, and at least 70% of the fair market value of its gross assets held
immediately prior to the Mergers and (ii) GTC will hold at least 90% of the
fair market value of its net assets held immediately prior to the Mergers, and
at least 70% of the fair market value of its gross assets held immediately
prior to the Mergers. For purposes of this representation, (x) amounts paid by
GCI or GTC to Gaylord in cash or other property (including any assets
distributed to Gaylord prior to the Mergers), (y) amounts paid by GCI or GTC
to pay reorganization expenses, and (z) all redemptions and distributions
(except for regular, normal dividends) made prior to the Mergers by GTC or
GCI, in each of (x) through (z), in connection with the Mergers, will be
included as assets of GCI or GTC, respectively, held immediately prior to the
Mergers. The sum of (A) the amounts referred to in clauses (x) through (z)
above and (B) any other amounts paid or transferred by GCI or GTC in
connection with the Mergers does not exceed 9% of the fair market value of the
net or gross assets of GCI or GTC, as applicable, held immediately prior to
the Mergers.
(f) Neither GCI nor GTC will have outstanding any warrants,
options, convertible securities, or any other type of right pursuant to which
any Person could acquire stock in GCI or GTC, that if exercised or converted,
would affect CBS's acquisition or retention of control of GCI or GTC, as
defined in Section 368(c) of the Code.
(g) Neither GTC nor GCI is a party to, or is under the
<PAGE>
jurisdiction of a court in a case under Title 11 of the United States Code,
and neither GCI nor GTC is in receivership, foreclosure, or similar proceeding
in a federal or state court (including a case within the meaning of Section
368(a)(3)(A) of the Code.)
(h) Gaylord has no plan or intention to convert any CBS
Preferred Stock into CBS Common Stock prior to the Viacom Merger.
(i) Gaylord has no plan or intention to convert any Viacom
Series C Preferred Stock received in exchange for its CBS Preferred Stock in
the Viacom Merger into Viacom Class B Common Stock.
ARTICLE V
Indemnification
5.1 Obligations of Gaylord. Except as provided in Section 5.3,
Gaylord shall indemnify and hold the CBS Indemnitees harmless from and against
the following:
(a) any liability for Taxes of Gaylord, GCI, GTC or the Limited
Partnership for any Pre-Closing Period and any Pre-Closing Straddle Period,
including any liability of any of GCI or GTC arising under the provisions of
Treasury Regulation Section 1.1502-6(a) or comparable provisions of foreign,
state or local law for any Pre-Closing Period and Pre-Closing Straddle Period
(other than liabilities for Taxes described in Section 5.2(b));
(b) any liability for income, state franchise or similar Taxes
(excluding any transfer or similar taxes covered by Section 5.1 of the CBS
Merger Agreement) of GCI, GTC or the Limited Partnership with respect to any
taxable income recognized solely from the transfer of GTC Stock and GCI Stock
to CBS in exchange for the consideration provided for in the CBS Merger
Agreement
(c) any liability for Taxes of the CBS Indemnitees arising from
a breach of any representation or warranty contained in Section 2.6 of the CBS
Merger Agreement, calculated as the amount of the excess of (x) the actual
liability for Taxes of the CBS Indemnitee for the relevant taxable period over
(y) the liability for Taxes of the CBS Indemnitee for such taxable period
assuming such breach of representation or warranty had not occurred but with
all other facts unchanged.
5.2 Obligations of CBS. CBS shall indemnify and hold the Gaylord
Indemnitees harmless from and against the following:
(a) any liability for Taxes of GCI, GTC, or the Limited
Partnership for any Post-Closing Period and any Post-Closing Straddle Period
(other than liabilities for Taxes described in Section 5.1(b) or (c)); and
(b) any liability for Taxes of the Gaylord Indemnitees arising
<PAGE>
from a breach of any representation or warranty contained in Section 3.11 of
the CBS Merger Agreement, calculated as the amount of the excess of (x) the
actual liability for Taxes of the Gaylord Indemnitee for the relevant taxable
period over (y) the liability for Taxes of the Gaylord Indemnitee for such
taxable period assuming such breach of representation, covenant or warranty
had not occurred but with all other facts unchanged.
