Document:

ex10-1.htm

Exhibit 10.1

NOTE PURCHASE AGREEMENT

 

This NOTE PURCHASE AGREEMENT (the "Agreement") is made as of August 15, 2016, by and among Cascade Investment, L.L.C., a Washington limited liability company ("Buyer"), GAMCO  Investors, Inc., a Delaware corporation ("Seller"), Mario J. Gabelli ("Gabelli") and GGCP, Inc., a Wyoming corporation ("GGCP" and collectively with Gabelli, the "Gabelli Stockholders").

 

INTRODUCTION

 

1.           Seller desires to sell to Buyer and Buyer desires to purchase from Seller the convertible promissory note (the "Note") in the form attached as Exhibit A hereto;

 

2.           The Note is convertible into shares of Class A Common Stock, par value $0.001 per share (such shares and any other securities issued or distributed with respect to, or in exchange for, such shares pursuant to any reclassification, merger or other transaction, the "Class A Common Stock"), of the Seller on the terms and conditions set forth in the Note;

 

3.           The Gabelli Stockholders beneficially own, directly or indirectly, 4,425,055 shares of Class A Common Stock, par value $0.001 per share (“Class A Common Stock”) of the Seller, and 18,827,036 shares of Class B Common Stock, par value $0.001 per share ("Class B Common Stock"), of the Seller, representing in the aggregate approximately 95.6% of the combined voting power of the outstanding Capital Stock (as hereinafter defined) of the Seller; and

 

4.           As a condition to its agreement to purchase the Note, Buyer has required, and in consideration for the benefits to the Seller from such purchase the Gabelli Stockholders have agreed to grant to Buyer, certain rights with respect to the Conversion Shares (as hereinafter defined).

 

NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

AGREEMENT

 

	
1.

	
Purchase and Sale.

 

1.1       Purchase and Sale.  At the Closing, as defined in Section 1.3 below, Buyer shall purchase from Seller, and Seller shall issue and sell to Buyer, the Note, Buyer and Seller. shall

 

  

 

  

enter into the Registration Rights Agreement, dated as of August 15, 2016 in the form of Exhibit B hereto (the "Registration Rights Agreement") and Buyer, Seller, GGCP and JPMorgan Chase Bank, National Association shall enter into the Escrow Agreement in the form of Exhibit C hereto (the "Escrow Agreement"). The Note is convertible into shares of Class A Common Stock of the Seller (the "Conversion Shares") on the terms provided therein.

 

1.2       Purchase Price.  In consideration for the Note, Buyer shall pay to Seller, by wire transfer in immediately available funds, One Hundred and Ten Million U.S. Dollars (U.S. $110,000,000) (the "Consideration").

 

1.3       Closing.  The closing of the purchase and sale of the Note hereunder (the "Closing") shall be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York 10036 at 10:00 a.m. on August 15, 2016, or at such other time and place upon which the parties shall agree (the "Closing Date"). The Closing shall be effective upon the receipt by the parties of the agreements, documents, instruments and consideration described in Section 3.

 

	
2.

	
Representations and Warranties.

 

2.1       Seller's Representations and Warranties.  Except as disclosed in Exhibit D hereto, Seller represents and warrants to Buyer as follows:

 

2.1.1           Organization; Standing and Power.  The Seller is a corporation duly organized and validly existing under the laws of the State of New York, has all requisite power and authority to own, lease, and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which it is required to be so qualified by applicable laws. Each of the Seller's Subsidiaries is a corporation or other business entity duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now conducted, and is duly qualified and in good standing in each jurisdiction in which it is required to be so qualified by applicable laws.

 

"Subsidiary" means (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by the Seller or one or more of the other Subsidiaries (or a combination thereof) and (ii) any partnership (A) the sole general partner or the managing general partner of which is the Seller or a Subsidiary or (B) the only general partners of which are the Seller or one or more Subsidiaries (or any combination thereof).

 

"Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other

 

  

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equivalents (however designated) of corporate stock, (iii) in the case of a partnership, partnership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

"Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or agency or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).

 

2.1.2       Capital Structure; Ownership of Shares.  The authorized Capital Stock of the Seller consists of 100,000,000 shares of Class A Common Stock, of which approximately 10,554,066 shares are issued and outstanding (the "Class A Shares"), 100,000,000 shares of Class B Common Stock, of which approximately 19,093,311 shares are issued and outstanding (together with the Class A Shares, the "Shares"), and 10,000,000 shares of Preferred Stock, par value $.001 per share, none of which are issued and outstanding. All of the Shares have been duly authorized and validly issued, are fully paid and nonassessable, and were issued in compliance with applicable federal and state securities laws. The Conversion Shares have been duly authorized and reserved for issuance out of the Seller's authorized and unissued shares of Class A Common Stock and, when issued upon conversion of the Note, will be validly issued, fully paid and nonassessable. Other than as disclosed in the SEC Reports (as defined below), there are no options, warrants, calls, convertible or exchangeable securities or rights, commitments, agreements, contracts, understandings, restrictions, arrangements, or rights of any character to which the Seller or any of its Subsidiaries is a party or by which any of them or any of their assets may be bound to issue, deliver, or sell, or cause to be issued, delivered, or sold, additional shares of the Capital Stock of the Seller or any of its Subsidiaries, or obligating the Seller or any of its Subsidiaries to grant, extend, or enter into any such option, warrant, call, conversion right, commitment, agreement, restriction, or right. There are no outstanding obligations of the Seller or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Capital Stock of the Seller or any of its Subsidiaries. Other than as disclosed in the SEC Reports, there are no voting trusts or other agreements or understandings to which the Seller, any of its Subsidiaries or any of the Gabelli Stockholders is a party with respect to the holding, voting or disposing of Capital Stock of the Seller or any of its Subsidiaries. Except as described in the SEC Reports, neither the Seller nor any of its Subsidiaries has any outstanding bonds, debentures, notes or other obligations or other securities (other than the Shares) that entitle the holders thereof to vote with the stockholders of the Seller or any of its Subsidiaries on any matter or which are convertible into or exercisable for securities having such a right to vote that are not owned by the Seller or another Subsidiary. Delivery of the Conversion Shares to Buyer upon conversion of the Note will vest valid title thereto in Buyer, free and clear of all liens, encumbrances, claims, and limitations of every kind (collectively, "Liens") other than any attributable to actions or omissions by Buyer or any of its Affiliates.

 

2.1.3       Subsidiaries.  Seller's SEC Reports disclose each of its Subsidiaries required to be described in such SEC Reports. Except as otherwise disclosed in the SEC Reports, all of the issued and outstanding shares of Capital Stock of each Subsidiary have been duly

  

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authorized, are validly issued, fully paid and (except for general partner interests) nonassessable and are owned by the Seller, directly or through Subsidiaries, free and clear of all Liens.

 

2.1.4       Authority.  Seller has all requisite corporate power and authority to enter into this Agreement, the Registration Rights Agreement, the Escrow Agreement and the Note and to consummate the transactions contemplated by this Agreement, the Registration Rights Agreement, the Escrow Agreement and the Note. The execution and delivery by Seller of this Agreement, the Registration Rights Agreement, the Escrow Agreement and the Note and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate actions on the part of Seller. Each of this Agreement, the Registration Rights Agreement, the Escrow Agreement and the Note has been duly executed and delivered by Seller and each of them constitutes a valid and binding obligation of Seller enforceable in accordance with its terms, except that such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, or other similar laws relating to enforcement of creditors' rights generally and (ii) general equitable principles and (iii) with respect to the indemnification provisions of the Registration Rights Agreement, limitations under applicable federal or state securities law.

 

2.1.5       No Conflict.  The execution and delivery of this Agreement, the Registration Rights Agreement, the Escrow Agreement and the Note and the consummation of the transactions contemplated by this Agreement, the  Registration Rights Agreement, the Escrow Agreement and the Note will not violate, conflict with, or constitute a default or breach under, (i) any laws, rules or regulations of any governmental, administrative or regulatory authority (including without limitation stock or commodity exchanges, securities associations and other self-regulatory bodies (collectively, "Self-Regulatory Organizations")) (collectively, "Governmental Authorities") that are applicable to the Seller or any of its Subsidiaries (collectively, "Applicable Laws"), (ii) any provisions of the certificate of incorporation or bylaws (or comparable constituent or governing documents) of the Seller or any of its Subsidiaries, or (iii) any material agreement, contract, or instrument to which Seller or any of its Subsidiaries or any of their assets may be bound or of any judgment, order or decree of any Governmental Authority to which Seller may be bound, nor will the execution, delivery and performance of this Agreement, the Registration Rights Agreement, the Escrow Agreement or the Note by the Seller result in the creation of any Lien upon the Note or the Conversion Shares or any material asset or right of the Seller or any of its Subsidiaries, except, in the case of clause (iii), for such violations, conflicts, defaults or breaches that would not, individually or in the aggregate, have a material adverse effect on (i) the business, operations, affairs, financial condition, assets, property, results of operations or prospects of the Seller and its Subsidiaries, taken as a whole, (ii) the ability of the Seller to perform any of its material obligations under this Agreement, the Registration Rights Agreement, the Escrow Agreement or the Note or (iii) the validity or enforceability of this Agreement, the Registration Rights Agreement, the Escrow Agreement or the Note (each, a "Material Adverse Effect"). No consent, approval, authorization or order of, or filing or registration with, any Governmental Authority is required for the execution, delivery and performance of this Agreement, the Registration Rights Agreement, the Escrow Agreement and the Note by the Seller and the consummation by the Seller of the transactions contemplated hereby and thereby.

 

  

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2.1.6       Litigation.  Except as disclosed in the SEC Reports, there are no pending or, to the best of Seller's knowledge, threatened legal or governmental actions, proceedings, suits or investigations or any arbitrations or labor disputes (collectively, "Litigation") to which the Seller or any of its Subsidiaries is a party or by which any material portion of any of their assets, taken as a whole, may be bound, which Litigation, if adversely determined, would have a Material Adverse Effect.

