-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VjU1T1xt1jpg2n2Y4d7c6WguKbvafp5/9/3MxKYBRl2o0Dxag5aFX/nax2vddWg9 Y5OKAvqwyGoXvBj2KZ20VQ== 0000950131-02-002413.txt : 20020618 0000950131-02-002413.hdr.sgml : 20020618 20020618172444 ACCESSION NUMBER: 0000950131-02-002413 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20020618 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GATX FINANCIAL CORP CENTRAL INDEX KEY: 0000357019 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE LESSORS [6172] IRS NUMBER: 941661392 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-86212-01 FILM NUMBER: 02681772 BUSINESS ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661-3676 BUSINESS PHONE: 4159553200 FORMER COMPANY: FORMER CONFORMED NAME: GATX CAPITAL CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: GATX LEASING CORP DATE OF NAME CHANGE: 19900405 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GATX CORP CENTRAL INDEX KEY: 0000040211 STANDARD INDUSTRIAL CLASSIFICATION: TRANSPORTATION SERVICES [4700] IRS NUMBER: 361124040 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-86212 FILM NUMBER: 02681773 BUSINESS ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661 BUSINESS PHONE: 3126216200 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL AMERICAN TRANSPORTATION CORP DATE OF NAME CHANGE: 19750722 S-3/A 1 ds3a.txt AMENDMENT #1 TO FORM S-3 As filed with the Securities and Exchange Commission on June 18, 2002 Registration No. 333-86212 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 ----------------- GATX CORPORATION GATX FINANCIAL CORPORATION (Exact names of registrants as specified in their charters) ----------------- New York 36-1124040 Delaware 94-1661392 (State of Incorporation) (I.R.S. Employer Identification No.) 500 West Monroe Street Chicago, Illinois 60661 (312) 621-6200 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) ----------------- Ronald J. Ciancio General Counsel GATX Corporation 500 West Monroe Street Chicago, Illinois 60661 (312) 621-6200 (Name, address, including zip code, and telephone number, including area code, of agent for service) ----------------- Copy to: David A. Schuette Mayer, Brown, Rowe & Maw 190 South LaSalle Street Chicago, Illinois 60603 (312) 701-7363 ----------------- Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [_] The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED JUNE 18, 2002 PROSPECTUS $175,000,000 GATX Corporation 7.5% Convertible Senior Notes due 2007 Fully and Unconditionally Guaranteed by GATX Financial Corporation and Shares of Common Stock issuable upon conversion of the Senior Notes This prospectus relates to: . $175,000,000 aggregate principal amount of our 7.5% convertible senior notes due 2007; and . the shares of our common stock issuable upon conversion of the notes (5,133,471 shares based on the initial conversion price). We originally issued the notes on February 1, 2002. The initial purchasers resold the notes to qualified institutional buyers in accordance with Rule 144A under the Securities Act. The notes and the common stock that are offered for resale by this prospectus are offered for the accounts of their current holders, who we refer to as the selling holders. The selling holders may sell the notes and the common stock issuable upon conversion of the notes directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions. The notes and the common stock may be sold in one or more transactions at fixed prices, prevailing market prices at the time of sale, prices related to the prevailing market prices, varying prices determined at the time of sale or negotiated prices. We will not receive any of the proceeds from the sale of the notes or the common stock by the selling holders. The notes are currently eligible for trading in the Private Offerings, Resales and Trading through Automatic Linkages Market commonly referred to as the Portal Market. Our common stock is listed on the New York Stock Exchange under the symbol "GMT." The last reported price of our common stock on June 17, 2002 was $31.96 per share. Investing in the notes and our common stock involves risks. See "Risk Factors" beginning on page 5. ----------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. ----------------- The date of this Prospectus is June , 2002 TABLE OF CONTENTS
Page ---- SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION....................... i SUMMARY.................................................................. 1 RISK FACTORS............................................................. 5 USE OF PROCEEDS.......................................................... 8 RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS 8 SELLING HOLDERS.......................................................... 9 DESCRIPTION OF NOTES..................................................... 11 DESCRIPTION OF CAPITAL STOCK............................................. 24 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS.................. 26 PLAN OF DISTRIBUTION..................................................... 32 LEGAL MATTERS............................................................ 33 EXPERTS.................................................................. 33 WHERE YOU CAN FIND MORE INFORMATION...................................... 33
