Exhibit 99.2
Execution Copy
NEITHER THIS NOTE NOR THE SHARES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND EXCEPT FOR ANY TRANSFERS SPECIFICALLY AUTHORIZED UNDER THE TERMS OF
THIS NOTE, NEITHER THIS NOTE NOR SUCH SHARES MAY BE OFFERED, SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT REGISTRATION THEREOF UNDER THE ACT OR
COMPLIANCE WITH RULE 144 OR RULE 144A PROMULGATED UNDER THE ACT, OR UNLESS GAMCO
INVESTORS, INC. HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO
GAMCO INVESTORS, INC., THAT SUCH REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS
NOTE OR ANY INTEREST HEREIN IS ALSO SUBJECT TO RESTRICTIONS UNDER THE TERMS
HEREOF.
CONVERTIBLE PROMISSORY NOTE
---------------------------
$50,000,000.00 Dated: August 14, 2001
Rye, New York
FOR VALUE RECEIVED, the undersigned, GAMCO INVESTORS, INC., a
New York corporation formerly known as Gabelli Asset Management, Inc. ("GAMCO"),
promises to pay to the order of CASCADE INVESTMENT, L.L.C., a Washington limited
liability company ("Cascade"), or its permitted registered assigns or at such
other place or places as the Holder (as defined below) may designate in writing,
on August 14, 2011, the principal sum of FIFTY MILLION and NO/100 DOLLARS
($50,000,000) minus the principal amount converted or sold after June 30, 2006
pursuant to the Put Option (as defined below) or the Change of Control Put
Option (as defined below) (such amount, as of any determination date, the
"Unpaid Principal Amount") on or before August 14, 2011, and to pay interest
thereon from and including August 14, 2001 (the "Issue Date") or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, semi-annually on February 14 and August 14 in each year,
commencing February 14, 2002, and at Maturity (each, an "Interest Payment Date")
at the rate of (i) 6.5% per annum for the period from and including the Issue
Date to but excluding August 14, 2002, (ii) 6.0% per annum for the period from
and including August 14, 2002 to but excluding August 14, 2003, (iii) 5.0% per
annum for the period from and including August 14, 2003 to but excluding
September 15, 2006 and (iv) 6.0% per annum from and including September 15, 2006
until August 14, 2011, until the principal hereof is paid or made available for
payment; provided, however, that (i) upon the occurrence and during the
continuance of an Event of Default (as defined below) this Note and (ii) any
principal and any such installment of interest which is overdue, in each case
shall bear interest at the rate of 15% per annum (or, if less, the maximum
interest rate permitted by the laws of the State of Washington). The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the Person in whose name this Note is registered at the close of
business on the day immediately prior to such Interest Payment Date (whether or
not a Business Day). Payment of the principal of and interest on this Note will
be made in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
Any payments in respect of this Note shall first be applied to
Enforcement Costs (as defined below), then to interest and then to principal. If
it is ever determined that any rate of interest payable in respect of this Note
exceeds the maximum rate (if any) prescribed by applicable law, then any portion
of interest payments representing any amounts in excess of said maximum shall be
applied as provided in the preceding sentence.
As used herein, "Maturity" means the date on which the
principal of this Note becomes due and payable as provided herein, whether at
its stated maturity, by declaration of acceleration or otherwise and "Holder"
means, at any time, the person in whose name this Note is registered in the Note
Register (as defined below).
This Convertible Promissory Note ("Note") was issued by GAMCO
pursuant to that certain Note Purchase Agreement, dated as of August 10, 2001,
which has been amended by the First Amendment thereto, dated as of July 1, 2003,
the Second Amendment thereto, dated as of August 4, 2004, the Third Amendment
thereto, dated as of February 28, 2005, the Fourth Amendment thereto, dated as
of June 30, 2006, and the Fifth Amendment thereto, dated as of April 18, 2007,
(as so amended, the "Purchase Agreement"), in each case among GAMCO, Cascade and
the Gabelli Stockholders. Capitalized terms not otherwise defined in this Note
shall have the meaning set forth in the Purchase Agreement, which definitions
are incorporated herein.
No Redemption or Prepayment Prior to September 15, 2006
-------------------------------------------------------
▇▇▇▇▇ agrees and acknowledges that the conversion feature of
this Note during the term of the Note is a valuable right and that the Holder
would not have purchased this Note without assurances that the Note would not be
called or prepaid by GAMCO. Accordingly, GAMCO acknowledges and agrees that
prior to September 15, 2006 it shall not be entitled to and will not, without
the consent of the Holder, make any prepayments of principal on this Note other
than pursuant to an acceleration of this Note or Forced Conversion (as
hereinafter defined), in each case as provided below. GAMCO may redeem this Note
in whole but not in part on any date on or after September 15, 2006 (the
"Redemption Date") if (i) at least 30 days' prior to the Redemption Date, GAMCO
delivers to Holder a written notice stating that it intends to effect such a
redemption and specifying the Redemption Date, (ii) on the Redemption Date,
GAMCO delivers to Holder a certificate, dated the Redemption Date, duly executed
and delivered by the chief executive officer of GAMCO certifying that, to the
best of his knowledge after reasonable investigation, neither he nor GAMCO is
then in possession of any non-public information concerning GAMCO, any of its
subsidiaries or any of their businesses or operations which could reasonably be
expected to have a material positive effect on the market price (or, if no such
market price exists, the fair market value) of the Common Stock or other
consideration issuable upon conversion of the Note and (iii) on the Redemption
Date, GAMCO pays to Holder by wire transfer of immediately available funds cash
in an amount equal to 101% of the principal amount of this Note plus all accrued
but unpaid interest thereon to but excluding the Redemption Date (the delivery
of such notice and certificate and the making of such payment are referred to
herein collectively as the "Required Actions"). If the market price of the
Common Stock could not reasonably be expected to exceed the then current
Conversion Price after disclosure of any non-public information concerning
GAMCO, any of its subsidiaries or any of their businesses or operations, then
such non-public information shall be conclusive presumed not to have a material
positive effect for purposes of the immediately preceding sentence. This Note
will be fully discharged and cease to have any further legal force or effect if
and when GAMCO has fully performed all of the Required Actions on the Redemption
Date, and the Holder agrees to return this Note to GAMCO promptly following such
full performance.