 

2.1.7       Accuracy of Reports; Financial Statements.  All registration statements, reports or other documents required to be filed with, or furnished to, the Securities and Exchange Commission (the "SEC") by the Seller during the twelve month period preceding the date of this Agreement under the Securities Exchange Act of 1934, as amended (the "1934 Act") (to the extent so filed or furnished, collectively the "SEC Reports"), have been duly and timely filed, were in substantial compliance with the requirements of their respective forms when filed, were complete and correct in all material respects as of the dates at which the information was furnished, and contained (as of such dates) no untrue statement of a material fact or omitted to state material fact necessary in order to make the statements made therein in light of the circumstances in which made not misleading. The financial statements of the Seller included in the SEC Reports (the "Financial Statements") comply as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. The Financial Statements have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied and fairly present the consolidated financial position of the Seller and any its Subsidiaries at the dates thereof and the consolidated results of operations and consolidated cash flows of the Seller and its Subsidiaries for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments that are not material in amount or effect). Except as set forth in the SEC Reports, neither the Seller nor any of its Subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of the Seller or in the notes thereto, other than (i) liabilities and obligations in the respective amounts reflected or reserved against in the most recent consolidated balance sheet included in the Financial Statements or (ii) other liabilities and obligations incurred in the ordinary course of business since the date of the most recent consolidated balance sheet included in the Financial Statements (the "Balance Sheet Date") which, individually or in the aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect. Since the Balance Sheet Date there have been no changes in the financial condition, results of operations, business, properties or prospects of the Seller or its Subsidiaries that, individually or in the aggregate, have had, or could be reasonably expected to have, a Material Adverse Effect.

 

2.1.8       Solvency; No Default.  The Seller has sufficient funds, assets and cash flow to pay its debts and other liabilities as they become due, and does not have unreasonably small capital for the conduct of its business as currently conducted and proposed to be conducted in the future. Neither the Seller nor any of its Subsidiaries is in violation of its certificate of incorporation or bylaws (or comparable constituent or governing documents) or is in default (or, with the giving of notice, lapse of time or both, would be in default) under any material loan, agreement or other obligation, except in the case of any material loan agreement or other obligation, for such defaults which, individually or in the aggregate, would not have a Material

 

  

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Adverse Effect. Each of the Seller and each of its Subsidiaries has complied, and is in compliance, in all material respects with all Applicable Laws and has all material licenses, permits and other authorizations required to conduct its business as currently conducted ("Permits"), except where the failure to have any such Permits would not, individually or in the aggregate, have a Material Adverse Effect. All such Permits are in full force and effect and no proceeding is pending or, to the knowledge of the Seller and its Subsidiaries, threatened to revoke, modify or rescind any such Permit.

 

2.1.9        Disclosure.  No representation or warranty of the Seller contained in this Agreement, the Registration Rights Agreement and the Note or the exhibits attached hereto (when read together and taken as a whole), contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein in light of the circumstances under which they were made not misleading.

 

2.1.10       Accounting Controls.  Each Subsidiary of the Seller that is registered as a broker-dealer has adopted recordkeeping systems that comply with the requirements of Section 17 of the 1934 Act, and the rules thereunder and the rules of all Self-Regulatory Organizations having jurisdiction over such Subsidiary, and maintains its records in accordance therewith. Each of the Seller and its Subsidiaries has devised and maintained systems of internal accounting controls sufficient to provide reasonable assurances that (1) all transactions are executed in accordance with management's general or specific authorization, (2) all transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP, or any other criteria applicable to such statements, (3) access to the property and assets of the Seller and its Subsidiaries is permitted only in accordance with management's general or specific authorization and (4) the recorded amounts for items is compared with the actual levels at reasonable intervals and appropriate action is taken with respect to any differences.

 

2.1.11       Brokerage Fees.  Neither the Seller nor any of its Subsidiaries has paid, or is obligated to pay, to any Person any brokerage or finder's fees in connection with the transactions contemplated by this Agreement.

 

2.1.12       Regulatory Status.  Neither the Seller nor any of its Subsidiaries is a “bank holding company” or a direct or indirect subsidiary of a “bank holding company” as defined in the Bank Holding Company Act of 1956, as amended.

 

2.2       Gabelli Stockholders' Representations and Warranties.  Each Gabelli Stockholder, solely with respect to itself, represents and warrants to the Buyer as follows:

 

2.2.1         Authority.  Each Gabelli Stockholder (other than Gabelli) is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and

 

  

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delivery by each Gabelli Stockholder (other than Gabelli) of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate actions on the part of such Gabelli Stockholder. This Agreement has been duly executed and delivered by each Gabelli Stockholder and constitutes a valid and binding obligation of such Gabelli Stockholder enforceable in accordance with its terms, except that such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, or other similar laws relating to enforcement of creditors' rights generally, and (ii) general equitable principles.

 

2.2.2        No Conflict.  The execution and delivery of this Agreement by each Gabelli Stockholder, and the consummation of the transactions contemplated hereunder will not violate, conflict with, constitute a default or breach under, (i) any laws, rules or regulations of any Governmental Authority that are applicable to such Gabelli Stockholder, (ii) except in the case of Gabelli, any provisions of the certificate of incorporation or bylaws of such Gabelli Stockholder, or (iii) any material agreement, contract, or instrument to which such Gabelli Stockholder may be bound or of any judgment, order or decree of any Governmental Authority to which such Gabelli Stockholder may be bound, nor will the execution, delivery and performance of this Agreement result in the creation of any Lien upon any of the Shares or Conversion Shares, except, in the case of clause (iii), for such violations, conflicts, defaults or breaches that would not, individually or in the aggregate, have a material adverse effect on (i) the ability of the Seller to perform any of its material obligations under this Agreement, the Registration Rights Agreement, the Escrow Agreement or the Note or (ii) the validity or enforceability of this Agreement, the Registration Rights Agreement, the Escrow Agreement or the Note. No consent, approval, authorization or order of, or filing or registration with, any Governmental Authority is required for the execution, delivery and performance of this Agreement by any Gabelli Stockholder and the consummation of the transactions contemplated hereby.

 

2.2.3        Ownership of Securities.  Each Gabelli Stockholder is the record and/or beneficial owner, directly or indirectly, of the number of shares of Class B Common Stock and the number of shares of Class A Common Stock set forth on Schedule I to this Agreement. No Gabelli Stockholder is the record or beneficial owner of any other securities of the Seller.

 

"Beneficial Owner" and "beneficial ownership" shall have the meaning assigned to such terms in Rules 13d-3 and 13d-5 promulgated under the 1934 Act (or any successor rules).

 

2.3       Buyer's Representations and Warranties.  Buyer makes the following representations and warranties.

 

2.3.1        Investment Purpose.  The Buyer is purchasing the Note as principal for its own account for investment only and not with a present view towards the public sale or distribution thereof, other than sales or distributions registered or exempt from registration under the Securities Act of 1933, as amended (the "1933 Act").

 

  

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2.3.2        Accredited Investor Status.  The Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D and has such business and financial experience as is required to give it the capacity to protect its own interests in connection with the purchase of the Note.

 

2.3.3        Reliance on Exemptions.  The Buyer understands that the Note is being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Seller is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, covenants, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Note.

 

2.3.4        Information.  The Buyer has been furnished with all materials relating to the business, finances and operations of the Seller and materials relating to the offer and sale of the Note which have been requested by the Buyer. Buyer has been afforded the opportunity to ask questions of the Seller and has received what the Buyer believes to be satisfactory answers to any such inquiries. None of the foregoing or any other due diligence investigation conducted by the Buyer or any of its advisors or representatives shall modify, amend or affect in any respect the Seller's representations and warranties contained in Section 2.1 above or the Buyer's right to rely on them. The Buyer understands that its investment in the Note involves a significant degree of risk.

 

2.3.5        Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Note.

 

2.3.6        Transfer or Resale.  The Buyer understands that (i) no public market now exists for the Note and that the Seller has made no assurances that a public market will ever exist for the Note, (ii) the Note has not been and is not being registered under the 1933 Act or any applicable state securities laws, and may not be transferred unless (a) the transfer is registered pursuant to an effective registration statement under the 1933 Act, (b) the transfer qualifies for the exemption afforded by Rule 144A or Rule 144 under the 1933 Act (or a successor rule), (c) the Buyer shall have delivered to the Seller an opinion of counsel (which opinion shall be reasonably satisfactory to the Seller) to the effect that the Note to be sold or transferred may be sold or transferred pursuant to another exemption from such registration or (d) the transfer is pursuant to the Put Option or Change of Control Put Option (as such terms are defined in the Note), and (iii) neither the Seller nor any other person is under any obligation to register such Note under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case, other than pursuant to the Registration Rights Agreement).

 

2.3.7        Legends.  The Buyer understands (i) that the Note may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against

 

 

  

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transfer of the certificates for such Note) and any other legends required by the laws of any State in which such securities will be issued:

 

Legend for the Note:

 

NEITHER THIS CONVERTIBLE PROMISSORY NOTE NOR THE SHARES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 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 1933 ACT OR COMPLIANCE WITH RULE 144 OR RULE 144A PROMULGATED UNDER THE 1933 ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IS ALSO SUBJECT TO RESTRICTIONS UNDER THE TERMS HEREOF.

 

and, (ii) that upon conversion of any Note bearing the foregoing legend, Conversion Shares will be issued in certificated form and will bear the following legend, unless at least one year (or such lesser period as then permitted under Rule 144 under the 1933 Act, or successor rule thereto) shall have elapsed from the initial issuance date of the Notes, in which case such shares shall be delivered in unrestricted, unlegended form through the facilities of the Depository Trust Company:

 

Legend for the Conversion Shares:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT REGISTRATION THEREOF UNDER THE 1933 ACT OR COMPLIANCE WITH RULE 144 OR RULE 144A PROMULGATED UNDER THE 1933 ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

The legends set forth above (other than the last sentence of the legend in clause (i)) shall be removed and the Seller (x) in the case of a Note, shall issue a certificate without such legend to the holder of any certificate upon which it is stamped or (y), in the case of Conversion Shares, shall arrange for such shares to be held in unrestricted, unlegended form through the facilities of the Depository Trust Company if, unless otherwise required by applicable state securities laws, (a) such security is sold pursuant to an effective registration statement filed under the 1933 Act, (b) such holder provides the Seller with an opinion of counsel, satisfactory to the Seller, to the effect that a public sale or transfer of such security may be made without registration under the

 

  

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1933 Act and such sale or transfer is effected or (c) such holder provides the Seller with reasonable assurances that all of the securities represented by such certificate can then be sold pursuant to Rule 144 under the 1933 Act (or successor rule thereto). The Buyer agrees to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.  If any Conversion Shares are delivered in certificated, restricted form, promptly (and no later than three Business Days) following the first anniversary of the initial issuance of the Note, the Seller shall arrange for such shares to be held in unrestricted, unlegended form through the facilities of the Depository Trust Company.