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION This prospectus and the documents incorporated by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements are identified by words such as "anticipate," "believe," "estimate," "expects," "intend," "predict," or "project" and similar expressions. This information may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the Risk Factors section below for a discussion of these risks and uncertainties. We undertake no obligation to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed herein might not occur. i SUMMARY This summary highlights information contained elsewhere or incorporated by reference in this prospectus. This is not intended to be a complete description of the matters covered in this prospectus and is subject to and qualified in its entirety by reference to the more detailed information and financial statements (including the notes thereto) appearing elsewhere or incorporated by reference in this prospectus. Unless the context otherwise requires, references to "we," "us" and "GATX" are to GATX Corporation and its consolidated subsidiaries. The Company Company Overview During 2000 and 2001, we redefined our strategic focus and undertook certain initiatives to position ourselves as a specialized finance and leasing company. To accomplish this goal, a decision was made to exit the businesses of the former GATX Integrated Solution Group (ISG) segment. As of December 31, 2001, we had substantially completed the sale of these ISG businesses. The ISG segment was comprised of GATX Terminals Corporation, GATX Logistics, Inc. and minor business development efforts. We are headquartered in Chicago, Illinois and provide our services and products through two operating segments: Financial Services and GATX Rail. Through these businesses, we combine asset knowledge and services, structuring expertise, partnering and risk capital to serve customers and partners worldwide. We specialize in railcar and locomotive leasing, aircraft leasing, information technology leasing, venture leasing and finance, and the leasing and portfolio management of other large ticket assets. In prior years, the Financial Services segment included a rail business unit, which leased freight cars and locomotives under operating and finance leases. In 2001, we combined into one segment the rail business unit of Financial Services with GATX Rail, a full service lessor of railcars, primarily tank cars. In August 2001, we completed a realignment of the legal structure of our subsidiary companies. The new structure combined our principal subsidiaries, GATX Rail Corporation and GATX Capital Corporation, into a single legal entity that was renamed GATX Financial Corporation. At December 31, 2001, we had on balance sheet assets of $6.1 billion, primarily operating assets such as railcars, commercial aircraft and information technology equipment. In addition, we utilize approximately $1.6 billion of other assets, such as railcars and aircraft, which were financed with operating leases and therefore are not recorded on the balance sheet. Financial Services Financial Services provides financing for equipment and other capital assets on a worldwide basis. These financings, which are held within Financial Services' own portfolio and through partnerships with co-investors, are structured as lease and secured loans, and frequently include interests in an asset's residual value and warrants of non-public companies. Financial Services also generates fee-based income through transaction structuring and portfolio management services. Fees are earned at the time a transaction is completed, an asset is remarketed, and/or on an ongoing basis in the case of portfolio management activities. Headquartered in San Francisco, California, Financial Services consists of four business units: Air, Technology, Venture Finance and Specialty Finance. 1 The Air business unit primarily leases newer, narrow-body aircraft used by commercial airlines throughout the world. Financial Services has an interest in 173 aircraft. Of these, 24 aircraft are wholly owned by Financial Services and the remainder are owned in combination with other investors. All of the 173 aircraft are in compliance with generally applicable noise standards (Stage III) and have an average age of approximately nine years. These aircraft have an estimated useful life of approximately 25 years. For aircraft currently on lease, the average remaining lease term is approximately four years. Financial Services' customer base is diverse in carrier type and geographic location. Financial Services leases to over 50 airlines in 20 countries and is not highly dependent on any one airline; no single customer exposure exceeds 10% of the net book value of the total air portfolio (including off balance sheet assets). Financial Services purchases its aircraft from two manufacturers, Airbus Industrie and The Boeing Company. The Technology business unit provides lease financing and asset management services related to information technology (IT) equipment, primarily to Fortune 1000 companies, including companies within the professional services, healthcare, industrial and food industries. The equipment leased to customers includes personal computers, servers, mainframes and mid-range equipment. Financial Services purchases equipment from a number of manufacturers and vendors and is therefore not dependent on a single provider. In 2001, Financial Services acquired a portfolio of IT equipment leases from El Camino Resources for approximately $372.5 million, including the assumption of $256.0 million of nonrecourse debt. IT equipment is typically depreciated over the lease term, which is approximately 2-5 years. The average size of an IT lease transaction is approximately $200,000. Financial Services is not dependent on any single customer. The Venture Finance business unit provides secured loan and lease financing to early-stage, venture-backed companies. The financing is typically secured by specific equipment and/or by a lien on the customer's property, including intellectual property. Additionally, the financings frequently include warrants of non-public companies. In recent years, the Venture Finance portfolio included leases and loans to a number of telecommunication (telecom) companies. However, due to the poor performance of the telecom market, Venture Finance has exited the telecom financing business and has reduced its exposure to $20.3 million. Currently, Venture Finance has a highly diversified portfolio and provides financings to customers in a variety of industries, including pharmaceutical and life sciences, software and network equipment, and other business services. Venture capital firms are a critical source of new financings and Financial Services has long-standing relationships with leading venture capital firms. Financial Services typically limits transaction size to an average of $2.0 million per customer, and is therefore not dependent on, nor has concentration of risk with respect to, any single customer. The Specialty Finance business unit acts as an investor, arranger and manager of financing services involving a variety of asset types and industries, with an established presence in the marine business. Specialty Finance also manages $1.1 billion of assets for third-party clients. The majority of these managed assets are in markets in which Financial Services has a high level of expertise, such as air and rail. In addition, Financial Services, through American Steamship Company, operates a fleet of self-unloading vessels on the Great Lakes. Financial Services primarily competes with captive leasing companies, leasing subsidiaries of commercial banks, independent leasing companies, lease brokers, investment bankers, financing arms of equipment manufacturers, and other Great Lakes captive and commercial fleets. In addition to its San Francisco home office, Financial Services has 7 domestic and 7 foreign offices. GATX Rail GATX Rail (Rail) is headquartered in Chicago, Illinois and is principally engaged in leasing rail equipment, including tank cars, freight cars and locomotives. Rail provides both full service leases and net leases. Under a net lease, the lessee is responsible for maintenance, insurance and taxes. Under its full service leases, Rail 2 maintains and services its railcars, pays ad valorem taxes, and provides many ancillary services. Rail owns, or has an interest in, approximately 164,000 railcars worldwide. As of December 31, 2001, Rail owned or had an interest in approximately 129,000 railcars in North America, comprised of 71,000 tank cars and 58,000 specialized freight cars. Rail's fleet has a depreciable life of 20 to 38 years and an average age of approximately 16 years. The utilization rate of Rail's wholly owned North American railcar fleet at December 31, 2001 was approximately 91%. Rail also owns or has an interest in approximately 900 locomotives. The utilization rate for Rail's locomotives at December 31, 2001 was 82%. In March 2001, Rail purchased Dyrekcja Eksploatacji Cystern (DEC), Poland's national tank car fleet. DEC assets include 11,000 tank cars and a railcar maintenance network. Rail also has an interest in two other European railcar fleets through its investments in affiliated companies. Rail owns a 49.5% interest in KVG Kesselwagen Vermietgesellschaft mbH, a German- and Austrian-based tank car leasing company with approximately 8,000 cars, and a 37.5% interest in AAE Cargo, a freight car lessor headquartered in Switzerland, with approximately 15,000 cars. Additionally, Rail has an interest in 1,300 other railcars. In North America, Rail's customers use its railcars to ship over 900 different commodities, principally chemicals, petroleum, and food products. For 2001, approximately 36% of railcar leasing revenue was attributable to shipments of chemical products, 24% related to shipments of petroleum products, 12% related to shipments of food, and 28% was derived from the railroad industry and the shipment of other products. Rail leases railcars to approximately 700 customers, including major chemical, oil, food, agricultural and railroad companies. No single customer represents more than 3% of total railcar leasing revenue. Rail typically leases new tank cars and specialty freight cars to its customers for terms of approximately four years. Renewals, or extensions of existing leases, are typically for periods ranging from less than a year to seven years with an average lease term of three years. In North America, Rail purchases most of its new railcars from a limited number of manufacturers, including Trinity Industries, Inc., a Texas-based manufacturer, and American Railcar Industries, a Missouri-based manufacturer. Rail operates a network of major service centers with smaller service centers and a fleet of service trucks. Additionally, Rail utilizes independent third-party repair facilities. Two business offices and four service centers in Poland were added as part of the DEC acquisition. The North American full-service tank car and freight car leasing industry is comprised of Rail, Union Tank Car Company, General Electric Railcar Services Corporation, and various financial institutions. At the end of 2001, there were 275,000 tank cars and 1.4 million freight cars owned and leased in the United States. At December 31, 2001, Rail's fleet was approximately 26% of the tank cars in North America and 36% of the leased market; and approximately 3% of the freight cars in North America and 7% of the leased market. As of the year-end 2001, Rail's entire fleet comprised 15% of the total North American leased fleet market. Principal competitive factors include price, service and availability. General GATX was founded in 1898 and is incorporated under the laws of the State of New York. Our corporate office is located at 500 West Monroe Street, Chicago, Illinois 60661 and our telephone number is (312) 621-6200. Our general website address is www.gatx.com. Information contained in any of our websites is not deemed to be a part of this prospectus. 