5.3 Additional Obligations of CBS.
(a) (i) If, notwithstanding the intention of the parties
hereto,
(1) there is a Final Determination that the GTC Merger or
the GCI Merger does not qualify as a "reorganization" within the meaning
of Section 368(a) of the Code,
(2) such failure to qualify as a "reorganization" is
attributable to (A) a breach by CBS of a representation, covenant or
warranty contained in Section 4.1 or Section 4.2 of this Agreement, (B)
any amendment to the Viacom Merger Agreement attached as Schedule 5.13 to
the CBS Merger Agreement (regardless of the effective date of such
amendment), or (C) a failure of any representation, covenant or warranty
contained in the First Amendment to be true (whether or not such First
Amendment is executed as of the Viacom Effective Time),
(3) Gaylord has not breached a representation, covenant or
warranty contained in Section 4.1(b), (c), (d) or (e) and
(4) there is no (A) breach of any representation, covenant
or warranty by Gaylord, GCI or GTC contained in Section 4.3, (B)
conversion by Gaylord of any Viacom Series C Preferred Stock into Viacom
Class B Common Stock, or (C) conversion of CBS Preferred Stock into
shares of CBS Common Stock prior to the Viacom Merger, that in any case
(A), (B) or (C), materially contributes to such failure to qualify as a
reorganization,
then CBS shall indemnify and hold the Gaylord Indemnitees harmless from and
against any liability for Taxes of Gaylord, Gaylord's Subsidiaries, GCI, GTC
or the Limited Partnership arising from any such breach, calculated as the
amount of the excess of (x) the actual liability for Taxes of Gaylord,
Gaylord's Subsidiaries, GCI, GTC or the Limited Partnership for the taxable
year that includes the Closing Date over (y) the liability for Taxes of
Gaylord, Gaylord's Subsidiaries, GCI, GTC or the Limited Partnership for such
taxable year assuming such breach of representation, covenant or warranty had
not occurred but with all other facts unchanged. In making the calculation in
the preceding sentence, any Taxes imposed on the Gaylord Indemnitees as a
result of receiving indemnity payments under this Section 5.3(a)(i) shall be
disregarded and not indemnified against by CBS.
<PAGE>
(ii) If (1) an amount would be payable by CBS to a
Gaylord Indemnitee under Section 5.3(a)(i), (2) within ten years after the
Closing Date Gaylord (or a successor or affiliate) disposes (including a
constructive sale under Section 1259 of the Code) of all or a portion of its
CBS Preferred Stock (or a successor asset which is "substituted basis
property" within the meaning of Section 7701(a)(42) of the Code including the
CBS Common Stock, the Viacom Series C Preferred Stock and the Viacom Class B
Common Stock) in one or more taxable transactions and (3) as a result of the
Final Determination described in Section 5.3(a)(i)(1), Gaylord (or a successor
or affiliate) has a tax basis in such CBS Preferred Stock (or such successor
asset) equal to the fair market value of such CBS Preferred Stock on the
Closing Date, then the amount payable by CBS to the Gaylord Indemnitees under
Section 5.3(a)(i) shall be reduced (or, to the extent that such taxable
disposition within such ten year period occurs after such Final Determination,
Gaylord shall reimburse CBS for any such payment) to the extent necessary so
that the Gaylord Indemnitees are in the same after-Tax position as if the
Mergers qualified as "reorganizations" under Section 368(a) of the Code
(taking into account the Tax consequences of the Mergers, such taxable
disposition(s) of such CBS Preferred Stock (or such successor asset),
Gaylord's receipt of the indemnity payments from CBS under Section 5.3(a)(i),
and any reduction or return of such indemnity payments to CBS pursuant to this
Section 5.3(a)(ii) but disregarding any increased tax basis in the CBS
Preferred Stock (or such successor asset) that has not been so disposed of);
provided, however, that if the conditions described in Section 5.3(b)(i),
(iii) and (iv) are satisfied, the net amount of any payments from CBS to the
Gaylord Indemnitees pursuant to this Section 5.3(a)(ii) to be retained by the
Gaylord Indemnitees hereunder shall in no event be less than the amount
payable by CBS pursuant to Section 5.3(b)(A) and (B).