 

2.3.8        Authorization; Enforcement.  The Buyer represents and warrants to the Seller that (i) the Buyer has all requisite limited liability company power and authority and has taken all requisite limited liability company action to execute and deliver this Agreement, the Registration Rights Agreement and the Escrow Agreement, to purchase the Note to be purchased by it and to carry out and perform all of its obligations under this Agreement, the Registration Rights Agreement and the Escrow Agreement, and (ii) each of this Agreement, the Registration Rights Agreement and the Escrow Agreement constitutes the legal, valid and binding obligation of the Buyer, enforceable in accordance with its terms, except (1) as limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights generally and by equitable principles generally and (2) to the extent that indemnification provisions in the Registration Rights Agreement may be limited by applicable federal or state securities laws.

 

2.3.9        Brokerage Fees.  The Buyer has not paid, nor is obligated to pay, to any Person any brokerage or finder's fees in connection with the transactions contemplated by this Agreement.

 

	
3.

	
Deliveries at Closing.

 

3.1       Deliveries by Buyer at the Closing.  At the Closing, Buyer shall deliver the following items to Seller (and in the case of Section 3.1.2 and Section 3.1.4, to the Gabelli Stockholders):

 

3.1.1        The Consideration, by wire transfer in immediately available funds;

 

3.1.2        An executed copy of this Agreement;

 

3.1.3        An executed copy of the  Registration Rights Agreement; and

 

3.1.4        A copy of the Escrow Agreement duly executed by Buyer.

 

  

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3.2       Deliveries by Seller at the Closing.  At the Closing, Seller shall deliver the following items to Buyer (and in the case of Section 3.2.2 and Section 3.2.5, to the Gabelli Stockholders):

 

3.2.1        The executed Note;

 

3.2.2        An executed copy of this Agreement;

 

3.2.3        An executed copy of the  Registration Rights Agreement;

 

3.2.4        An opinion of Skadden, Arps, Slate, Meagher & Flom LLP, as special counsel to the Seller, dated as of the Closing Date, in substantially the form of Exhibit E hereto;

 

3.2.5        A copy of the Escrow Agreement duly executed by Seller and the Escrow Agent.

 

3.3       Deliveries by the Gabelli Stockholders at the Closing.  At the Closing, the Gabelli Stockholders shall deliver the following items to Buyer (and, in the case of Section 3.3.1, to the Seller):

 

3.3.1        An executed copy of the Agreement;

 

3.3.2        An executed copy of the Escrow Agreement; and

 

3.3.3        An opinion of Long Reimer Winegar Beppler LLP, as special counsel to GGCP, Inc., dated as of the Closing Date, in substantially the form of Exhibit F hereto.

 

	
4.

	
Covenants.

 

4.1       Reservation of Shares.  Seller shall at all times have authorized and reserved for the purpose of issuance pursuant to the conversion of the Note the total number of shares of Class A Common Stock into which the Note may then be converted (as such number may be adjusted from time to time pursuant to the terms of the Note) (the "Maximum Number"). If at any time the number of shares of Class A Common Stock authorized and reserved for issuance pursuant to the conversion of the Note is for any reason below the Maximum Number, the Seller and the Gabelli Stockholders will promptly take or cause to be taken all corporate action necessary to authorize and so reserve a number of such shares equal to the Maximum Number, including without limitation calling a special meeting of shareholders to authorize additional shares to meet the Seller's and the Gabelli Stockholders' obligations hereunder, and using their

 

  

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reasonable best efforts to obtain shareholder approval of such an increase in the authorized number of shares.

 

4.2       NYSE Listing.  Seller shall promptly secure the listing of all the Conversion Shares issued upon conversion of the Note upon the New York Stock Exchange, Inc. or such other national securities exchange, automated inter-dealer quotation system or over-the-counter market upon which shares of Class A Common Stock are then listed, and shall maintain, so long as any other shares of Class A Common Stock shall be so listed, such listing of such shares of Class A Common Stock.

 

4.3       Escrow.

 

4.3.1        If  (i) the Buyer elects to exercise any of the Put Option, the Change of Control Put Option and/or the Fundamental Change Put Option (collectively, the "Note Put Options") or an Event of Default occurs and (ii) Seller fails to deliver all or any portion of the consideration due and payable in respect of such exercise or Event of Default (in each case, the "Unpaid Amount") when it becomes due under the Note (in each case, the "Due Date"), then Buyer may, in its sole discretion, elect to make a claim under the Escrow Agreement for cash in an amount equal to the Unpaid Amount and upon receipt of such cash by the Buyer under the Escrow Agreement the Unpaid Amount shall be deemed to have been paid in full by the Seller. Buyer and GGCP shall instruct the Escrow Agent to release all of the Escrowed Funds (as defined in the Escrow Agreement) in excess of the Floor Amount (defined below) (i) promptly after each Partial Release Event (as defined in the Escrow Agreement), (ii) promptly after receipt of each Monthly Statement (defined below) and (iii) at such other time as Buyer and GGCP shall mutually agree. The Escrow Agreement shall terminate (other than the provisions of Sections 7 and 8 which will survive termination) upon the release of all Escrowed Funds (as defined in the Escrow Agreement) to the Seller and/or GGCP in accordance with the Termination Notice (as defined below). Upon the earlier to occur of (i) the full conversion of the entire aggregate principal amount of the Note, (ii) the first Business Day after the entire aggregate principal amount of the Note has been paid in full, (iii) the first Business Day after the Exercise Date on which all outstanding Payment Notices (as defined in the Escrow Agreement) have be fully discharged and paid in full and (iv) the transfer of the Note pursuant to the terms thereof (other than a transfer to an Affiliate (as defined in the Note) of Buyer or a charitable foundation established by the beneficial owner of Buyer), the Seller, GGCP and the Buyer shall give the Escrow Agent joint written notice of the termination of the Escrow Agreement (the “Termination Notice”).  Each of Seller and GGCP agrees not to subject the Collateral (as defined below) to any lien, attachment, claim, trustee process or any other judicial process of any creditor of such party, other than as provided in Section 5.1 hereto and Section 5(b) of the Escrow Agreement.

 

4.3.2        "Monthly Statement" means the monthly account statement provided by the Escrow Agent to the Buyer, GGCP and Seller pursuant to Section 3 of the Escrow Agreement. "Floor Amount" means the sum of the Unpaid Principal Amount and six months of

 

  

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interest on the Unpaid Amount at the rate of 4.5% per annum. Capitalized terms used but not defined in this Agreement that are defined in the Note shall have the meanings assigned to such terms in the Note.

 

4.4       Tag-Along Right.  If any Gabelli Entity (as defined below), acting individually or together in any combination with any other Gabelli Entity (collectively, the "Transferor"), proposes to sell, contract to sell, or otherwise transfer or dispose of, directly or indirectly, in one transaction or a series of related transactions, (each, a "Transfer") Voting Stock (as defined below) of the Seller, which represents 20% or more of the total voting power of all the then outstanding shares of Voting Stock of Seller to a Person other than a Gabelli Entity (the "Purchaser"), the Transferor shall provide written notice (a "Transfer Notice") to the Buyer no later than 30 days prior to the consummation of the Transfer specifying all the material terms and conditions of the Transfer, including but not limited to the type and number of shares of Voting Stock to be transferred, the nature and amount of the consideration to be paid by the Purchaser, the identity of the Purchaser and any conditions to the Transfer. If a change occurs in the nature or amount of consideration to be paid by the Purchaser or in any other material terms or conditions of the Transfer, the Transferor shall promptly deliver to the Buyer a new Transfer Notice. If the Buyer elects to sell Conversion Shares in connection with the Transfer by delivering written notice to the Transferor in writing within 10 days after the date on which the Buyer received the Transfer Notice, then the Transferor will not consummate the Transfer unless (i) it does so at a price at least as high and on other terms and conditions at least as favorable as those specified in the Transfer Notice and (ii) simultaneously with the consummation of the Transfer the Purchaser also purchases from the Buyer, at the same price and on the other terms and conditions specified in the Transfer Notice, a percentage of the number of Conversion Shares then beneficially owned by it equal to the percentage obtained by dividing (i) the number of shares of Voting Stock being sold by the Transferor in the Transfer by (ii) the total number of shares of Voting Stock then beneficially owned by all of the Gabelli Entities and multiplying that quotient by 100. Gabelli shall cause any Gabelli Entity that is not a party to this Agreement who becomes the record or beneficial owner of any Voting Stock of the Seller after the date of this Agreement (a "New Gabelli Stockholder") to comply with the requirements of this Section and to execute and deliver, on or prior to the date on which it acquires such record or beneficial ownership, a written undertaking to Buyer, in form and substance reasonably satisfactory to the Buyer, that such New Gabelli Stockholder will comply with the requirements of this Section 4.4 as if it was a Gabelli Stockholder, and thereafter such New Gabelli Stockholder shall be deemed to be a Gabelli Stockholder for all purposes of this Section.

 

A "Gabelli Entity" shall mean Gabelli, the spouse or any child or grandchild of Gabelli, or any Person in which Gabelli and/or one or more of such other individuals has a controlling interest or beneficially owns, directly or indirectly, (i) a majority of the number of outstanding shares of Capital Stock of such Person and/or (ii) Voting Stock of such Person which represents 50% or more of the total voting power of all the then outstanding shares of Voting Stock of such Person, and shall also mean any testamentary, charitable or similar trust or foundation of which Gabelli and/or one or more of such other individuals is a grantor, beneficiary, trustee or person having similar management authority; provided that neither Gabelli Securities, Inc. nor Associated Capital Group, Inc. shall constitute a Gabelli Entity for purposes of this Agreement.