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Events of Default
-----------------
"Event of Default", wherever used with respect to this Note,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgement, decree or order of any court or
any order, rule or regulation of any Governmental Authority):
(a) Payment Default. GAMCO shall fail to pay or cause to be paid
all or any portion of the principal of or interest on this
Note when it becomes due and payable, and, in the event of
failure to pay interest on the Note, such failure continues
for 10 days and time for payment has not been extended or
deferred by the Holder; or
(b) Letter of Credit Default. The Letter of Credit Issuer shall
fail to honor a conforming draw under the Letter of Credit
or GAMCO shall breach its obligations with respect to the
Letter of Credit contained in Section 4.3 of the Purchase
Agreement, and such failure continues for 5 days and time
for payment has not been extended or deferred by the Holder;
or
(c) Put Option Default. GAMCO shall fail to pay or cause to be
paid all or any portion of the Put Consideration when it
becomes due and payable, and such failure continues for 5
days and time for payment has not been extended or deferred
by the Holder; or
(d) Change of Control Put Option Default. GAMCO shall fail to
pay or cause to be paid all or any portion of the Change of
Control Put Consideration when it becomes due and payable;
or
(e) Breach of Representation or Warranty. Any representation or
warranty made by GAMCO in the Purchase Agreement shall prove
to have been untrue or misleading when made in any respect
that is material and adverse to the value of the Holder's
investment in the Note or the Conversion Shares; provided,
however, that this shall constitute an Event of Default only
if Cascade or one of its Affiliates (as defined below) is
the Holder and if the Holder accelerates this Note as
provided below during the period in which any such
representation and warranty survives as provided in the
Purchase Agreement; or
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(f) Breach of Other Covenants or Failure of any Condition. GAMCO
shall fail to perform, keep or observe any agreement or
covenant contained in this Note or the Purchase Agreement
that is not covered by clauses (a) through (e) above, and
any such failure shall remain unremedied for thirty (30)
days after written notice thereof shall have been given to
GAMCO by the Holder; provided, however, that if any such
failure is not susceptible to cure within 30 days and GAMCO
commences to cure such failure within said 30-day period,
then no Event of Default shall be deemed to have occurred if
GAMCO diligently prosecutes said cure thereafter to
completion and cures said failure by the sixtieth (60th) day
after the date of said notice; or
(g) Cross Defaults (Payment and Other). GAMCO or any of its
Subsidiaries that are at the time significant subsidiaries
of GAMCO within the meaning of Rule 1-02(w) of Regulation
S-X promulgated by the SEC as of the date of this Note
(each, a "Significant Subsidiary") shall be in default under
indebtedness for borrowed money with an aggregate principal
amount of twenty five million dollars ($25,000,000) or more
to any person or persons and such default (i) shall
constitute a failure to make any payment of or with respect
to such indebtedness or (ii) permits the holder thereof to
accelerate the payment of such indebtedness or otherwise
causes such indebtedness to become due and payable prior to
its stated maturity. Notwithstanding the foregoing, there
shall not be an Event of Default under this section (g)
until expiration of, without cure, any period for cure
contained in any other agreement regarding such
indebtedness; or
(h) Judgments. A final judgment or final order (not covered by
insurance, treating deductibles, self-insurance and
retentions as not so covered) for the payment of money in
excess of $25.0 million in the aggregate for all such
judgments and orders is entered by a court or courts of
competent jurisdiction against GAMCO or any of its
Significant Subsidiaries and shall not be paid or
discharged, and there shall be a period of 60 consecutive
days after the final judgment or order that causes such
aggregate amount to exceed $25.0 million during which a stay
of enforcement of such final judgment or order is not in
effect; or
(i) Involuntary Bankruptcy Events. The entry by a court having
jurisdiction in the premises of a decree or order (A) for
relief in respect of GAMCO, any of its Significant
Subsidiaries or, prior to the expiration or return to GAMCO
of the Letter of Credit, the Letter of Credit Issuer (if a
substitute Letter of Credit is not delivered by GAMCO to the
Holder within 60 days of such decree or order) (each, a
"Subject Entity") in an involuntary case or proceeding under
any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) adjudging any
Subject Entity bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of
any Subject Entity under any applicable Federal or state
law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of
any Subject Entity or of any substantial part of any
property of any Subject Entity, or ordering the winding up
or liquidation of the affairs of any Subject Entity, and the
continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
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(j) Voluntary Bankruptcy Events. Any Subject Entity commences a
voluntary case or proceeding under any applicable Federal or
state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be
adjudicated as bankrupt or insolvent, or the consent by any
Subject Entity to the entry of a decree or order for relief
in respect of it in an involuntary case or proceeding under
any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against
it, or the filing by any Subject Entity of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or state law, or the consent by any
Subject Entity to the filing of such a petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
other similar official of such Subject Entity or of any
substantial part of such Subject Entity's property, or the
making by any Subject Entity of an assignment for the
benefit of creditors, or the admission by any Subject Entity
in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by any
Subject Entity in furtherance of any such action.
If an Event of Default (other than an Event of Default
specified in clause (i) or (j) above with respect to GAMCO) occurs and is
continuing, the Holder may declare the principal amount of this Note and all
accrued and unpaid interest hereon to be immediately due and payable. If an
Event of Default specified in clause (i) or (j) above occurs with respect to
GAMCO, the principal amount of the Note and all accrued and unpaid interest
hereon shall automatically become and be immediately due and payable without any
declaration or other act on the part of the Holder or any other Person.
Conversion Rights
-----------------
The Holder shall have the right to convert this Note as
provided in Exhibit A hereto, which Exhibit shall be incorporated by reference
herein.