(b) If, notwithstanding the intention of the parties hereto,
(i) there is a Final Determination that the GTC Merger does not qualify as a
"reorganization" within the meaning of Section 368(a) of the Code, (ii)
Section 5.3(a) does not apply, (iii) CBS obtains a "cost" basis in
substantially all the assets of the Limited Partnership (based on the value of
the CBS Preferred Stock issued to Gaylord in exchange for the stock of GTC),
and (iv) CBS is not precluded from depreciating or amortizing substantially
all of the tax basis of the otherwise depreciable or amortizable assets of the
Limited Partnership because of the "anti-churning" provisions under Section
197(f))(9) of the Code, then CBS shall pay to Gaylord the amount of (A) $40
million, subject to reduction, as determined pursuant to Section 6.1(c), plus
(B) the amount of interest, if any, received by CBS from any Taxing Authority
which is attributable to any overpayment of Taxes solely resulting from the
GTC Merger failing to qualify as a "reorganization" within the meaning of
Section 368(a) of the Code.
5.4 Tax Obligations Arising Under a Pre-Closing Period Tax Sharing
Agreement. Except as set forth in this Agreement, all existing tax sharing
agreements and practices regarding Taxes and their payment, allocation or
sharing between any member of the Gaylord Group and any of GCI, GTC or the
Limited Partnership shall be terminated as of the Closing Date and no
remaining liabilities thereunder shall exist thereafter.
5.5 Refunds. Gaylord shall be entitled to any refund of Taxes of
GCI, GTC or the Limited Partnership attributable to any Pre-Closing Period and
any
<PAGE>
Pre-Closing Straddle Period; provided, however, that Gaylord shall not be
entitled to any such refunds of Taxes with respect to any amounts paid to
Gaylord pursuant to Section 2.2. If CBS, GCI, GTC, the Limited Partnership or
any of their Subsidiaries receives any refund of Tax to which Gaylord is
entitled pursuant to this Section 5.5, CBS shall promptly notify Gaylord and
shall pay the amount of any such refund promptly after the receipt of such
refund.
5.6 Payments.
(a) To the extent that a party (the "Payor") is required to
make a payment to another party (the "Payee") pursuant to this Article V, the
Payor shall pay the Payee the amount of such payment obligation no later than
five business days after the later of (i) a Final Determination or other event
giving rise to the payment obligation and (ii) the Payee's presentment to the
Payor of its calculation of the amount payable by the Payor.
(b) Any amount payable under this Article V shall be payable in
cash in immediately available funds.
5.7 Limitations. Except as otherwise provided in this Agreement, the
principles of Section 8.5 of the CBS Merger Agreement shall apply to any
indemnity payment under this Agreement.
5.8 Allocation of Indemnity Payments. Gaylord and CBS agree to
allocate any indemnification payments received or paid by either party under
this Article V to the exchange of GTC Stock and GCI Stock, respectively, in
the Mergers on the same percentage basis as is provided in Section 1.9 of the
CBS Merger Agreement.
5.9 Exclusive Remedy. The parties acknowledge and agree that the
right of the Gaylord Indemnitees for indemnification as provided for in
Section 5.3 shall be the sole and exclusive remedy of the Gaylord Indemnitees
in the event of any breach by CBS, Newco 1 or Newco 2 of any of their
respective representations, covenants and warranties contained in Section 4.1
and 4.2 of this Agreement.
ARTICLE VI
Tax Claims
6.1 General.
(a) Gaylord shall have exclusive control over Tax Claims for
which Gaylord is liable pursuant to Section 5.1, and any other Tax Claim
concerning the status of the GTC Merger as a reorganization under Section
368(a) of the Code (any such claim, a "Merger Claim") that is not covered by
Section 6.1(b) or (c).
(b) CBS and Gaylord shall jointly control (at each party's own
expense) any Merger Claim that would result in an indemnity obligation under
Section 5.3(a) hereof, if Section 5.3(a)(ii) does not apply. Neither party may
settle,
<PAGE>
concede or make any concession (including failure to appeal such Merger Claim)
without the other party's written consent.