 

  

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"Voting Stock" means, with respect to any Person, Capital Stock of such Person that is entitled to vote generally in the election of directors (or, in the case of Persons that are not corporations, persons performing similar functions) of such Person.

 

	
5.

	
Security Interest and Solvency.

 

5.1       GGCP hereby pledges, assigns and grants to Buyer a security interest in the Escrowed Funds, any Additional Deposit, the Permitted Investments, the Escrow Account and any proceeds thereof (collectively, the “Collateral”) to secure the obligations of Seller, GGCP and each of their respective affiliates (the “Secured Obligations”) under this Agreement, the Escrow Agreement and the Note (the “Note Documents”). Each of “Escrowed Funds,” “Additional Deposit,” “Permitted Investments” and "Escrow Account" has the meaning set forth in the Escrow Agreement.

 

5.2        GGCP acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Note Documents. GGCP agrees and acknowledges that all rights of Buyer under the Note Documents, GGCP’s grant of a security interest in the Collateral and all obligations of GGCP under the Note Documents, will be absolute, irrevocable, and unconditional irrespective of: (a) any claim as to the genuineness, validity, or enforceability of the Note Documents; (b) any change in the time, manner or place of payment of, or in any other term of, all of or any of the Secured Obligations or any other amendment, modification, extension or waiver of or any consent to any departure from any Note Document; (c) any change in the corporate existence, structure or ownership of Seller; (d) any liquidation, dissolution, insolvency, reorganization or other similar proceeding affecting Seller or any of its affiliates or any of its assets; (e) any release of Seller, Gabelli or any other party jointly liable in respect of any Note Document; (f) any non-perfection of any lien on any Collateral or any guarantee or other credit support in respect thereof; (g) the occurrence of any default, event of default or potential event of default under the Note Documents; (h) the absence of any action to enforce any Note Document, to recover any judgment or to enforce a judgment against Seller or any other party under any Note Document; or (i) any other circumstance whatsoever that might otherwise constitute a defense available to, or a discharge of, GGCP, Seller, Gabelli or any affiliate of the foregoing in respect of the Secured Obligations or in respect of the Note Documents (other than the indefeasible payment in full and performance of all Secured Obligations).

 

5.3       GGCP represents and warrants to Buyer on the date hereof and on the date of any Additional Deposit that: (a) after giving effect to GGCP’s grant of a security interest in the Collateral and the deposit of the Escrowed Funds and any Additional Deposit into the Escrow Account, the aggregate fair saleable value of all of GGCP’s property, at fair valuation, will be greater than the sum of all of GGCP's liabilities of any nature, including without limitation contingent and unmatured debts or claims ("Liabilities"); (b) it has not transferred, concealed or removed any of its property with the intent to hinder, delay or defraud its creditors, nor is it now granting a security interest in the Collateral or entering into any Note Document with intent to hinder, delay or defraud its creditors; (c) after giving effect to GGCP’s grant of a security interest hereunder and the deposit of the Escrowed Funds and any Additional Funds  into the Escrow Account, the value of its remaining assets is not unreasonably small in relation to its business; (d)

 

  

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it has not incurred and does not intend to incur, or believe (or reasonably believe) that it will incur Liabilities beyond its ability to pay as such Liabilities mature; (e) it has satisfied in full any final judgment against it in an action or suit for money damages which judgment results from an action or suit pending against it on or prior to the date hereof and there is no action or suit for money damages pending against it on or prior to the date hereof; and (f) there are no other proceedings pending or, to its knowledge, threatened against GGCP, at law or in equity, which, individually or in the aggregate, if adversely determined, would materially adversely affect the financial condition of GGCP or materially impair GGCP’s ability to perform its obligations under the Note Documents.

 

6.         Survival of Representations and Warranties.  All representations, warranties, agreements and covenants contained in this Agreement shall survive the Closing; provided, however, that a claim for a breach of a representation or warranty (but not for a breach of a covenant or agreement and not for any breach of representation or warranty provided for in Section 5) must be brought within one (1) year of the execution of this Agreement. In the event Buyer brings a claim within such one (1) year period, such representations and warranties shall continue to survive solely with regard to such claim until such claim has been finally resolved and satisfied. Buyer's rights under this Agreement shall not be affected by any knowledge it may have with respect to the Seller, its Subsidiaries or their businesses.

 

	
7.

	
Miscellaneous.

 

7.1        Entire Agreement.  This Agreement and the documents listed in Section 3.2 (other than the opinion of Seller's legal counsel) represents the entire agreement among the parties with respect to the transactions contemplated herein and supersede all prior agreements, written or oral, with respect thereto. This Agreement may be amended only by an instrument that is executed and authorized by all parties hereto.

 

7.2        Expenses.  Without limiting Section 7.6, Buyer and Seller will pay their own respective expenses, including attorneys' fees, in connection with the negotiation of this Agreement, the performance of its obligations hereunder, and the consummation of the transactions contemplated by this Agreement.

 

7.3        Successors and Assigns.  This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by either party without the prior written consent of the other party.

 

7.4        Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by and construed under the laws of the State of New York. Each Party irrevocably waives any objection on the grounds of venue, forum non conveniens or any similar grounds and irrevocably

 

  

15

  

consents to the jurisdiction of the courts located in the State of New York. The Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement.

 

7.5        Nonwaiver.  The failure of either party to insist upon strict adherence to any one or more of the covenants and restrictions in this Agreement, on one or more occasion, shall not be construed as a waiver, nor deprive either party of the right to require strict compliance thereafter with the same. All waivers must be in writing and signed by the waiving party.

 

7.6        Attorneys' Fees and Expenses.  In any suit or action brought to enforce this Agreement, or to obtain adjudication, declaratory or otherwise, of rights hereunder, the losing party shall pay to the prevailing party reasonable attorneys' fees and all other costs and expenses that may be incurred by the prevailing party in such action. The foregoing shall be in addition to, and shall not limit, any other rights that the non-breaching party may have against the breaching party at law or in equity.

 

7.7        Publicity.  Seller shall not issue any public statement (such as press releases, letters to shareholders, speeches and similar statements) concerning or referencing the beneficial owner of Buyer without the prior written consent of the Buyer; provided, however, that such disclosure may be made if such approval has been requested and not received and the Seller concludes (after consulting with counsel) that it is required by law or stock exchange regulation to make such disclosure in a press release or other public statement. With respect to any press release issued by Seller, Seller shall provide a copy of any proposed release to Buyer a reasonable amount of time prior to public dissemination thereof, shall incorporate Buyer's reasonable comments to such press release, if any, in good faith, and shall not disseminate such release prior to Buyer’s approval thereof, provided that such approval shall not be unreasonably withheld, conditioned or delayed.

 

7.8        Notices.  Any notice required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective for five days after being placed in the mail, if mailed by regular U.S. mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be:

 

  

16

  

 

If to the Seller or any Gabelli Stockholder:

 

GAMCO Investors, Inc.

One Corporate Center

Rye, New York 10580

Attn:  Kevin Handwerker

Executive Vice President, General Counsel and Secretary

Facsimile: (914) 921-5384

With copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Gregory A. Fernicola, Esq. and Yossi Vebman, Esq.

Facsimile: (212) 735-3000

 

If to Buyer:

 

Cascade Investment, L.L.C.

2365 Carillon Point

Kirkland, WA  98033

Attn:  General Counsel

Facsimile: (425) 803-0459

 

With copy to:

 

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attn: Robert P. Davis, Esq.

Facsimile: (212) 225-3999

Each party shall provide notice to the other of any changes in address.

 

7.9        Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

 

7.10      Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any

  

17

  

person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

7.11      Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any person, or which such person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such person, whether or not expressly specified in such provision. The construction of this Agreement shall not be affected by which party drafted this Agreement.

 

7.12      Headings.  The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

 

(the remainder of this page has been intentionally left blank)

 

  

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SIGNATURE PAGE - NOTE PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first mentioned above.

	
SELLER

	 	
BUYER

	 
	
GAMCO INVESTORS, INC.

	 	
CASCADE INVESTMENT, L.L.C.

	 
	 	 	 	 
	 	 	 	 
	
By:    

	/s/ Kevin A. Handwerker	 	
By:    

	/s/ Alan Henberger	 
	 	Name:  Kevin A. Handwerker	 	 	Name:  Alan Henberger	 
	 	Title:  Executive Vice President, General Counsel and Secretary	 	 	Title:  Authorized Representative	 
	  	 	  	 
	 	 	 	 
	
GABELLI STOCKHOLDERS

	 	  	 
	 	 	 	 
	 	 	 	 
	/s/ Mario J. Gabelli	 	 	 
	
MARIO J. GABELLI

	 	  	 
	 	 	 	 
	 	 	 	 
	
GGCP, INC.

	 	  	 
	 	 	 	 
	 	 	 	 
	
By:  

	/s/ Silvio Berni	 	  	 
	 	Name:  Silvio Berni	 	 	 
	 	Title:  Vice President	 	 	 
	  	 	  	 

  

 

  

SCHEDULE I

Ownership of Securities

	  	 	  
	
Shares of Class A Common Stock

	 	
4,425,0551

	  	 	  
	
Shares of Class B Common Stock

	 	
18,827,0362

(1) Includes 30,000 shares held by GGCP and 4,393,055 shares held by Gabelli Securities, Inc. Gabelli has voting and dispositive control over these shares. 

 

(2) Includes 453,295 shares held by Gabelli and 18,373,741 shares held by GGCP Holdings, LLC (“Holdings”). Gabelli may be deemed to have beneficial ownership of the shares held by Holdings on the basis of (i) his position as the Chief Executive Officer of, a director of, and the controlling shareholder of GGCP, which is the manager and the majority member of Holdings, and (ii) a certain profit interest in Holdings. Gabelli disclaims beneficial ownership of the shares owned by Holdings except to the extent of his pecuniary interest therein.ex10-2.htm

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this "Agreement") is made and entered into as of August 15, 2016 by and among Cascade Investment, L.L.C., a Washington limited liability company (the "Investor"), and GAMCO Investors, Inc., a Delaware corporation (the "Company").

