Exhibit 1.2
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 GABELLI ASSET MANAGEMENT INC. HAS RECEIVED AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO GABELLI ASSET MANAGEMENT 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
$100,000,000.00 Dated: August 14, 2001
Rye, New York
FOR VALUE RECEIVED, the undersigned, Gabelli Asset
Management Inc., a New York corporation. ("Gabelli"), promises to pay to
the order of CASCADE INVESTMENT LLC, 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 ONE HUNDRED MILLION and NO/100 DOLLARS
($100,000,000) minus the principal amount converted or sold 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 and (ii)
6.0% per annum for the period from and including August 14, 2002 to but
excluding 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") is issued by
Gabelli pursuant to that certain Note Purchase Agreement, dated as of
August 10, 2001 (the "Purchase Agreement"), among Gabelli, 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
Xxxxxxx 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 Gabelli. Accordingly, Xxxxxxx
acknowledges and agrees that 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.
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. Gabelli 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 Gabelli 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. Gabelli 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. Gabelli 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 Gabelli 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
(f) Breach of Other Covenants or Failure of any Condition.
Gabelli 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 Gabelli by the Holder;
provided, however, that if any such failure is not
susceptible to cure within 30 days and Gabelli commences
to cure such failure within said 30-day period, then no
Event of Default shall be deemed to have occurred if
Gabelli 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). Gabelli or any of its
Subsidiaries that are at the time significant
subsidiaries of Gabelli 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 Gabelli 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 Gabelli, any of its
Significant Subsidiaries or, prior to the expiration or
return to Gabelli of the Letter of Credit, the Letter of
Credit Issuer (if a substitute Letter of Credit is not
delivered by Xxxxxxx 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
(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 Gabelli) 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 Gabelli, 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")
Gabelli 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 Gabelli
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 Gabelli
from converting the full Maximum Conversion Amount with respect to any Six
Month Period and Gabelli caused the 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 Xxxxxxx 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 Gabelli no later than the tenth day
after the Conversion Date, to cause Gabelli 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 Gabelli (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 Gabelli, or at such other time and place upon which the Holder
and Gabelli shall agree. At such closing, Xxxxxxx shall pay the Share Put
Consideration to the Holder in cash by wire transfer of immediately
available funds against the delivery to Gabelli of a certificate
representing the Forced Conversion Shares with respect to which the Share
Put Option has been exercised, duly endorsed to Gabelli or in blank, and
concurrently with such delivery Gabelli 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 Xxxxxxx 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 Gabelli effects a
Forced Conversion, then on such Conversion Date the Holder shall surrender
the Note at the principal executive offices of Gabelli (which, if Gabelli
shall so require, shall be duly endorsed to Gabelli or in blank, or be
accompanied by proper instruments of transfer to Gabelli or in blank),
accompanied by irrevocable written notice to Gabelli 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 Gabelli 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.
Put Option
The Holder shall have the right and option, but not the
obligation, to cause Gabelli to purchase all or any portion of the Unpaid
Principal Amount of this Note (the "Put Option") on August 14, 2002 (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 Gabelli 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 Gabelli 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 Gabelli at least 30
days prior to the Exercise Date. Notwithstanding the foregoing, if the
Holder has not delivered written notice of its election to exercise the Put
Option in whole, the Holder may change the Exercise Date to August 14, 2003
by delivering a written notice of such change to Gabelli at least 30 days
prior to August 14, 2002, and from and after the delivery of such written
notice the Exercise Date shall be deemed to be August 14, 2003 for all
purposes of this Note. 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 Xxxxxxx 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 Gabelli 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 Gabelli 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 Gabelli 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. Gabelli 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 Gabelli 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 Xxxxxxx receives such written
notice, or at such other time and place upon which the Holder and Xxxxxxx
shall agree (the "Change of Control Exercise Date").
"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
Gabelli 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 Gabelli, (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 Xxxxx
X. Xxxxxxx 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 Gabelli or any Person with which Gabelli
consolidates or into which Gabelli merges, and more of the total voting
power of all such shares than is beneficially owned at such time by Xxxxx
X. Xxxxxxx 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 Gabelli are not Continuing Directors.
"Continuing Directors" means, as of any date of
determination, any member of the Board of Directors of Xxxxxxx 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) Xxxxx X. Xxxxxxx ceases to provide the
predominant executive leadership to Gabelli and its Subsidiaries, taken as
a whole.
Limitation on Funded Indebtedness
Prior to the Exercise Date, as such date may be extended,
Gabelli shall not, and shall not permit any of its consolidated
Subsidiaries, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee, otherwise become liable for, or suffer to
exist, any Funded Indebtedness (other than Indebtedness to Gabelli or one
of its wholly owned Subsidiaries and other than the Note) in excess of
$200,000,000 outstanding at any time.
"Funded Indebtedness" means, with respect to any Person
at any date of determination, any Indebtedness of such Person that by its
terms matures more than one year after the date in question or which is
renewable or extendible at the option of such Person for a period ending
one year or more after the date in question.
"Indebtedness" means, with respect to any Person at any
date of determination (without duplication):
(a) all indebtedness of such Person for borrowed money;
(b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(c) all obligations of such Person in respect of letters of
credit or other similar instruments (including
reimbursement obligations with respect thereto), but
excluding obligations with respect to the Letter of
Credit, other letters of credit securing any Indebtedness
and letters of credit entered into in the ordinary course
of business of such Person to the extent such letters of
credit are not drawn upon or, if drawn upon, to the
extent such drawing is reimbursed no later than the third
Business Day following receipt by such Person of a demand
for reimbursement);
(d) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which
purchase price is due more than one year after the date
of placing such property in service or taking delivery
and title thereto or the completion of such services,
except trade payables;
(e) all guaranties, endorsements, assumptions and other
contingent obligations in respect of, or to purchase or
otherwise acquire, Indebtedness of other Persons;
(f) all Indebtedness of other Persons secured by a Lien on
the property or assets of such Person; and
(g) all lease obligations that are required to be capitalized
on the balance sheet of such person in accordance with
GAAP.