(c) With respect to any Merger Claim, if (1) it would result in
an indemnity obligation under Section 5.3(a) and Section 5.3(a)(ii) applies,
or it would result in an indemnity obligation under Section 5.3(b) and (2) the
net present value of the Tax benefits reasonably expected to be received by
CBS and its Subsidiaries as a result of a Final Determination with respect to
such Merger Claim (the "CBS Tax Benefit") is less than $40 million, then
Gaylord shall be entitled to elect either (x) to jointly control the Merger
Claim with CBS as described in Section 6.1(b), in which case CBS's
indemnification obligation under Section 5.3(b)(A) (directly or through the
operation of Section 5.3(a)(ii)) shall be $40 million, or (y) to have
exclusive control over the Merger Claim as described in Section 6.1(a) (but
subject to CBS's right to participate in, but not control, the Merger Claim at
its own expense), in which case CBS's indemnification obligation under Section
5.3(b)(A) (directly or through the operation of Section 5.3(a)(ii)) shall be
the lesser of $40 million and the amount of the CBS Tax Benefit.
(d) CBS shall have exclusive control over all other Tax Claims.
(e) The party controlling a Tax Claim pursuant to this Section
6.1 shall have the sole right to contest, litigate and Dispose of such Tax
Claim and to employ counsel of its choice at its sole expense.
6.2 Tax Claim Management. CBS or Gaylord, as the case may be, shall
promptly notify the other party in writing of any Tax Claim that may
reasonably be likely to result in liability of the other party under this
Agreement; provided, however, that the failure to provide such notice shall
not diminish the indemnifying party's obligation hereunder except to the
extent such failure actually prejudices the indemnifying party's position as a
result thereof. With respect to any such Tax Claim, the party not controlling
such Tax Claim shall (i) not make any submission to any Tax Authority without
offering the other party the opportunity to review such submission, (ii) not
take any action or make (or purport to make) any representations in connection
with such Tax Claim with respect to issues affecting the other party's
indemnity hereunder, (iii) keep the other party informed as to any information
that it receives regarding the progress of such Tax Claim, (iv) provide the
other party with any information that it receives regarding the nature and
amounts of any proposed Disposition of the Tax Claim, (v) permit the other
party to participate in all conferences, meetings or proceedings with any Tax
Authority in which the indemnified Tax Claim is or may be a subject, and (vi)
permit the other party to participate in all court appearances in which the
indemnified Tax Claim is or may be a subject. With respect to any Tax Claim
relating to a Pre-Closing Period for which Gaylord is liable pursuant to this
Agreement, CBS shall either file (or cause to be filed) submissions at
Gaylord's direction or appoint (or cause to be appointed) Gaylord or its
authorized representatives as additional authorized representatives entitled
to communicate fully with the Internal Revenue Service with respect to such
Tax Claim.
<PAGE>
ARTICLE VII
Cooperation
CBS and Gaylord shall (and shall cause their respective Subsidiaries
to) cooperate with each other in the preparation and filing of any Tax Returns
and the conduct of any audit or other proceeding and each shall execute and
deliver such powers of attorney and make available such other documents as are
necessary to carry out the intent of this Agreement. Such cooperation shall
include, without limitation, (a) making employees available on a mutually
convenient basis to provide such assistance as might reasonably be required
and (b) providing such information as might reasonably be required in
connection with any such Tax Return or proceeding, including without
limitation, records, returns, schedules, documents, work papers or other
relevant materials. In addition, Gaylord shall provide such available
information to CBS as is reasonably necessary for CBS to determine its tax
basis in the stock of GTC and GCI and in the Limited Partnership, and the tax
basis of the Limited Partnership in its assets.
The parties hereto shall use reasonable efforts to reduce any
transfer, sales or other similar Taxes that may be incurred with respect to
the transactions contemplated by the CBS Merger Agreement.