 

RECITALS

 

A.           Investor has agreed to purchase from the Company, and the Company has agreed to sell to the Investor, a $110 million convertible promissory note (the "Note") pursuant to a Note Purchase Agreement, dated as of August 15, 2016, by and among the Company, the Investor, Mario J. Gabelli and GGCP, Inc., a Wyoming corporation (the "Purchase Agreement").  The Note is convertible into shares of Class A Common Stock, par value $0.001 per share (such shares and any other securities issued or distributed with respect to, or in exchange for, such shares pursuant to any reclassification, merger or other transaction, the "Class A Common Stock"), of the Company on the terms and conditions set forth in the Note.

 

B.           The Company agrees with the Investor for the benefit of the Holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows:

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

	
1.

	
INFORMATION

 

	
1.1

	
Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission (as defined below), which may at any time permit the sale of the Registrable Securities (as defined below) to the public without Registration, the Company agrees to use all reasonable efforts to:

 

(a)           Make and keep adequate current public information available, as those terms are understood and defined in Rule 144 under the Securities Act (as defined below), at all times after the date of this Agreement;

 

(b)           File with the Commission in a timely manner all reports and other documents required of the Company under the 1934 Act (as defined below); and

 

(c)           So long as any Person owns all or any portion of the Note or any Registrable Securities, furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as Investor may reasonably request in availing itself of any rule or regulation of the Commission allowing Investor to sell any such securities without Registration.

 

	
2.

	
REGISTRATION RIGHTS.

 

	
2.1

	
Definitions. (a) As used in this Agreement and except as otherwise defined herein, the following defined terms shall have the following meanings:

 

Applicable Securities.  The term "Applicable Securities" means in relation to a Registration Statement the Registrable Securities identified in the related Demand Notice or Piggy-back Notice.

 

Demand Registration Statement.  The term "Demand Registration Statement" means a registration statement filed under the Securities Act by the Company pursuant to the provisions of Section 2.2 hereof,

  

  

  

including the Prospectus contained therein, any amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.

Effective Time.  The term "Effective Time" means the date on which the Commission declares a Registration Statement effective or on which a Registration Statement otherwise becomes effective.

 

Form S-3.  The term "Form S-3" means such form under the Securities Act as is in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

Holder.  The term "Holder" means any holder from time to time of Registrable Securities or securities convertible into, or exercisable or exchangeable for, Registrable Securities.

 

Notice and Questionnaire.  The term "Notice and Questionnaire" means a Notice of Registration Statement and Questionnaire substantially in the form of Exhibit A hereto.

 

Person.  The term "Person" means an individual, partnership, corporation, trust, limited liability company or unincorporated organization, or other entity or organization, including a government or agency or political subdivision thereof.

 

Prospectus.  The term "Prospectus" means the prospectus (including any preliminary prospectus, any final prospectus and any prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A under the Securities Act) included in a Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement and by all other amendments and supplements to such prospectus, including all material incorporated by reference in such prospectus and all documents filed after the date of such prospectus by the Company under the 1934 Act and incorporated by reference therein.

 

Registrable Securities.  The term "Registrable Securities" means: (a) the Class A Common Stock or other securities issuable upon conversion of the Note, (b) any securities (including Class A Common Stock) issued or distributed with respect to, or in exchange for, the Note or such Class A Common Stock pursuant to any reclassification, merger, consolidation, reorganization or other transaction ("Other Securities") or upon conversion, exercise or exchange of Other Securities and (c) any securities issued or distributed with respect to, or in exchange for, Other Securities (whether directly or indirectly through a series of transactions) pursuant to any reclassification, merger, consolidation, reorganization or other transaction or upon conversion, exercise or exchange of Other Securities, in each case other than Unrestricted Securities.

 

Registrable Securities Then Outstanding.  The number of shares of "Registrable Securities then Outstanding" shall mean the number of shares of Class A Common Stock which are Registrable Securities and are then (1) issued and outstanding or (2) issuable pursuant to the exercise or conversion of the Note.

 

Registration.  The terms "Register," "Registered," and "Registration" refer to a registration effected by preparing and filing a Registration Statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement.

 

Registration Statement.  The term "Registration Statement" means a registration statement filed under the Securities Act by the Company pursuant to the provisions of Section 2 hereof, including the Prospectus contained therein, any amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.

 

Registration Expenses.  The term "Registration Expenses" means all expenses incident to the Company's performance of or compliance with any Registration of Registrable Securities pursuant to this Agreement,

  

2

  

including, without limitation, all registration, filing and Financial Industry Regulatory Authority, Inc. (“FINRA”) fees, fees of any stock exchange upon which the Registrable Securities are listed, all fees and expenses of complying with securities or blue sky laws, all printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits or "comfort" letters required by or incident to such performance and compliance, premiums and other costs of policies of insurance obtained by the Company against liabilities arising out of the public offering of Registrable Securities being registered and any fees and disbursements of underwriters customarily paid by issuers, and fees and disbursements of one counsel retained by the Selling Shareholders, which shall not exceed in the aggregate $20,000, but excluding all transfer taxes, underwriting discounts and commissions, if any, relating to Registrable Securities.

SEC.  The term "SEC" or "Commission" means the U.S. Securities and Exchange Commission Securities Act.  The term "Securities Act" means the Securities Act of 1933, as amended.

 

Unrestricted Security. The term "Unrestricted Security" means any Registrable Security that (i) has been effectively registered under the Securities Act, (ii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) under circumstances in which such Registrable Securities become freely transferable under the Securities Act and any legend relating to restrictions on transfer under the Securities Act is removed, (iii) is transferable pursuant to Rule 144 under the Securities Act (or any successor provision thereto) provided that the condition in the last sentence of paragraph (b)(1)(i) is met or (iv) has otherwise been transferred and a new security not subject to transfer restrictions under the Securities Act has been delivered upon such transfer by or on behalf of the Company.

 

1934 Act. The term "1934 Act" means the Securities Exchange Act of 1934, as amended.

 

(b)           The words "include," "includes" and "including," when used in this Agreement, shall be deemed to be followed by the words "without limitation."

 

(c)           The words "hereof", "herein", and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

(d)           The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa.

 

	
2.2

	
Demand Registration.

 

(a)           Request by Holders.  If the Company shall receive at any time (but not within 12 months of the effective date of another Demand Registration Statement effected by the Company on behalf of any Holder pursuant to this Section 2.2), a written request ("Demand Notice") from any Holder who holds Registrable Securities in excess of 1% of the then outstanding number of shares of Class A Common Stock (each such Person eligible to make a request, an "Eligible Holder" and each such Person who makes a request, a "Requestor") that the Company file a Registration Statement under the Securities Act covering the Registration of Registrable Securities pursuant to this Section 2.2, then the Company shall, within fifteen (15) business days of the receipt of the Demand Notice, give written acknowledgment of such request ("Request Acknowledgment") to each Eligible Holder (if any).  If an Eligible Holder desires to include in any such Registration Statement all or any part of the Registrable Securities then held by such Eligible Holder, the Eligible Holder shall, within ten (10) days after receipt of the Request Acknowledgement from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities the Eligible Holder wishes to include in such Registration Statement. Eligible Holders who elect to participate in an offering pursuant to this Section 2.2 or pursuant to Section 2.3 (including but not limited to a Requestor) are referred to collectively as "Selling Shareholders".  The Company shall effect, as soon as reasonably practicable, the Registration under the Securities Act of all Applicable Securities which the Selling Shareholders request to be registered and included in such Registration, subject only to the limitations of this Section 2.2; provided that the Applicable Securities requested by the Requestor(s) to be registered pursuant to such request must either: (i) be at least 10% of all Registrable Securities then outstanding (but having an anticipated aggregate public offering price of at least

  

3

  

$10,000,000) or (ii) have an anticipated aggregate public offering price (before any underwriting discounts and commissions) of not less than $20,000,000.

 

(b)           Underwriting.  If a Requestor initiates the Registration request under this Section 2.2 and intends to distribute the Applicable Securities covered by its request by means of an underwritten offering, then the Requestor shall so advise the Company as a part of its request made pursuant to this Section 2.2. In such event, the right of the Selling Shareholders to include their Applicable Securities in such Registration shall be conditioned upon each Selling Shareholder's participation in such underwriting and the inclusion of their Applicable Securities in the underwriting to the extent provided herein.  If the Requestor proposes to distribute its securities through such underwriting, each Selling Shareholder shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Requestor, with the consent of the Company, which consent shall not be unreasonably withheld.  Notwithstanding any other provision of this Section 2.2, if the underwriter(s) advise(s) the Company and the Selling Shareholders in writing that in its or their opinion the number of securities requested to be registered exceeds the number which can be sold in such offering without materially adversely affecting the pricing, timing or likely success of the offering (with respect to any offering, the "Maximum Number"), then the Company shall so advise the Selling Shareholders and include such Maximum Number in the Registration.  The number of shares that may be included in the Registration and the underwriting shall be allocated, first, to the Requestor, and second, to the other Selling Shareholders based on the relative proportion of shares of all such Selling Shareholders requested to be so registered, and third, to the Company and to other securityholders of the Company who have requested that their securities be included in such Registration Statement and who hold contractual registration rights with respect to such securities.  If a Selling Shareholder disapproves of the terms of any such underwriting, the Selling Shareholder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the Registration Statement.  Any Registrable Securities excluded and withdrawn from such underwriting shall be withdrawn from the Registration.  For purposes of this agreement, an "underwritten offering" shall be an offering pursuant to which securities are sold to a broker-dealer or other financial institution or group thereof for resale by them to investors.

 

(c)           Maximum Number of Demand Registrations.  The Company is obligated to effect not more than three (3) such Registrations in total during the effectiveness of this Agreement pursuant to this Section 2.2.

 

(d)           Deferral.  Notwithstanding the foregoing, if the Company, in the good faith judgment of the Board of Directors of the Company, determines that the filing or the effectiveness of a Registration Statement at that time would interfere with pending financing, acquisition, corporate reorganization or other corporate transaction involving the Company or any of its subsidiaries and would be seriously detrimental to the Company and its shareholders and it is therefore essential to defer the filing or effectiveness of the Registration Statement pursuant to this Section 2.2, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Requestor or in the case of delaying effectiveness, 180 days after receipt of the request of the Requestor; provided, however, that the Company may not utilize this right more than once in any twelve- (12-) month period.  The Company shall advise the Requestor of any such determination as promptly as reasonably practicable.