3 Summary of the Securities Guarantee by GATX Financial Corporation............... The notes are fully and unconditionally guaranteed by GATX Financial Corporation, our principal subsidiary. Maturity.................... February 1, 2007, unless earlier repurchased or converted. Interest Payment Dates...... February 1 and August 1 of each year, commencing on August 1, 2002. Conversion Rights........... Holders may convert their notes into our common stock at an initial conversion price of $34.09 per share of common stock at any time, unless we have previously repurchased the notes or unless the notes have matured. We may elect, at our option, to deliver, in lieu of common stock, cash in an amount described in this prospectus under "Description of Notes--Conversion" or any combination of cash and common stock. The conversion price will be subject to adjustment in certain events. Mandatory Redemption........ None. Redemption at the Option of GATX...................... None. Purchase of the Notes at the Option of Holders upon the Occurrence of a Fundamental Change........ Upon a Fundamental Change involving GATX and occurring prior to the maturity of the notes, each holder may require us to repurchase all or a portion of such holder's notes at a repurchase price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the date of repurchase. See "Description of the Notes--Fundamental Change Permits Holders to Require Us to Repurchase Notes" for the definition of the term "Fundamental Change." Ranking..................... The notes are unsecured obligations of ours and rank equally with all of our current and future unsecured senior indebtedness. The guarantee by GATX Financial is an unsecured obligation of GATX Financial and ranks equally with all of its current and future unsecured senior indebtedness. The indenture under which the notes were issued contains no limitation on the amount of indebtedness, including senior or secured indebtedness, that we or our subsidiaries, including GATX Financial, may issue or guarantee. Use of Proceeds............. We will not receive any of the proceeds from the sale of the notes or the common stock by the selling holders. Trading..................... The notes are currently eligible for trading in the Portal Market. Our common stock is listed on the New York Stock Exchange under the symbol "GMT." 4 RISK FACTORS An investment in the notes and the common stock issuable upon conversion of the notes involves a number of risks. You should consider carefully the following information about these risks, together with the other information included or incorporated by reference in this prospectus, before buying the notes or the common stock. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also impair our business operations. We cannot assure you that any of the events discussed in the risk factors below will not occur. If they do, our business, financial condition or results of operations could be materially and adversely affected. In such case, the trading price of our securities could decline, and you might lose all or part of your investment. We are a holding company and have no independent means of producing income, so we are dependent on our subsidiaries to generate the funds necessary to meet our obligations. As a holding company, we are dependent on the earnings and cash flows of, and dividends, distributions, loans or advances from, our subsidiaries, including our principal subsidiary, GATX Financial, to generate the funds necessary to meet our obligations, including the payment of principal of, and interest on, the notes and the payment of dividends on our common stock. Any payment of dividends, distributions, loans or advances by our subsidiaries to us may be subject to statutory or contractual restrictions. GATX Financial is a party to credit facilities and indentures which contain restrictions on the payment of dividends, distributions, loans or advances to us, as well as restrictions on the payment of our debt guaranteed by it. In case of a liquidation or reorganization of our subsidiaries, the notes will be effectively subordinated in right of payment to certain obligations of our subsidiaries. Because each of our subsidiaries is a separate and distinct legal entity, any right we have to receive any of its assets upon liquidation or reorganization, and the consequent right of the holders of the notes to participate in the distribution of, or to realize proceeds from, those assets, would be effectively subordinated to the claims of its creditors. However, because the notes are guaranteed by GATX Financial, the notes and the related guarantee rank equal to GATX Financial's senior unsecured debt and the holders of the notes would be able to participate in any distribution of assets of GATX Financial as if they were holders of senior unsecured debt of GATX Financial, subject to insolvency, fraudulent conveyance or similar laws. The notes and the guarantee will be effectively subordinated to our and GATX Financial's existing and future secured indebtedness to the extent of the assets securing such indebtedness. The notes do not restrict the ability of us or GATX Financial to incur additional indebtedness, including secured indebtedness. Fraudulent conveyance laws may result in the subordination or avoidance of GATX Financial's guarantee of the securities. Our obligations under the notes are guaranteed by GATX Financial as described in this prospectus. Various federal and state fraudulent conveyance laws have been enacted for the protection of creditors and may be utilized by a court of competent jurisdiction to subordinate or avoid all or part of the guarantee issued by GATX Financial. To the extent that a court of competent jurisdiction were to find that GATX