ARTICLE VIII
Retention of Records; Access
CBS, GCI, GTC and the Limited Partnership and Gaylord shall (a)
until the expiration of the relevant statutes of limitations (giving effect to
any applicable extensions or waivers), retain records, documents, accounting
data and other information (including computer data) necessary for the
preparation and filing of all Tax Returns in respect of Taxes of GCI, GTC and
the Limited Partnership or for a Tax Claim by a Tax Authority relating to such
Tax Returns; and (b) give to the other group reasonable access to such
records, documents, accounting data and other information (including computer
data) and to its personnel (ensuring their cooperation) and premises, with
reimbursement by the requesting group of reasonable out-of-pocket costs
incurred therewith, for the purpose of the review or audit of such Tax Returns
to the extent relevant to an obligation or liability of any party under this
Agreement. Prior to destroying any records, documents, data or other
information described in this Article VIII, the group wishing to destroy such
items shall give the other group a reasonable opportunity to obtain such items
(at such other group's expense).
ARTICLE IX
Disputes
If the parties disagree as to the calculation of a Tax or the amount
of (but not liability for) any payment to be made under this Agreement, the
parties shall cooperate in good faith to resolve any such dispute, and any
agreed-upon amount shall
<PAGE>
be paid to the appropriate party. If the parties are unable to resolve any
such dispute within fifteen business days thereafter, such dispute shall be
resolved by an internationally recognized accounting firm acceptable to both
CBS and Gaylord. The decision of such firm shall be final and binding. The
fees and expenses incurred in connection with such decision shall be shared by
CBS and Gaylord in accordance with the final allocation of the Tax liability
in dispute. Following the decision of such accounting firm, the parties shall
each take (or cause to be taken) any action that is necessary or appropriate
to implement such decision, including, without limitation, the filing of
amended Tax Returns and the prompt payment of underpayments or overpayments,
with interest calculated on such underpayments or overpayment at the
Underpayment Rate from the date such payment was due.
ARTICLE X
Survival
Notwithstanding any other provision in this Agreement to the
contrary, the rights and obligations provided for in this Agreement shall not
terminate any earlier than the expiration of the applicable statute of
limitation for the relevant taxable periods in question (giving effect to any
applicable waivers or extensions).
ARTICLE XI
Miscellaneous Provisions
11.1 Interest on Late Payments. Any payment required by this
Agreement which is not made on or before the date required to be made
hereunder shall bear interest after such date at the Underpayment Rate.
11.2 Notices and Governing Law. All notices required or permitted to
be given pursuant to this Agreement shall be given, and the applicable law
governing the interpretation of this Agreement shall be determined, in
accordance with the applicable provisions of the CBS Merger Agreement.
11.3 Amendments. This Agreement may not be amended except by an
agreement in writing, signed by the parties.
11.4 Binding Effect; No Assignment; Third Party Beneficiaries. This
Agreement shall be binding on, and shall inure to the benefit of, the parties
and the respective successors, assigns, and Persons controlling any of the
corporations bound hereby. CBS, on the one hand, and Gaylord, on the other
hand, hereby guarantee the performance of all actions, agreements and
obligations provided for under this Agreement of CBS's Subsidiaries and
Gaylord's Subsidiaries, respectively. CBS and Gaylord shall, upon the written
request of any other party, cause any of their respective Subsidiaries to
execute this Agreement. No party to this Agreement shall assign any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of Gaylord, in the case of CBS, and CBS, in the case of
Gaylord. No Person (including, without limitation, any employee of a party or
any stockholder of a party) shall be, or shall be deemed to be, a third party
beneficiary of this Agreement.
<PAGE>
11.5 Entire Agreement. This Agreement constitutes the entire
agreement of the parties concerning the subject matter hereof and supersedes
all prior agreements, whether or not written, concerning such subject matter.
To the extent that the provisions of this Agreement are inconsistent with the
provisions of the CBS Merger Agreement, the provisions of this Agreement shall
prevail.
11.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute together the same documents.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GAYLORD ENTERTAINMENT COMPANY
By:
/s/ Joseph B. Crace
--------------------------------
Name: Joseph B. Crace
Title:
GAYLORD TELEVISION COMPANY
By:
/s/ Joseph B. Crace
--------------------------------
Name: Joseph B. Crace
Title:
GAYLORD COMMUNICATIONS, INC.