 

(e)           Right to Withdraw.  The Requestor requesting any Registration pursuant to this Section 2.2 shall have the right to withdraw such request (i) prior to the time the Registration Statement in respect of such Registration has been declared effective, (ii) upon the issuance by a governmental agency or the Commission of a stop order, injunction or other order which interferes with such Registration, (iii) if the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such Registration are not satisfied other than as a result of default by the Selling Shareholders, (iv) such withdrawal is requested by the Requestor because of the occurrence of a significant negative change in market conditions or the Company's business, financial condition, results of operations or prospects since the date of the Demand Notice or (v) if the Company avails itself of Section 2.2(d) hereof; it being understood that such Registration shall be deemed not to have been requested for purposes of Section 2.2 if the Requestor withdraws its request pursuant this Section 2.2(e); provided that, if the

  

4

  

Requestor withdraws its request pursuant to clause (i) above, such Requestor agrees to reimburse the Company for the reasonable out-of-pocket expenses the Company has incurred prior to such withdrawal in effecting such Registration.  If the Requestor withdraws a request pursuant to this Section 2.2(e) but the Company nevertheless determines to complete, within 30 days after such withdrawal, the Registration so requested as to securities other than the Applicable Securities, the Eligible Holders shall be entitled to participate in such Registration pursuant to Section 2.3 hereof, but in such case the Intended Offering Notice (as defined below) shall be required to be given to the Eligible Holders at least ten (10) business days prior to the anticipated effective date of the Registration Statement and the Eligible Holders shall be required to give the Piggy-back Notice no later than five (5) business days after the Company's delivery of such Intended Offering Notice.

 

	
2.3

	
Piggyback Registrations.

 

(a)           The Company shall notify each Eligible Holder in writing (the "Intended Offering Notice") at least ten (10) business days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of any securities of the Company (other than a registration statement on Form S-8 or Form S-4, or any successor forms thereof).  Such Intended Offering Notice shall offer to include in such registration statement for offer to the public such number or amount of Registrable Securities as each such Eligible Holder may request, subject to the conditions set forth herein, and shall specify, to the extent then known, the number and class of securities proposed to be registered, the proposed date of filing of such registration statement, any proposed means of distribution of such securities, any proposed managing underwriter or underwriters of such securities and a good faith estimate by the Company of the proposed maximum offering price of such securities, as such price is proposed to appear on the facing page of such registration statement.  If an Eligible Holder of Registrable Securities desires to include in any such registration statement all or any part of the Registrable Securities then held, the Eligible Holder shall, within ten (10) days after receipt of the Intended Offering Notice from the Company, so notify the Company in writing (the "Piggy-back Notice"), and in such notice shall inform the Company of the number of Registrable Securities the Eligible Holder wishes to include in such registration statement and offered to the public.  Upon the request of the Company, the Selling Shareholders shall enter into such underwriting, custody and other agreements as shall be customary in connection with registered secondary offerings or necessary or appropriate in connection with the offering.  If the Eligible Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, Eligible Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

(b)           Underwriting.  If a Registration Statement under which the Company gives notice under this Section 2.3 is for an underwritten offering, then the Company shall so advise Eligible Holders.  In such event, the right of Eligible Holders to include Registrable Securities in a Registration pursuant to this Section 2.3 shall be conditioned upon the Eligible Holder's participation in such underwriting and the inclusion of Eligible Holder's Registrable Securities in the underwriting to the extent provided herein.  Each Selling Shareholder shall, in such event, enter into an underwriting agreement in customary form in connection with registrable secondary offerings with the managing underwriter or underwriter(s) selected for such underwriting.  Notwithstanding any other provision of this Agreement, if the underwriter(s) advise(s) the Company and the Selling Shareholders in writing that in its or their opinion the number of securities requested to be Registered exceeds the Maximum Number, then the Company shall so advise the Selling Shareholders and include such Maximum Number in the Registration.  The number of shares that may be included in the Registration and the underwriting shall be allocated, first, to the Company, and second, to all selling shareholders (including the Selling Shareholders), based on the relative proportion of shares of all such selling shareholders. If any Selling Shareholder who has elected to participate in the underwritten offering disapproves of the terms of any such underwriting, such Selling Shareholder may elect to withdraw therefrom by promptly providing written notice to the Company and the underwriter, at any time prior to the sale thereof (or, if applicable, the entry into a binding agreement for such sale).  Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the Registration.

  

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(c)           Cumulative Rights.  The rights of the Holders pursuant to Sections 2.2 and 2.3 are cumulative, and the exercise of rights under one such Section shall not exclude the subsequent exercise of rights under the other such Section (except to the extent expressly provided otherwise herein).  Notwithstanding anything herein to the contrary, the Company may abandon and/or withdraw any Registration as to which rights under Section 2.3 may exist at any time and for any reason without liability hereunder.  In such event, the Company shall notify each Selling Shareholder that has delivered a Piggy-back Notice to participate therein. No Registration of Applicable Securities effected pursuant to a request under this Section 2.3 shall be deemed to be, or shall relieve the Company of its obligation to effect, a Registration upon request under Section 2.2 hereof.  The Company may enter into other registration rights agreements; provided, however, that the rights and benefits of a securityholder with respect to Registration of the Company's securities as contained in any such other agreement shall be consistent with, and no more favorable to such securityholder than, the rights and benefits of holders of Registrable Securities as contained in this Agreement.

 

	
2.4

	
Obligations of the Company.

 

(a)           Registration Expenses.  All Registration Expenses incurred in connection with a Registration pursuant to Sections 2.2 and 2.3 shall be borne by the Company. Each Selling Shareholders shall bear its respective proportionate share (based on the total number of shares sold in such Registration) of all underwriting discounts or commissions payable to underwriters or brokers in connection with such offerings.

 

(b)           Registration.  Whenever required to effect the Registration of any Applicable Securities under this Agreement, the Company shall, as soon as reasonably practicable:

 

(i)           Prepare, and as soon as reasonably practicable after receiving a Demand Notice or Piggy-back Notice, file with the SEC a Registration Statement relating to the offer and sale of such Applicable Securities on any applicable form, and in the case of a Demand Registration Statement, on any applicable form the Requestor may reasonably request (which may include a "shelf" Registration Statement on Form S-3 for use in connection with a delayed or continuous offering under Rule 415 promulgated under the Securities Act), and use all reasonable efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly as reasonably practicable after the date of filing of the Registration Statement, and to keep such Registration Statement continuously effective in order to permit the Prospectus forming a part thereof to be usable by the Selling Shareholders for resales of the Applicable Securities for a period ending on the earlier of (i) 180 days from the Effective Time of such Registration Statement and (ii) such time as all of such Applicable Securities have been disposed of by the Selling Shareholders or no longer constitute Registrable Securities.

 

(ii)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement.

 

(iii)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), furnish to each Selling Shareholder or its agents, prior to the Effective Time, a copy of the Registration Statement initially filed with the Commission, and such number of copies of each amendment thereto and each amendment or supplement, if any, to the Prospectus included therein, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Applicable Securities owned by them that are included in such Registration.

 

(iv)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), promptly take such action as may be reasonably

  

6

  

necessary so that (i) each of the Registration Statement and any amendment thereto and the Prospectus forming part thereof and any amendment or supplement thereto (and each report or other document incorporated therein by reference in each case), when it becomes effective, complies in all material respects with the Securities Act and the 1934 Act and the respective rules and regulations thereunder, (ii) each of the Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) each of the Prospectus forming part of the Registration Statement, and any amendment or supplement to such Prospectus, does not at any time during the period during which the Company is required to keep a Registration Statement continuously effective (other than any period during which it is entitled and elects to postpone offers and sales under Section 2.2(d) (each, a "Postponement Period")) include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(v)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), promptly upon learning thereof, advise each Selling Shareholder, and shall confirm such advice in writing if so requested by any such Selling Shareholder:

 

(a)           when the Registration Statement and any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

 

(b)           of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus included therein or for additional information;

 

(c)           of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for such purpose;

 

(d)           of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included in the Registration Statement for sale in any jurisdiction or the initiation of any proceeding for such purpose;

 

(e)           following the effectiveness of any Registration Statement, of the happening of any event or the existence of any state of facts that requires the making of any changes in the Registration Statement or the Prospectus included therein so that, as of such date, such Registration Statement and Prospectus do not contain an untrue statement of a material fact and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading (which advice shall be accompanied by an instruction to such Selling Shareholder to suspend the use of the Prospectus until the requisite changes have been made which instruction such Selling Shareholders agree to follow); and

 

(f)           if at any time any of the representations and warranties of the Company contemplated by paragraph (xiii) below cease to be true and correct or will not be true and correct as of the closing date for the offering.

 

(vi)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), use its reasonable best efforts to prevent the issuance, and if issued to obtain the withdrawal, of any order suspending the effectiveness of the Registration Statement at the earliest possible time.

  

7

  

(vii)           Upon written request, furnish to each Selling Shareholder, without charge, at least one copy of the Registration Statement and all post-effective amendments thereto, including financial statements and schedules, and all reports, other documents and exhibits that are filed with or incorporated by reference in the Registration Statement.

 

(viii)           During the period the Company is required to keep a Registration Statement continuously effective under Section 2.4(b)(i) or elects to keep effective, deliver to each Selling Shareholder and any managing underwriter or agent, without charge, as many copies of the Prospectus included in the Registration Statement and any amendment or supplement thereto and other documents as they may reasonably request to facilitate the distribution of the Applicable Securities; and the Company consents to the use of the Prospectus, with any amendment or supplement thereto, by each of the Selling Shareholders and any managing underwriter or agent in connection with the offering and sale of the Applicable Securities covered by the Prospectus and any amendment or supplement thereto during such period.