If the Closing Price (as hereinafter defined) of the Common
Stock is at least 125%, 150%, 175% or 200%, as the case may be, of the
Conversion Price (as hereinafter defined) on each Trading Day (as hereinafter
defined) during any period of 20 consecutive Trading Days (each, a "Qualified
Trading Period") occurring within any six month period beginning on the Exercise
Date (as hereinafter defined) or any six month anniversary thereof and ending on
the next six month anniversary of the Exercise Date (each, a "Six Month
Period"), then on any date on or after the tenth Business Day following the last
trading day of any such Qualified Trading Period during such Six Month Period
(each a "Conversion Date") GAMCO may convert any portion of the Unpaid Principal
Amount which, together with the aggregate principal amount of this Note that has
been converted by the Holder on or prior to such Conversion Date or by GAMCO
pursuant to this provision with respect to such Six Month Period, does not
exceed the Maximum Conversion Amount (as defined below) with respect to such Six
Month Period, into fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest full share of Common Stock) at
the Conversion Price in effect on the applicable Conversion Date by delivering
written notice to that effect to the Holder on or prior to such Conversion Date;
provided, however, that notwithstanding the foregoing to the extent that any
prior conversions by the Holder prevented GAMCO from converting the full Maximum
Conversion Amount with respect to any Six Month Period and GAMCO caused the
5
conversion of all of the Unpaid Principal Amount that it was permitted to
convert with respect to such Six Month Period, then to such extent such prior
conversions by the Holder shall not be taken into account in calculating the
Unpaid Principal Amount that GAMCO is entitled to convert in any subsequent Six
Month Period pursuant to the foregoing provisions. After any conversion pursuant
to the foregoing, the Holder shall have the right and option (the "Share Put
Option"), but not the obligation, exercisable by delivering a written notice
(the "Share Put Notice") to GAMCO no later than the tenth day after the
Conversion Date, to cause GAMCO to purchase up to 50% of the Conversion Shares
issued in such conversion (the "Forced Conversion Shares") for a purchase price
per share in cash equal to the average of the Closing Prices for the five
Trading Days immediately following the date on which the Share Put Notice is
delivered to GAMCO (the "Share Put Consideration"). The closing of any Share Put
Option will be held at 10:00 A.M. at the principal executive offices of the
Holder on the ninth Trading Day immediately following the date on which the
Share Put Notice is delivered to GAMCO, or at such other time and place upon
which the Holder and GAMCO shall agree. At such closing, GAMCO shall pay the
Share Put Consideration to the Holder in cash by wire transfer of immediately
available funds against the delivery to GAMCO of a certificate representing the
Forced Conversion Shares with respect to which the Share Put Option has been
exercised, duly endorsed to GAMCO or in blank, and concurrently with such
delivery GAMCO shall, or shall cause the applicable transfer agent for such
shares to, duly execute and deliver to the Holder a new share certificate
representing the number of Forced Conversion Shares with respect to which the
Share Put Option has not been exercised.
The "Maximum Conversion Amount" means, with respect to any Six
Month Period, (i) $25 million, if the Closing Price during each of the 20
consecutive Trading Days during the first Qualified Trading Period in such Six
Month Period with respect to which GAMCO has effected a conversion pursuant to
the foregoing provisions (the "Qualified Trading Price") is at least 125% but
less than 150% of the Conversion Price, (ii) $50 million, if the Qualified
Trading Price is at least 150% but less than 175% of the Conversion Price, (iii)
$75 million, if the Qualified Trading Price is at least 175% but less than 200%
of the Conversion Price, or (iv) $100 million, if the Qualified Trading Price is
at least 200% of the Conversion Price.
Except as otherwise provided above, any conversion pursuant to
the foregoing clauses (each, a "Forced Conversion") shall be made in accordance
with the provisions of Exhibit A. If GAMCO effects a Forced Conversion, then on
such Conversion Date the Holder shall surrender the Note at the principal
executive offices of GAMCO (which, if GAMCO shall so require, shall be duly
endorsed to GAMCO or in blank, or be accompanied by proper instruments of
transfer to GAMCO or in blank), accompanied by irrevocable written notice to
GAMCO specifying the name or names (with address or addresses) in which a
certificate or certificates evidencing the full number of shares of Common Stock
issuable upon such conversion are to be issued and GAMCO shall deliver such
certificate or certificates registered in the name(s) and in the denominations
set forth in such instructions, together with a cash adjustment in respect of
any fraction of a share of Common Stock and, if less than all of the Unpaid
Principal Amount is being converted, a new Note of like tenor with an Unpaid
Principal Amount equal to the portion not being converted. Any such conversion
shall be deemed to have been made as of the applicable Conversion Date, and the
person or persons entitled to receive the Common Stock deliverable upon
conversion of this Note shall be treated for all purposes as the record holder
or holders of such Common Stock on such date.
6
Put Option
----------
The Holder shall have the right and option, but not the
obligation, to cause GAMCO to purchase all or any portion of the Unpaid
Principal Amount of this Note (the "Put Option") on December 17, 2007 (the
"Exercise Date") for a purchase price in cash equal to 100% of the principal
amount of the Note to be purchased plus accrued and unpaid interest thereon to
but excluding the Exercise Date (the "Put Consideration"). The Put Consideration
shall be payable to the Holder by wire transfer of immediately available funds
on the Exercise Date against the delivery to GAMCO of this Note duly endorsed to
it or in blank; provided, however, that if only a portion of the principal
amount of this Note is being purchased, then concurrently with such delivery
GAMCO shall duly execute and deliver to the Holder a new Note of the same tenor
as this Note but with a principal amount equal to the principal amount of this
Note not being purchased. In order to exercise the Put Option, the Holder must
deliver a written notice of its election to exercise to GAMCO at least 30 days
prior to the Exercise Date. The closing of any exercise of the Put Option will
be held at 10:00 A.M. at the principal executive offices of the Holder on the
Exercise Date, or at such other time and place upon which the Holder and GAMCO
shall agree.