The amount of Indebtedness of any Person as of any determination date shall
be the outstanding balance on such date in the case of unconditional
obligations and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the
obligation; provided that:
(1) the amount outstanding at any time of any Indebtedness
issued at a price less than its principal or face amount
at maturity shall be the amount of the liability in
respect thereof determined in accordance with GAAP; and
(2) the amount of Indebtedness secured by a Lien on any asset
of a Person shall be the lesser of (i) the fair market
value of such asset as of the determination date and (ii)
the amount of such Indebtedness.
Information Obligations
Gabelli 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 Gabelli, a
consolidated balance sheet of Gabelli 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;
(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 Gabelli, a consolidated balance sheet of
Gabelli 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 Gabelli's
fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding
quarter and the corresponding portion of Gabelli'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
Gabelli;
(c) promptly upon the furnishing thereof to the security
holders of Gabelli 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 Gabelli 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 Xxxxxxx 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
Gabelli setting forth the details thereof and the action
which Xxxxxxx is taking or proposes to take with respect
thereto.
Notwithstanding the foregoing, if Gabelli 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 Gabelli'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 Gabelli'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
Gabelli will not consolidate or merge with or into
(whether or not Gabelli 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 Gabelli 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 Gabelli) 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;
(b) the Successor Company assumes all the obligations of
Gabelli 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 Gabelli with, or merger of Gabelli into, any
other Person or any transfer, conveyance, sale, lease or other disposition
of all or substantially all of the properties and assets of Gabelli 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, Gabelli
under this Note and the Purchase Agreement with the same effect as if such
Successor Company had been named as Gabelli herein, and thereafter, except
in the case of a lease, Gabelli 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
Xxxxxxx; 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.
Gabelli 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 Gabelli, Xxxxxxx 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, Gabelli
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
Gabelli, evidencing the same debt, and entitled to the same benefits, as
this Note.
No service charge shall be made for any registration of
transfer or exchange of this Note, but Gabelli 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, Gabelli 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 Gabelli 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
Xxxxxxx, Xxxxxxx 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 Gabelli (i) evidence reasonably satisfactory to
Gabelli that this Note has been destroyed, lost or stolen and (ii) such
security or indemnity as may be required by Gabelli to hold it and its
agents harmless, then, in the absence of notice that this Note has been
acquired by a bona fide purchaser, Gabelli 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
Gabelli 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.
Xxxxxxx 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 Gabelli's obligation until said check be
finally paid by the issuer thereof; and (b) the provisions of RCW 62A.3-311
shall not entitle Gabelli to any accord and satisfaction of any now or
hereafter existing claim in dispute between the Holder and Xxxxxxx (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.
This Note may not be amended other than with the written
consent of the Holder and Xxxxxxx.
Upon demand therefor, Xxxxxxx 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").
Xxxxxxx 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, Xxxxxxx 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, Xxxxxxx 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, Xxxxxxx
agrees to submit to the jurisdiction of the Washington state court in King
County selected by the Holder. Gabelli 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 Gabelli or its property in
the courts of any other county or jurisdiction and Gabelli irrevocably
submits to the nonexclusive jurisdiction of the appropriate courts (as
selected by the Holder) of the jurisdiction in which Gabelli is organized
or any place where any property or any office of Gabelli 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.
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.
GABELLI ASSET MANAGEMENT INC.,
a New York Corporation
By:
---------------------------------
Its:
--------------------------------
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.
2. Conversion Procedures. In order to exercise the conversion
right, the Holder shall surrender this Note at the principal executive
offices of Gabelli (which, if Gabelli shall so require, shall be duly
endorsed to Gabelli or in blank, or be accompanied by proper instruments of
transfer to Gabelli or in blank), accompanied by irrevocable written notice
to Gabelli 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.
Gabelli 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 Gabelli shall execute deliver to the Holder, at the expense of
Xxxxxxx, 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.
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), Gabelli 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. Gabelli 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, Gabelli 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, Gabelli 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 Gabelli 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 Gabelli, then Gabelli 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 Gabelli shall pay or make a dividend or other
distribution on any class of Capital Stock of Gabelli 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 Gabelli, and distributions or issuances in respect thereof,
shall be disregarded.)
(b) In case Gabelli 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 Gabelli 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 Gabelli (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.
(e) In case Gabelli 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 Gabelli 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 Gabelli 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 Xxxxxxx
(whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all holders so converting, Gabelli 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.
(h) Gabelli 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, Xxxxxxx 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 Gabelli shall have made a
determination that such reduction would be in the best interest of Gabelli,
which determination shall be conclusive. Whenever the Conversion Price is
reduced pursuant to the preceding sentence, Gabelli 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) Gabelli 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,
Gabelli shall compute the adjusted Conversion Price and shall prepare a
certificate signed by the Treasurer of Gabelli 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 Gabelli 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.
8. Consolidations, Mergers or Sales of Assets. In the event of any
consolidation of Gabelli with, or merger of Gabelli into, any other Person,
any merger of another Person into Gabelli (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 Gabelli, 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 Gabelli consolidated or into which Gabelli merged
or which merged into Gabelli 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 Gabelli 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. Gabelli 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. Gabelli 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 Gabelli the
amount of any such tax or has established, to the satisfaction of Gabelli,
that such tax has been paid or is not payable.
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 Gabelli 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 Gabelli 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 Gabelli and which are not subject to redemption by Xxxxxxx; 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.
"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.
"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.
"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.