 

(ix)           Use reasonable efforts to register or qualify or cooperate with the Selling Shareholders and their respective counsel in connection with the registration or qualification of such Applicable Securities for offer and sale under any applicable securities or "blue sky" laws of such jurisdictions within the United States as any Selling Shareholder may reasonably request, use reasonable efforts to keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers and sales in such jurisdictions for the period during which the Company is required to keep a Registration Statement continuously effective under Section 2.4(b)(i) or elects to keep effective and take any and all other actions reasonably requested by a Selling Shareholder which are necessary or advisable to enable the disposition in such jurisdictions of such Applicable Securities; provided, however, that nothing contained in this Section shall require the Company to (A) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section or (B) take any action which would subject it to general service of process or taxation in any such jurisdiction if it is not then so subject.

 

(x)           Use reasonable best efforts to cause all such Applicable Securities to be sold pursuant to the Registration Statement to be listed on any securities exchange or automated quotation service on which securities of the Company are listed or quoted.

 

(xi)           Cooperate with the Selling Shareholders to facilitate the timely preparation and delivery of certificates representing Applicable Securities to be sold pursuant to the Registration Statement, which certificates shall comply with the requirements of any securities exchange or automated quotation service on which any securities of the Company are listed and quoted, and which certificates shall be free of any restrictive legends and in such permitted denominations and registered in such names as the Selling Shareholders or any managing underwriter or agent may request in connection with the sale of Applicable Securities pursuant to the Registration Statement.

 

(xii)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), upon the occurrence of any fact or event contemplated by Section 2.4(b)(v)(e) hereof, the Company shall promptly prepare a post-effective amendment or supplement to the Registration Statement or the Prospectus, or any document incorporated therein by reference, or file any other required document so that, after such amendment or supplement, such Registration Statement and Prospectus do not contain an untrue statement of a material fact and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading; provided, however, that the Company shall not be required to take any such action during a Postponement Period (but it shall promptly thereafter). In the event that the Company notifies the Selling Shareholders of the occurrence of any event contemplated by Section 2.4(b)(v)(e) hereof, each Seller Shareholder agrees, as a condition of the inclusion of any of such Seller Shareholder's Applicable Securities in the

 

  

8

  

Registration Statement, to suspend the use of the Prospectus until the requisite changes to the Prospectus have been made.

 

(xiii)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), enter into such customary agreements (including an underwriting agreement in customary form in the event of an underwritten offering) and take all other reasonable and appropriate action in order to expedite and facilitate the registration and disposition of the Applicable Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures substantially identical to those set forth in Section 2.7 hereof with respect to all parties to be indemnified pursuant to Section 2.7 hereof.  In addition, in such agreements, the Company will make such representations and warranties to the Selling Shareholders and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in primary equity offerings.  The Selling Shareholders shall be party to such agreements and may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of the Selling Shareholders and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of the Selling Shareholders.  No Selling Shareholders shall be required to make any representations or warranties to or agreements with the Company or the underwriters or agents other than representations, warranties or agreements relating to such Selling Shareholder, its Applicable Securities and its intended method of distribution or any other representations required by law.

 

(xiv)           Agree, if requested by the managing underwriter in an underwritten offering, not to effect any public sale or distribution of any securities the same as or similar to the Applicable Securities registered under the Registration Statement relating to such offering, or any securities convertible into or exchangeable or exercisable for such Applicable Securities, during the ten day period prior to, and during the 180-day period beginning on, the effective date of a Registration Statement or, if later, the commencement of the public distribution of securities to the extent timely notified in writing by the managing underwriters.  The Selling Shareholders agree, if reasonably requested by the managing underwriter in an underwritten primary offering of equity securities by the Company or securities convertible into or exchangeable for such securities, not to effect a public sale or distribution of Applicable Securities the same as or similar to those being registered in such underwritten offering (except as part of such offering) during the ten-day period prior to, and during the 180-day period beginning on, the effective date of the Registration Statement relating thereto or, if later, the commencement of the public distribution of such securities, to the extent timely notified in writing by such managing underwriter.

 

(xv)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), use best efforts to:

 

(a)           (1) make reasonably available for inspection by the Selling Shareholders, any underwriter participating in any disposition pursuant to the Registration Statement, and any attorney, accountant or other agent retained by such Selling Shareholder or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and (2) cause the Company's officers, directors and employees to supply all information reasonably requested by such Selling Shareholders or any such underwriter, attorney, accountant or agent in connection with the Registration Statement, in each case, as is customary for similar due diligence examinations; provided, however, that all records, information and documents that are designated by the Company, in good faith, as confidential shall be kept confidential by such Selling Shareholders and any such underwriter, attorney, accountant or agent, unless such disclosure is required in connection with a court proceeding after such advance notice to the Company (to the extent practicable in the circumstances) so as to permit the Company to contest the same, or required by law, or such records, information or documents become available to the public generally or through a third party without an

  

9

  

accompanying obligation of confidentiality; and provided, further, that, if the foregoing inspection and information gathering would otherwise disrupt the Company's conduct of its business, such inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of the Selling Shareholders and the other parties entitled thereto by one counsel designated by and on behalf of the Selling Shareholders and other parties;

 

(b)           in connection with any underwritten offering, obtain opinions of counsel to the Company (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the underwriters) addressed to the underwriters, covering the matters customarily covered in opinions requested in secondary underwritten offerings of equity securities, to the extent reasonably required by the applicable underwriting agreement;

 

(c)           if requested, in connection with any underwritten offering, obtain "cold comfort" letters and updates thereof from the independent public accountants of the Company (and, if necessary, from the independent public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each Selling Shareholder participating in such underwritten offering (if such Selling Shareholder has provided such letter, representations or documentation, if any, required for such cold comfort letter to be so addressed) and the underwriters, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with secondary underwritten offerings of equity securities;

 

(d)           in connection with any underwritten offering, deliver such documents and certificates as may be reasonably requested by any Selling Shareholders participating in such underwritten offering and the underwriters, if any, including, without limitation, certificates to evidence compliance with any material conditions contained in the underwriting agreement or other agreements entered into by the Company; and

 

(e)           use its best efforts to comply with all applicable rules and regulations of the Commission and make generally available to its security holders, as soon as reasonably practicable (but not more than twelve (12) months) after the effective date of the Registration Statement, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder.

 

(xvi)           Not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Applicable Securities which are in a form eligible for deposit with The Depository Trust Company.

 

(xvii)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), cooperate with each Selling Shareholder and each underwriter or agent participating in the disposition of such Applicable Securities and their respective counsel in connection with any filings required to be made with FINRA.

 

(xviii)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), as soon as reasonably practicable after filing with the Commission of any document which is incorporated by reference into the Registration Statement or the Prospectus, upon written request, provide copies of such document to counsel for each Selling Shareholder and to the managing underwriters and agents, if any.

 

(xix)           Provide and cause to be maintained a transfer agent and registrar for all Applicable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement.

  

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(xx)           During the period the Company is required to keep the Registration Statement continuously effective under Section 2.4(b)(i), use reasonable best efforts to take all other steps necessary to effect the timely Registration of the Applicable Securities covered by the Registration Statements contemplated hereby.

 

	
2.5

	
Furnish Information.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2 that each Selling Shareholder shall deliver to the Company a duly completed Notice and Questionnaire, and furnish to the Company such information regarding it, the Registrable Securities held by it, the intended method of disposition of such securities as shall be required to timely effect the Registration of their Registrable Securities, and such other information as may be required by law for inclusion in the Registration Statement.

 

	
2.6

	
Delay of Registration.  Neither Requestor nor any Eligible Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such Registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

	
2.7

	
Indemnification.  In the event any Registrable Securities are included in a Registration Statement under Sections 2.2 or 2.3:

 

(a)           By the Company.  To the extent permitted by law, the Company will indemnify and hold harmless each Selling Shareholder and their respective members, officers, employees and agents, any underwriter (as defined in the Securities Act), selling agent or other securities professional for the Selling Shareholders and each Person, if any, who controls any Selling Shareholder, underwriter, selling agent or other securities professional within the meaning of the Securities Act or the 1934 Act against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the 1934 Act or other federal or state law or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"):

 

(i)           any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement, including any Prospectus contained therein or any amendments or supplements thereto (in the case of any Prospectus, in light of the circumstances under which they were made);

 

(ii)           the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading(in the case of any Prospectus, in light of the circumstances under which they were made); or

 

(iii)           any violation or alleged violation by the Company of the Securities Act, the 1934 Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the 1934 Act or any federal or state securities law in connection with the offering covered by such Registration Statement;

 

and the Company will reimburse each Selling Shareholder and their respective members, officers, employees and agents, underwriter, selling agent or other securities professional or controlling Person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that (A) the Company will not be liable, in an offering in which the Company did not execute an underwriting agreement or in which there was no underwriter, to any Selling Shareholder under this Section with respect to any Prospectus to the extent that any such loss, liability, claim, damage or expense of such holder results from the fact that a Selling Shareholder sold Registrable Securities to a Person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the final prospectus if the Company has previously and timely furnished copies thereof to such holder; (B) the indemnity agreement contained in this subsection 2.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the written consent of the Company (which consent shall not be unreasonably withheld), and (C) the Company shall not be liable in any such case for any such loss, claim,

 

  

11

  

damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such Registration by a Selling Shareholder, or their respective members, officers, employees and agents, underwriter or controlling Person thereof.

 

(b)           By each Selling Shareholder.  To the extent permitted by law, each Selling Shareholder, severally and not jointly, will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, each Person, if any, who controls the Company within the meaning of the Securities Act, and any underwriter against any losses, claims, damages or liabilities to which the Company or any such director, officer, controlling Person, or underwriter may become subject under the Securities Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Selling Shareholder expressly for use in connection with such Registration; and such Selling Shareholder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling Person, or underwriter in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 2.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such Selling Shareholder, which consent shall not be unreasonably withheld; and provided, further, that the total amounts payable in indemnity by any Selling Shareholder under this Section 2.7(b) in respect of any Violation shall not exceed the proceeds (net of underwriters' and brokers' discounts and commissions) received by such Selling Shareholder in the registered offering out of which such Violation arises.  For the avoidance of doubt, this provision shall not impose any indemnity obligation on a Selling Shareholder to the extent that the Violation did not occur in reliance upon and in conformity with written information furnished by such Person.

 

(c)           Notice.  Promptly after receipt by an indemnified party under this Section 2.7 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.7, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that if the indemnifying party assumes such defense the indemnifying party shall have no further liability for the fees and expenses of counsel paid by the indemnified party, except that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the indemnified party except to the extent of any actual prejudice.