Change of Control Put Option
----------------------------
If a Change of Control or a Key Executive Change occurs at any
time, the Holder shall have the right and option, but not the obligation, to
cause GAMCO to purchase on the Change of Control Exercise Date (as defined
below) all or any portion of the Unpaid Principal Amount of this Note (the
"Change of Control Put Option") for a purchase price in cash equal to 101% of
the principal amount of the Note to be purchased plus accrued and unpaid
interest thereon to but excluding the Change of Control Exercise Date (the
"Change of Control Put Consideration"). The Put Consideration shall be payable
to the Holder by wire transfer of immediately available funds on the Change of
Control Exercise Date against the delivery to GAMCO of this Note duly endorsed
to it or in blank; provided, however, that if only a portion of the principal
amount of this Note is being purchased, then concurrently with such delivery
GAMCO shall duly execute and deliver to the Holder a new Note of the same tenor
as this Note but with a principal amount equal to the principal amount of this
Note not being purchased. GAMCO shall give the Holder prompt written notice if a
Change of Control or a Key Executive Change occurs (a "Notice"). In order to
exercise the Change of Control Put Option with respect to any Change of Control
or Key Executive Change, the Holder must deliver a written notice of its
election to exercise to GAMCO within 30 days after it has received the Notice
relating thereto and the closing of any exercise of the Change of Control Put
Option will be held at 10:00 A.M. at the principal executive offices of the
Holder on the 30th day after GAMCO receives such written notice, or at such
other time and place upon which the Holder and GAMCO shall agree (the "Change of
Control Exercise Date").
7
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or more related transactions, of
all or substantially all of the properties and assets of GAMCO and its
Subsidiaries, taken as a whole, to any Person or group (as such term is defined
for purposes of Rule 13d-5 under the 1934 Act or any successor rule), (ii) the
adoption of a plan relating to the liquidation or dissolution of GAMCO, (iii)
the consummation of any transaction or other event (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and the Gabelli
Entities (considered as a single Person solely for this purpose), becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the 1934 Act), directly or indirectly, of more than 40% of the total voting
power of all the then outstanding shares of Voting Stock of GAMCO or any Person
with which GAMCO consolidates or into which GAMCO merges, and more of the total
voting power of all such shares than is beneficially owned at such time by ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and the Gabelli Entities (considered as a single Person solely for
this purpose), or (iv) the first day on which a majority of the members of the
Board of Directors of GAMCO are not Continuing Directors.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of GAMCO who (i) was a member of such Board
of Directors on the Issue Date or (ii) was nominated for election or elected to
such Board of Directors with the approval, recommendation or endorsement of a
majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election.
"Key Executive Change" shall be deemed to have occurred at any
time that (for any reason) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ceases to provide the predominant
executive leadership to GAMCO and its Subsidiaries, taken as a whole.
Information Obligations
-----------------------
GAMCO will deliver to the Holder (without duplication):
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of GAMCO, a consolidated balance
sheet of GAMCO and its Subsidiaries as of the end of such
fiscal year and the related statements of operations and
cash flow for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal
year, and accompanied by a report thereon of an independent
public accountant of nationally recognized standing;
8
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal
year of GAMCO, a consolidated balance sheet of GAMCO and its
Subsidiaries as of the end of such quarter and the related
statements of operations and cash flow for such quarter and
for the portion of GAMCO's fiscal year then ended, setting
forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of
GAMCO's previous fiscal year, all certified (subject to
normal year-end adjustments) as to fairness of presentation,
consistency and, except for the absence of footnotes,
generally accepted accounting principles by the chief
financial officer or the chief accounting officer of GAMCO;
(c) promptly upon the furnishing thereof to the security holders
of GAMCO or any of its Subsidiaries generally, copies of all
financial statements, reports, proxy statements and any
other information or reports so furnished;
(d) as soon as available, all filings of GAMCO pursuant to the
1933 Act and the 1934 Act (other than Schedules 13D and 13G,
Forms 13F and Forms 3, 4 and 5), if any, with the Securities
and Exchange Commission; and
(e) within five days after any officer of GAMCO obtains
knowledge of any Event of Default or any event which, with
notice or lapse of time or both, would constitute an Event
of Default (a "Default"), if such Event of Default or
Default is then continuing, a certificate of the chief
financial officer or the chief accounting officer of GAMCO
setting forth the details thereof and the action which GAMCO
is taking or proposes to take with respect thereto.
Notwithstanding the foregoing, if GAMCO is then subject to the reporting
requirements under Section 13 or 15(d) of the 1934 Act or any successor statute,
(i) the delivery to the Holder of GAMCO's Annual Report on Form 10-K or any
successor form for the relevant fiscal year within the time periods provided for
in clause (a) shall satisfy the requirements of such clause and (ii) the
delivery to the Holder of GAMCO's Quarterly Report on Form 10-Q or any successor
form for the relevant fiscal quarter within the time periods provided for in
clause (b) shall satisfy the requirements of such clause.
Consolidation, Merger and Sale of Assets
----------------------------------------
GAMCO will not consolidate or merge with or into (whether or
not GAMCO is the surviving corporation), or directly and/or indirectly through
its Subsidiaries sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the properties and assets of GAMCO and its
Subsidiaries taken as a whole in one or more related transactions, to any other
Person unless:
(a) the Person formed by or surviving any such consolidation or
merger (if other than GAMCO) or to which such sale,
assignment, transfer, lease, conveyance or other disposition
shall have been made (the "Successor Company") is a
corporation, partnership, limited liability company or other
similar business entity organized and validly existing under
the laws of the United States, any state thereof or the
District of Columbia;
9
(b) the Successor Company assumes all the obligations of GAMCO
under the Notes and the Purchase Agreement pursuant an
agreement in form and substance reasonably satisfactory to
the Holder; and
(c) immediately after such transaction no Event of Default or
event which, with notice or lapse of time or both, would
constitute an Event of Default exists.
Upon any consolidation of GAMCO with, or merger of GAMCO into, any other Person
or any transfer, conveyance, sale, lease or other disposition of all or
substantially all of the properties and assets of GAMCO and its Subsidiaries
taken as a whole in one or more related transactions in accordance with this
paragraph, the Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, GAMCO under this Note and the Purchase
Agreement with the same effect as if such Successor Company had been named as
GAMCO herein, and thereafter, except in the case of a lease, GAMCO shall be
relieved of all obligations and covenants under this Note and the Purchase
Agreement.