By:
/s/ Joseph B. Crace
--------------------------------
Name: Joseph B. Crace
Title:
CBS CORPORATION
By:
/s/ Louis J. Briskman
--------------------------------
Name: Louis J. Briskman
Title:
October 12, 1999
CBS Corporation
51 West 52nd Street
New York, N.Y. 10019
Re: CBS Corporation Registration Statement
On Form S-3 Relating to the CBS/Gaylord Transaction
Ladies and Gentlemen:
As set forth in the Registration Statement on Form S-3 (the "Registration
Statement") to be filed by CBS Corporation, a Pennsylvania corporation
("CBS"), under the Securities Act of 1933, as amended, relating to the sale of
shares of CBS's common stock, par value $1.00 per share ("CBS Common Stock"),
issuable upon conversion of shares of CBS's Series B Participating Preferred
Stock, par value $1.00 per share ("Preferred Stock"), I am rendering this
opinion with respect to the validity of the shares of CBS Common Stock to be
issued. At your request, this opinion is being furnished to you for filing as
Exhibit 5 to the Registration Statement.
As set forth in the Registration Statement, CBS will issue shares of the
Preferred Stock in connection with the consummation of the mergers of CBS
Dallas Media, Inc., a Delaware corporation and a wholly-owned subsidiary of
CBS ("CBS Dallas Media"), with and into Gaylord Television Company, a Delaware
corporation ("GTC"), and CBS Dallas Ventures, Inc., a Delaware corporation and
a wholly-owned subsidiary of CBS ("CBS Dallas Ventures"), with and into
Gaylord Communications, Inc., a Texas corporation ("GCI"), pursuant to the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of April 9,
1999, as amended as of October 8, 1999, by and among Gaylord Entertainment
Company, a Delaware corporation, CBS, GTC, GCI, CBS Dallas Media and CBS
Dallas Ventures. The Preferred Stock is convertible by the holder into shares
of CBS Common Stock at any time. The Registration Statement relates to the
shares of CBS Common Stock issuable upon conversion of the Preferred Stock. In
my capacity as General Counsel for CBS, I have examined, either personally or
indirectly through lawyers who report to me or through other counsel,
originals or copies (certified or otherwise identified to my satisfaction) of
the Merger Agreement and such corporate records, agreements, documents and
other instruments, and such certificates or comparable documents of public
officials and of officers and representatives of CBS, and have made such
inquiries of such officers and representatives, as I have deemed relevant and
necessary as the basis for the opinions hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all
questions of fact material to these opinions that have not been independently
established, I have relied upon certificates or comparable documents of
officers and representatives of CBS and upon the representations and
warranties of CBS contained in the Merger Agreement.
Based on the foregoing, I am of the opinion that the shares of CBS Common
Stock to be issued upon the conversion of the shares of Preferred Stock to be
issued pursuant to the Merger Agreement have been duly authorized and, when
any such shares of CBS Common Stock have been issued upon any such conversion,
such shares of CBS Common Stock will be validly issued, fully paid and
nonassessable.
<PAGE>
2
I express no opinion with respect to the laws of any jurisdiction other than
the corporate laws of the Commonwealth of Pennsylvania and the federal
securities laws of the United States.
I hereby consent to the use of this opinion letter as an exhibit to the
Registration Statement and to any and all references to me in the prospectus
which is a part of the Registration Statement.
Very truly yours,
/s/ Louis J. Briskman
-------------------------
Louis J. Briskman
Executive Vice President and
General Counsel
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated January 27, 1999,
appearing on page 21 of CBS Corporation's Form 10-K/A and page 55 of CBS
Corporation's Form 10-K for the year ended December 31, 1998, incorporated by
reference in this registration statement of the Company and the reference to
our firm under the heading 'Experts' in this registration statement.
/s/ KPMG LLP
------------------------------
New York, New York
October 6, 1999
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 dated
October 12, 1999 of our report dated October 16, 1998 included in King World
Productions, Inc.'s Annual Report on Form 10-K for the year ended August 31,
1998 and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
-------------------------
New York, New York
October 12, 1999
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of CBS Corporation of our report dated February 8, 1999,
except for the first paragraph of Note 2, which is as of February 25, 1999,
relating to the financial statements and financial statement schedule of
Viacom Inc., which appears in CBS Corporation's Form 8-K dated October 8,
1999. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.
PricwaterhouseCooopers LLP
New York, New York
October 12, 1999