 

(d)           Contribution.  If the indemnification provided in this section 2.7 is unavailable or insufficient to hold harmless an indemnified party under Section 2.7(a) or (b), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Selling Shareholders on the other from the offering of the securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Selling Shareholder(s) on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other equitable considerations.  The relative benefits received by the Company on the one hand and the Selling Shareholder(s) on the other shall be deemed to be in the same proportion as the total net proceeds from the offering received by the Company bear to the total net proceeds received by the Selling Shareholder(s).  The relative fault shall be determined by reference to, among other things, whether the

  

12

  

untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact related to information supplied by the Company or written information supplied by a Selling Shareholder, and the parties' relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this paragraph (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim that is the subject of this Section.  Notwithstanding the provisions of this Section, a Selling Shareholder shall not be required to contribute any amount in excess of the amount of the total net proceeds (net of commissions) received by such Selling Shareholder from the sale of the securities pursuant to this Agreement exceeds the amount of any damages or expenses that a Selling Shareholder has otherwise been required to pay, or has incurred, by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  The obligations of the Selling Shareholders in this Section 2.7(d) to contribute shall be several in proportion to the percentage of principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint.

 

(e)           Survival.  The obligations of the Company and Eligible Holders under this Section 2.7 shall survive the completion of any offering of Registrable Securities in a Registration Statement, and otherwise.

 

	
2.8

	
Termination of the Company's Obligations.  The Company shall have no obligations pursuant to Section 2 with respect to: (i) any request or requests for Registration made by a Requestor on a date more than seven (7) years after the date of this Agreement at a time when such Requestor is not an affiliate of the Company; or (ii) any Registrable Securities proposed to be sold by a Requestor in a Registration pursuant to Section 2.2 or 2.3 if, in the opinion of counsel to the Company, all such Registrable Securities are Unrestricted Securities.

 

	
3.

	
GENERAL PROVISIONS.

 

	
3.1

	
Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  This Agreement shall extend to all successive transferees of the Note and Registrable Securities, each of which Persons are hereby made third party beneficiaries hereof and may enforce the terms of this Agreement as if such Person was a direct party hereto.

 

	
3.2

	
Third Parties.  Nothing in this Agreement, express or implied, is intended to confer upon any Person, other than the parties hereto and their successors and assigns and third party beneficiaries hereof, any rights or remedies under or by reason of this Agreement.

 

	
3.3

	
Governing Law and Venue.  This Agreement shall be governed by and construed under the laws of the State of New York.  Each Party irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to the jurisdiction of the courts located in the State of New York. The Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement.

 

	
3.4

	
Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

 

	
3.5

	
Headings.  The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  All references in this Agreement to sections, paragraphs, exhibits and schedules shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits and schedules attached hereto, all of which exhibits and schedules are incorporated herein by this reference.

 

  

13

  

	
3.6

	
Notices.  Any notice required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective for five (5) days after being placed in the mail, if mailed by regular U.S. mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party.  The addresses for such communications shall be:

 

If to the Company:

 

GAMCO Investors, Inc.

One Corporate Center

Rye, New York 10580

Attn: Kevin Handwerker

Executive Vice President, General Counsel and Secretary

Facsimile: (914) 921-5384

 

With copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Gregory A. Fernicola, Esq. and Yossi Vebman, Esq.

Facsimile: (212) 735-3000

 

If to the Investor:

 

Cascade Investment, L.L.C.

2365 Carillon Point

Kirkland, WA 98033

Attn: Michael Larson

Facsimile: (425) 893-8758

 

With copy to:

 

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attn: Robert P. Davis, Esq.

Facsimile: (212) 225-3999

 

	
3.7

	
Attorneys' Fees.  If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees, experts' fees and costs, including those for pretrial, trial, on appeal, in arbitration and in bankruptcy and all other costs and necessary disbursements associated with any such actions, in addition to any other relief to which such party may be entitled.  The foregoing shall be in addition to, and shall not limit, any other rights that the non-breaching party may have against the breaching party at law or in equity.

 

	
3.8

	
Adjustments for Stock Splits, Etc.  Wherever in this Agreement there is a reference to a specific number of shares of common stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

	
3.9

	
Aggregation of Stock.  All shares held or acquired by affiliated Persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

  

14

  

	
3.10

	
Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Company and Investor (or, following assignment and transfer of the Note, by those holders owning more than 50% of the principal amount of the Note).  Any amendment or waiver effected in accordance with this Section shall be binding upon each future holder of Registrable Securities, and Company.  No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provisions hereof, whether or not similar, nor shall any such waiver constitute a continuing waiver.  No waiver shall be binding unless expressed as such in a document executed by the party making the waiver.

 

	
3.11

	
Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any Person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

	
3.12

	
Entire Agreement.  This Agreement, together with all exhibits and schedules hereto, constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings duties or obligations between the parties with respect to the subject matter hereof.

 

[The balance of this page intentionally left blank]

  

15

  

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date and year first above written.

 

	  	
"COMPANY":

	  	  
	  	
GAMCO INVESTORS, INC., a Delaware corporation

	  	  
	  	
By:  

	/s/ Kevin A. Handwerker
	 	 	Name:  Kevin A. Handwerker
	 	 	Title:  Executive Vice President, General Counsel and Secretary
	  	  
	  	  
	  	
"INVESTOR":

	  	  
	  	
CASCADE INVESTMENT, L.L.C., a Washington limited liability company

	  	  
	  	
By:  

	/s/ Alan Henberger
	 	 	Name:  Alan Henberger
	 	 	Title:  Authorized Representative

  

16

  

EXHIBIT A

 

GAMCO Investors, Inc.

 

 

Notice of Registration Statement

 

and

 

Questionnaire

 

(Date)

 

Reference is hereby made to the Registration Rights Agreement (the "Registration Rights Agreement"), dated August 15, 2016, between GAMCO Investors, Inc. ("GAMCO") and Cascade Investment, L.L.C. (“Investor”). GAMCO [has filed] with the United States Securities and Exchange Commission (the "Commission") a registration statement on Form (the "Registration Statement") for the registration and resale under the Securities Act of 1933, as amended (the "Securities Act"), of GAMCO's Class A Common Stock, par value $0.001 per share (the "Securities").  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

 

Each Holder of Registrable Securities is entitled to have the Registrable Securities owned by it included in the Registration Statement. In order to have Registrable Securities included in the Registration Statement, this Notice of Registration Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to GAMCO's counsel at the address set forth herein. Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire (i) will not be named as selling securityholders in the Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities.

 

Certain legal consequences arise from being named as a selling securityholder in the Registration Statement and related Prospectus. Accordingly, Holders of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Registration Statement and related Prospectus.

 

ELECTION

 

The undersigned Holder (the "Selling Shareholder") of Registrable Securities hereby elects to include in the Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3).  The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement, including, without limitation, Section 2.7 of the Registration Rights Agreement, as if the undersigned Selling Shareholder were an original party thereto.

 

The Selling Shareholder hereby provides the following information to GAMCO and represents and warrants that such information is accurate and complete:

  

A-1

  

QUESTIONNAIRE

 

	
(1)

	
(a)

	
Full Legal Name of Selling Shareholder:

 

	
  

	
(b)

	
Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in (3) below:

 

	
(2)

	
Address for Notices to Selling Shareholder:

 

Telephone:

 

Fax:

 

Contact Person:

 

	
(3)

	
Except as set forth below in this Item (3), the undersigned does not beneficially own any Registrable Securities. 

 

	
  

	
(a)

	
Number and type of Registrable Securities (as defined in the Registration Rights Agreement) beneficially owned:

 

	
  

	
(b)

	
Number and type of Registrable Securities which the undersigned wishes to be included in the Registration Statement:

 

	
(4)

	
Beneficial Ownership of other securities of GAMCO:

 

Except as set forth below in this Item (4), the undersigned Selling Shareholder is not the beneficial or registered owner of any shares or any other securities of GAMCO, other than the Registrable Securities listed above in Item (3).

 

State any exceptions here:

 

	
(5)

	
Relationships with GAMCO:

 

Except as set forth below, neither the Selling Shareholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with GAMCO (or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

	
(6)

	
Plan of Distribution:

 

Except as set forth below, the undersigned Selling Shareholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all):  Such Registrable Securities may be sold from time to time directly by the undersigned Selling Shareholder or, alternatively, through underwriters, broker-dealers or agents.  Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices.  Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registered Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Shareholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume.  The Selling Shareholder may also sell

  

A-2

  

Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities.

 

State any exceptions here:

 

In the event that the Selling Shareholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to GAMCO, the Selling Shareholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement.

 

By signing below, the Selling Shareholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Registration Statement and related Prospectus.  The Selling Shareholder understands that such information will be relied upon by GAMCO in connection with the preparation of the Registration Statement and related Prospectus.

 

In accordance with the Selling Shareholder's obligation under Section 2.5 of the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Registration Statement, the Selling Shareholder agrees to promptly notify GAMCO of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Registration Statement remains in effect.  All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery as follows:

 

	
  

	
(i)

	
To GAMCO:

 

GAMCO Investors, Inc.

One Corporate Center

Rye, New York 10580

Attn: Kevin Handwerker

Executive Vice President, General Counsel and Secretary

Facsimile: (914) 921-5384

 

	
  

	
(ii)

	
With a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Gregory A. Fernicola, Esq. and Yossi Vebman, Esq.

Facsimile: (212) 735-3000

 

Once this Notice and Questionnaire is executed by the Selling Shareholder and received by GAMCO's counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of GAMCO and the Selling Shareholder (with respect to the Registrable Securities beneficially owned by such Selling Shareholder and listed in Item (3) above.  This Agreement shall be governed in all respects by the laws of the State of New York.

  

A-3

  

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

 

	
Dated:  

	  	  	  
	  	  	  	  
	  	  	  	
Selling Shareholder

	  	  	  	  
	  	  	  	  
	  	  	  	
By:  

	  
	  	  	  	
Name:

	  	  	  	
Title:

 

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO GAMCO'S COUNSEL AT:

 

A-4

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