Transfer and Related Provisions
-------------------------------
The Holder shall not offer, sell, contract to sell or
otherwise dispose of this Note without the prior written consent of GAMCO;
provided, however, that the Holder shall be permitted to transfer the Note (i)
to any of its Affiliates and (ii) to any other Person (A) in connection with a
transfer of substantially all of the investments of the original Holder, (B) if
the Holder is legally precluded from holding this Note and (C) during the
continuance of an Event of Default, provided, that such transferee agrees to be
bound by the terms contained herein.
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any specified Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.
GAMCO shall keep at its principal office a register (the
"Register") in which shall be entered the name and address of the registered
holder of this Note and particulars of this Note and of all permitted transfers
of this Note. Upon surrender for registration of a permitted transfer of this
Note to GAMCO, GAMCO shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Notes, of any denominations of
$1,000,000 and multiples thereof and like aggregate principal amount.
Notwithstanding the foregoing, GAMCO shall not be required to register the
transfer of or exchange this Note unless it has been duly endorsed. All Notes
issued upon any registration of transfer or exchange of this Note shall be the
valid obligations of GAMCO, evidencing the same debt, and entitled to the same
benefits, as this Note.
10
No service charge shall be made for any registration of
transfer or exchange of this Note, but GAMCO may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
Prior to due presentment of this Note for registration of a
permitted transfer, GAMCO and its agents may treat the Person in whose name it
is registered as the owner of this Note for all purposes whatsoever, whether or
not it is overdue and neither GAMCO nor any of its agents shall be affected by
notice to the contrary.
Replacement of Note
-------------------
If this Note has been mutilated and is surrendered to GAMCO,
GAMCO shall execute and deliver in exchange a new Note of the same principal
amount and bearing a number not then outstanding. If the Holder shall deliver to
GAMCO (i) evidence reasonably satisfactory to GAMCO that this Note has been
destroyed, lost or stolen and (ii) such security or indemnity as may be required
by GAMCO to hold it and its agents harmless, then, in the absence of notice that
this Note has been acquired by a bona fide purchaser, GAMCO shall execute and
deliver, in lieu of this Note, a new Note of a like principal amount and bearing
a number not then outstanding. The provisions of this paragraph are exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.
Miscellaneous
-------------
GAMCO waives presentment for payment, demand, notice of
nonpayment, notice of protest and protest of this Note, and all notices in
connection with the delivery, acceptance, or dishonor of this Note.
GAMCO agrees that (a) if for any reason any amount due
hereunder is paid by cashier's, certified teller's check or other check, there
shall be no discharge of GAMCO's obligation until said check be finally paid by
the issuer thereof; and (b) the provisions of RCW 62A.3-311 shall not entitle
GAMCO to any accord and satisfaction of any now or hereafter existing claim in
dispute between the Holder and GAMCO (or any of their respective successors and
assigns), all of which provisions and rights are hereby waived.
The Holder shall not by any act or omission be deemed to waive
any of its rights or remedies under this Note or the Purchase Agreement unless
such waiver shall be in writing and signed by the Holder, and then only to the
extent specifically set forth therein.
No right or remedy herein conferred upon or reserved to the
Holder is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
11
This Note may not be amended other than with the written
consent of the Holder and GAMCO.
Upon demand therefor, GAMCO agrees to pay to the Holder all
costs and fees arising out of enforcing this Note, whether incurred in any court
action, arbitration, or mediation, on appeal, in any bankruptcy (or state
receivership or other insolvency or similar proceedings or circumstances), in
any forfeiture, and for any post-judgment collection services (collectively,
"Enforcement Costs").
GAMCO and, by its acceptance of this Note, the Holder agree
that, subject to the specific terms hereof and to the extent that Washington law
applies, the provisions of Article 3 of the Uniform Commercial Code of
Washington pertaining to instruments shall be applied to this Note, even if this
Note is not deemed to be an "instrument" or a "negotiable instrument"
thereunder.
If this Note will at any time become subject to the Trust
Indenture Act of 1939, GAMCO will make appropriate revisions hereto and will
enter into an indenture with an appropriate trustee so as to comply fully with
such act.
Except as noted below, this Note shall be governed by and
construed in accordance with the laws of the State of Washington. In any court
proceeding, GAMCO agrees to submit to the jurisdiction of the federal court
selected by the Holder, and venue of any action concerning this Note shall be in
King County, Washington state. In the event that the federal court selected by
the Holder shall not have jurisdiction, ▇▇▇▇▇ agrees to submit to the
jurisdiction of the Washington state court in King County selected by the
Holder. GAMCO hereby irrevocably waives to the fullest extent permitted by law
any objection which it may now or hereafter have to the laying of such venue and
any claim that any such forum is an inconvenient forum. Nothing in this Section
shall impair the right of the Holder to bring any action or proceeding against
GAMCO or its property in the courts of any other county or jurisdiction and
GAMCO irrevocably submits to the nonexclusive jurisdiction of the appropriate
courts (as selected by the Holder) of the jurisdiction in which GAMCO is
organized or any place where any property or any office of GAMCO is located. In
the event Holder transfers or assigns this Note to a person not one of its
Affiliates, then this Note shall be governed by and construed in accordance with
the laws of the State of New York and the consent to jurisdiction in the State
of Washington stated above is hereby revoked.
12
NOTICE: ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT,
OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned
has duly executed and delivered this Note as of the date first written above.
GAMCO INVESTORS, INC.
a New York corporation previously
known as Gabelli Asset Management
Inc.
By:
-------------------------------------------------
Its:
------------------------------------------------
13
Exhibit A
---------
Conversion Rights
-----------------
1. Right of Conversion. At the option of the Holder, this Note or any
portion of the principal amount hereof which is $1,000,000 or an integral
multiple thereof, may be converted at the principal amount hereof, or such
portion hereof, into fully paid and nonassessable shares of the Common Stock
(calculated as to each conversion to the nearest 1/100 of a share of Common
Stock) at the Conversion Price (as hereinafter defined) in effect at the time of
conversion, or into such additional or other securities, cash or property and at
such other rates as required in accordance with the provisions set forth herein.
Such conversion right shall expire at the close of business on August 14, 2011.
If this Note is redeemed in accordance with its terms, then such conversion
right shall expire at the close of business on the Redemption Date unless GAMCO
fails to take any of the Required Actions on or prior to the Redemption Date.
2. Conversion Procedures. In order to exercise the conversion right,
the Holder shall surrender this Note at the principal executive offices of GAMCO
(which, if GAMCO shall so require, shall be duly endorsed to GAMCO or in blank,
or be accompanied by proper instruments of transfer to GAMCO or in blank),
accompanied by irrevocable written notice to GAMCO to the effect that the Holder
elects so to convert this Note or, if less than the entire principal amount
hereof is to be converted, the portion hereof to be converted (which notice
shall specify the name or names (with address or addresses) in which a
certificate or certificates evidencing the shares of Common Stock to be issued
upon such conversion are to be issued). Except as otherwise expressly set forth
herein, no payment or adjustment shall be made upon any conversion of the Note
on account of any interest accrued on this Note or on account of any dividends
accrued on the shares of Common Stock issued upon such conversion.
GAMCO shall, as soon as practicable after the surrender of
this Note at the office referred to above and compliance with the other
conditions herein contained, deliver at such office, to the person or persons
entitled thereto (as specified in the applicable written notice of conversion),
a certificate or certificates evidencing the number of full shares of Common
Stock to which such person or persons shall be entitled as aforesaid, together
with a cash adjustment in respect of any fraction of a share of Common Stock as
hereinafter provided. Such conversion shall be deemed to have been made as of
the date of such surrender of this Note (or, if later, the date of compliance
with such other conditions), and the person or persons entitled to receive the
Common Stock deliverable upon conversion of this Note shall be treated for all
purposes as the record holder or holders of such Common Stock on such date.
If this Note is to be converted in part only, upon such
conversion GAMCO shall execute deliver to the Holder, at the expense of GAMCO, a
new Note or Notes of like tenor in denominations of $1,000,000 and any integral
multiple thereof and with an aggregate principal amount equal to the unconverted
portion of the principal amount of this Note.
14
3. No Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of this Note. Instead of any fractional share of Common
Stock that would otherwise be issuable to the Holder upon conversion of this
Note (or any specified portion hereof), GAMCO shall pay a cash adjustment in
respect of such fractional share in an amount equal to the same fraction of the
Closing Price (as hereinafter defined) on the day of conversion.
4. Reservation of Shares; Etc. GAMCO shall at all times reserve and
keep available, free from preemptive rights out of its authorized but unissued
Common Stock, solely for the purpose of effecting the conversion of this Note,
the full number of shares of Common Stock that would then be deliverable upon
the conversion of all of the principal amount of this Note and any other
outstanding Notes.
If any shares of Common Stock required to be reserved for
purposes of conversion of this Note require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
issued or freely transferred upon conversion, GAMCO will in good faith and as
expeditiously as possible endeavor to cause such shares to be duly registered or
approved as the case may be. If the Common Stock is quoted on the New York Stock
Exchange or any other U.S. national securities exchange, GAMCO will, if
permitted by the rules of such exchange, list and keep listed on such exchange,
upon official notice of issuance, all shares of Common Stock issuable upon
conversion of this Note and any other outstanding Notes. Notwithstanding the
foregoing, the reference to free transferability in the first sentence of this
paragraph and the reference to listing in the second sentence of this paragraph
shall apply only when this Note shall have become freely transferable under the
federal securities laws.
5. Prior Notice of Certain Events. If GAMCO shall authorize any
transaction that would require an adjustment to the Conversion Price (other than
a transaction referred to in clauses (a) or (c) of Section 6 below) or there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
GAMCO, then GAMCO shall notify the Holder, at least 20 days (or, in the case of
a transaction referred to in clauses (b), (d) or (e) of Section 6 below, 10
days) prior to the applicable record, expiration or consummation date
hereinafter specified, a notice stating (i) the record date fixed for the
determination of holders of Common Stock entitled to the applicable issuance,
dividend or distribution or (ii) the date of expiration of the applicable tender
or exchange offer, as the case may be.
6. Adjustment of Conversion Price.
(a) In case GAMCO shall pay or make a dividend or other distribution on
any class of Capital Stock of GAMCO payable in Common Stock, the Conversion
Price in effect at the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such Conversion Price by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day following
the date fixed for such determination. (For the purposes of determining
adjustments to the Conversion Price as set forth herein, shares of Common Stock
held in the treasury of GAMCO, and distributions or issuances in respect
thereof, shall be disregarded.)
15
(b) In case GAMCO shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them, for a period of
not more than 45 days, to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price (as hereinafter defined) on
the date fixed for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price in effect at the opening of business on
the day following the date fixed for termination of such subscription or
purchase period shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock actually purchased upon
exercise of such rights or warrants would have purchased at such Current Market
Price and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock actually purchased upon exercise of
such rights or warrants, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
termination.
(c) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case GAMCO shall, by dividend or otherwise, distribute to all or
substantially all holders of its Common Stock evidences of indebtedness, shares
of capital stock of any class or series, other securities, cash or assets (other
than Stapled Securities (as hereinafter defined), Common Stock, rights or
warrants referred to in clause (b) of this Section 6 or a dividend or
distribution payable exclusively in cash), the Conversion Price in effect
immediately prior to the close of business on the date fixed for the payment of
such distribution shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the Current Market Price on the date
fixed for such payment less the then fair market value (as determined in good
faith by the Board of Directors of GAMCO (the "Board of Directors"), whose good
faith determination shall be conclusive and described in a resolution of the
Board of Directors) of the portion of such evidences of indebtedness, shares of
capital stock, other securities, cash and assets distributed per share of Common
Stock and the denominator shall be such Current Market Price, such reduction to
become effective immediately prior to the opening of business on the day
following the date fixed for such payment. If the Board of Directors determines
the fair market value of any distribution for purposes of this paragraph by
reference to the actual or when-issued trading market for any securities
comprising such distribution, in doing so it must consider the prices in such
market over the same period used in computing the Current Market Price for such
purposes.
16
(e) In case GAMCO shall, by dividend or otherwise, make a distribution
to all or substantially all holders of its Common Stock payable exclusively in
cash in an aggregate amount that, when combined with the aggregate amount paid
in respect of all other distributions to all or substantially all holders of its
Common Stock paid exclusively in cash within the 12 months preceding the date
fixed for the payment of such distribution to the extent such amount has not
already been applied in a prior adjustment pursuant to this paragraph, exceeds
10% of the product of the Current Market Price on the date fixed for such
payment times the number of shares of Common Stock on which such distribution is
paid, the Conversion Price in effect immediately prior to the close of business
on the date fixed for such payment shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the Current
Market Price on the date fixed for such payment less the Per Share Distribution
Amount (as hereinafter defined) paid in such distribution and the denominator
shall be such Current Market Price, such reduction to become effective
immediately prior to the opening of business on the day following the date fixed
for such payment.
(f) In case GAMCO or any of its Subsidiaries shall consummate a tender
or exchange offer for all or any portion of the Common Stock, the Conversion
Price in effect immediately prior to the close of business on the date of
expiration of such tender or exchange offer shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the Current
Market Price on such date of expiration less the Per Share Premium Amount (as
hereinafter defined) paid in such tender or exchange offer and the denominator
shall be such Current Market Price, such reduction to become effective
immediately prior to the opening of business on the day following such date of
expiration.
(g) In case GAMCO shall, by dividend or otherwise, make a distribution
referred to in paragraph (d) or (e) above, the Holder converting this Note (or
any portion of the principal amount hereof) subsequent to the close of business
on the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution shall also be entitled to receive, for each
share of Common Stock into which this Note (or portion of the principal amount
being converted), the portion of the evidences of indebtedness, shares of
capital stock, other securities, cash and assets so distributed applicable to
one share of Common Stock; provided, however, that, at the election of GAMCO
(whose election shall be evidenced by a resolution of the Board of Directors)
with respect to all holders so converting, GAMCO may, in lieu of distributing to
such holder any portion or all of such evidences of indebtedness, shares of
capital stock, other securities, cash and assets to which such holder is
entitled as set forth above, (i) pay such holder an amount in cash equal to the
fair market value thereof (as determined in good faith by the Board of
Directors, whose good faith determination shall be conclusive and described in a
resolution of the Board of Directors) or (ii) distribute to such holder a due
bill therefor, provided that such due bill (A) meets any applicable requirements
of the principal national securities exchange or other market on which the
Common Stock is then traded and (B) requires payment or delivery of such
evidences of indebtedness, shares of capital stock, other securities, cash or
assets no later than the date of payment thereof to holders of shares of Common
Stock receiving such distribution.
17
(h) GAMCO may make such reductions in the Conversion Price, in addition
to those required by the foregoing paragraphs, as it considers to be advisable
to avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes. In addition, GAMCO from time to time may reduce the Conversion Price
by any amount for any period of time if the period is at least twenty days, the
reduction is irrevocable during the period, and the Board of Directors of GAMCO
shall have made a determination that such reduction would be in the best
interest of GAMCO, which determination shall be conclusive. Whenever the
Conversion Price is reduced pursuant to the preceding sentence, GAMCO shall
provide written notice to the Holder of this Note and the holders of any other
outstanding Notes of the reduction at least fifteen days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period it will be in effect.
(i) GAMCO may not engage in any transaction if, as a result thereof,
the Conversion Price would be reduced to below the par value per share of the
Common Stock.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this paragraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment.
(k) Whenever the Conversion Price is adjusted as herein provided, GAMCO
shall compute the adjusted Conversion Price and shall prepare a certificate
signed by the Treasurer of GAMCO setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based, and
such certificate shall be given by GAMCO to the Holder of this Note and the
holders of any other outstanding Notes.
7. Stapled Securities.
(a) Prior to a Separation Event (as hereinafter defined) with respect
to any Stapled Securities, such Stapled Securities will be deemed, for purposes
of the adjustments contemplated hereby, to comprise part of the shares of Common
Stock to which such Stapled Securities appertain, and as a result, distributions
in respect of such Stapled Securities will be deemed, for such purposes, to be
distributions in respect of such shares.
(b) If the Holder converts this Note (or any portion of the principal
amount hereof) after a Separation Event with respect to any Stapled Securities,
it shall be entitled to receive upon such conversion, in addition to the shares
of Common Stock issuable upon such conversion, the same rights to which the
Holder would have been entitled under the Stapled Securities that would have
appertained to such shares of Common Stock if the Holder had effected such
conversion before such Separation Event.
18
8. Consolidations, Mergers or Sales of Assets. In the event of any
consolidation of GAMCO with, or merger of GAMCO into, any other Person, any
merger of another Person into GAMCO (other than a merger which does not result
in any reclassification, conversion, exchange or cancellation of outstanding
shares of the Common Stock) or any sale or transfer of all or substantially all
of the assets GAMCO, the Person formed by such consolidation or resulting from
such merger or which acquires such assets, as the case may be, shall enter into
a written agreement with the Holder, in form and substance reasonably acceptable
to the Holder, providing that the Holder shall have the right thereafter, during
the period in which this Note shall be convertible, to convert this Note (or
portion of the principal amount hereof) only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer by a holder of the number of shares of Common Stock into which
this Note (or portion thereof) might have been converted immediately prior to
such consolidation, merger, sale or transfer, assuming the Holder (i) is not a
Person with which GAMCO consolidated or into which GAMCO merged or which merged
into GAMCO or to which such sale or transfer was made, as the case may be, (a
"Constituent Person") or an Affiliate of a Constituent Person and (ii) failed to
exercise his or her rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer; provided, however, that if the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer is not the same for each share of Common Stock held immediately prior
to such consolidation, merger, sale or transfer by Persons other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised (each, a "Non-Electing Share"), then
for purposes of this Section 8 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares. Such written agreement shall
provide for adjustments which, for events subsequent to the effective date of
such agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Exhibit A. The provisions of this Section 8
shall similarly apply to successive consolidations, mergers, sales or transfers.
If the conversion rights of the Holder of this Note shall be adjusted pursuant
to this Section 8, then GAMCO shall cause to be given to the Holder and any
other holders of outstanding Notes, within 5 days after consummation of the
transaction triggering such adjustment, a notice describing such adjustment in
appropriate detail.
9. Taxes. GAMCO shall pay any and all stock transfer, documentary stamp
and other taxes that may be payable in respect of any issuance or delivery of
shares of Common Stock or other securities issued or delivered on conversion of
this Note. GAMCO shall not, however, be required to pay any such tax which may
be payable in respect of any transfer involved in the issuance or delivery of
shares of Common Stock or other securities in a name other than to the Holder,
and shall not be required to make any such issuance or delivery unless and until
the person otherwise entitled to such issuance or delivery has paid to GAMCO the
amount of any such tax or has established, to the satisfaction of GAMCO, that
such tax has been paid or is not payable.
19
10. Certain Definitions. The following definitions shall apply to terms
used in this Exhibit A:
"Closing Price" of any common stock on any day means the last
reported per share sale price, regular way, of the common stock on such day, or,
in case no such sale takes place on such day, the average of the reported
closing per share bid and asked prices, regular way, of the common stock on such
day, in each case on the New York Stock Exchange or, if the common stock is not
listed or admitted to trading on the New York Stock Exchange, on the principal
national securities exchange or quotation system on which the common stock is
listed or admitted to trading or quoted, or, if the common stock is not listed
or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing per share bid and asked prices of
the common stock on such day in the over-the-counter market as reported by a
generally accepted national quotation service or, if not so available in such
manner, as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors of GAMCO for that purpose or, if not so
available in such manner, as otherwise determined in good faith by the Board of
Directors (whose good faith determination shall be conclusive and described in a
resolution of the Board of Directors).
"Common Stock" shall mean the Class A Common Stock, par value
$0.001 per share, of GAMCO or, subject to Section 8, any shares of any class or
classes resulting from any reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of GAMCO and
which are not subject to redemption by GAMCO; provided, however, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from such reclassification bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Conversion Price" initially means $53.00, subject to
adjustment from time to time as set forth herein; provided, however, that
without limiting the foregoing the Conversion Price shall decrease by $1.00
during the period from and including August 14, 2003 to but excluding September
15, 2006.
"Current Market Price" on any date in question means, with
respect to any adjustment in conversion rights as set forth herein, the average
of the daily Closing Prices for the Common Stock for the five consecutive
Trading Days selected by the Board of Directors commencing not more than 20
Trading Days before, and ending not later than, the earlier of the date in
question and the day before the Ex Date with respect to the transaction
requiring such adjustment; provided, however, that (i) if any other transaction
occurs requiring a prior adjustment to the Conversion Price and the Ex Date for
such other transaction falls after the first of the five consecutive Trading
Days so selected by the Board of Directors, the Closing Price for each such
Trading Day falling prior to the Ex Date for such other transaction shall be
adjusted by multiplying such Closing Price by the same fraction by which the
Conversion Price is so required to be adjusted as a result of such other
transaction and (ii) if any other transaction occurs requiring a subsequent
adjustment to the Conversion Price and the Ex Date for such other transaction
falls on or before the last of the five consecutive Trading Days so selected by
the Board of Directors, the Closing Price for each such Trading Day falling on
or after the Ex Date for such other transaction shall be adjusted by dividing
such Closing Price by the same fraction by which the Conversion Price is so
required to be adjusted as a result of such other transaction.
20
"Ex Date" means (i) when used with respect to any dividend,
distribution or issuance, the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant market from which the
Closing Price is obtained without the right to receive such dividend,
distribution or issuance, (ii) when used with respect to any subdivision or
combination of shares of Common Stock, the first date on which the Common Stock
trades regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective, (iii) when used with respect
to any tender or exchange offer, the first date on which the Common Stock trades
regular way on such exchange or in such market after such tender or exchange
offer expires and (iv) when used with respect to any other transaction, the date
of consummation of such transaction.
"Per Share Distribution Amount" means, with respect to any
distribution, (i) the cash paid in such distribution divided by (ii) the number
of shares of Common Stock on which such distribution is paid.
"Per Share Premium Amount" means, with respect to any tender
or exchange offer, (i) the Premium Amount paid as part of such tender or
exchange offer divided by (ii) the Post-Tender Offer Number of Common Shares.
"Post-Tender Offer Number of Common Shares" means, with
respect to any tender or exchange offer, the number of shares of Common Stock
outstanding at the close of business on the date of expiration of such tender or
exchange offer (before giving effect to the acquisition of shares of Common
Stock pursuant thereto) minus the number of shares of Common Stock acquired
pursuant thereto.
"Premium Amount" means, with respect to any tender or exchange
offer, (i) the Tender Consideration paid in such tender or exchange offer minus
(ii) the product of the Current Market Price on the date of expiration of such
tender or exchange offer and the number of shares of Common Stock acquired
pursuant to such tender or exchange offer.
"Separation Event" has the meaning set forth in the definition
of the term "Stapled Securities" below.
"Stapled Securities" means securities issued under any plan or
agreement providing in substance that, until such securities are redeemed or the
rights thereunder are otherwise terminated or a specified event occurs (a
"Separation Event"), (i) a specified number of such securities will appertain to
each share of Common Stock then issued or to be issued in the future (including
shares issued upon conversion of this Note) and (ii) each such security will be
evidenced or represented by the certificate representing the share of Common
Stock to which it appertains and will automatically trade with such share.
21
"Tender Consideration" means, with respect to any tender or
exchange offer, the aggregate of the cash plus the fair market value (as
determined in good faith by the Board of Directors, whose good faith
determination shall be conclusive and described in a resolution of the Board of
Directors) of all non-cash consideration paid in respect of such tender or
exchange offer.
"Trading Day" means a day on which securities are traded on
the national securities exchange or quotation system or in the over-the-counter
market used to determine Closing Prices for the Common Stock.
22