Financial incurred the guarantee with the intent to hinder, delay or defraud any present or future creditor or did not receive fair consideration or reasonably equivalent value for issuing its guarantee and: . was insolvent or rendered insolvent because of the issuance of its guarantee; . was engaged or about to engage in a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business; or 5 . intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured, then the court could subordinate or avoid all or part of its guarantee in favor of its other creditors. To the extent that the guarantee issued by GATX Financial is voided as a fraudulent conveyance or held unenforceable for any other reason, the holders of notes may no longer have a claim against GATX Financial and would only be creditors of GATX. We believe that the issuance of the guarantee by GATX Financial was not a fraudulent conveyance. We cannot assure you, however, that a court passing on this question would reach the same conclusion. The market price of our common stock could fluctuate significantly. Our results of operations may vary significantly from quarter to quarter because of the timing of certain events and other factors, including the other risk factors listed in this prospectus. Therefore, you should not rely on our results of operations during any particular quarter as an indication of our results for a full year or any other quarter. In some periods, our results of operations may fall below the expectations of public market analysts and investors. Any shortfall of this kind, even if minor, could cause the market price of our common stock to decline. Recent terrorist attacks or response to such attacks could adversely affect our business. The effects that the terrorist attacks on September 11, 2001, or future events arising as a result of these terrorist attacks, including military or police activities in the United States or abroad, future terrorist activities or threats of such activities, political unrest and instability, riots and protests, could have on the U.S. economy, global financial markets and our business cannot presently be determined with any accuracy. The effects may include, among other things, a permanent decrease in demand for air travel, consolidation in the airline industry, lower utilization of new and existing aircraft, lower aircraft rental rates, impairment of air portfolio assets and fewer available partners for joint ventures. Depending upon the severity, scope and duration of these effects, the impact on our financial position, results of operations, and cash flows could be material. We may not be able to secure adequate financing to fund our operations or contractual commitments. We utilize uncommitted money market lines, commercial paper borrowings, unsecured debt and secured debt to fund our operations and contractual commitments. Since September 11, 2001, the borrowing spreads over treasury securities of our unsecured debt have significantly increased. As a result of recent rating agency downgrades of our long-term and short-term debt ratings, we could incur increased borrowing costs and have greater difficultly accessing the public and private markets for both secured and unsecured debt. The rating agency downgrades have caused us to experience greater difficulty in accessing the commercial paper market. If these events or further deterioration in the capital markets prevent us from accessing these funding sources, our other sources of funds, including our bank facilities and cash flow from operations and portfolio proceeds, may not provide adequate liquidity to fund our operations and contractual commitments. 6 Competition could result in decreased investment income and increased risk of credit losses. We are subject to competition in our aircraft, rail and technology leasing markets. In many cases, the competitors are larger, higher-rated entities that have greater financial resources and access to lower cost capital than we do. These factors permit many competitors to provide financing at lower rates than we can. Our core businesses are reliant upon our customers continuing to lease assets. Our core businesses are reliant upon our customers continuing to lease rather than purchase assets. There are a number of items that factor into a customer's decision to lease or purchase assets, such as tax considerations, balance sheet considerations, and operational flexibility. We have no control over these external considerations and changes in these factors could negatively impact demand for our leasing products. It is difficult to predict whether inflation will continue to have a positive impact on our financial results. Inflation in railcar rental rates as well as inflation in residual values for air and rail equipment have historically benefited our financial results. Positive effects of inflation are unpredictable as to timing and duration depending on market conditions and economic factors. Our assets may become obsolete. Our core assets may be subject to functional or economic obsolescence. Although we believe we are adept at managing obsolescence risk, there is no guarantee that changes in various market fundamentals will not cause unexpected asset obsolescence in the future. Our allowance for possible losses may be inadequate to protect against losses. Our allowance for possible losses may be inadequate if unexpected adverse changes in the economy occur or discrete events adversely affect specific customers, industries or markets. If the allowance for possible losses is insufficient to cover losses in the receivables portfolio, then our future financial position or results of operations could be negatively impacted. We may not be able to procure insurance on a cost-effective basis in the future. The ability to insure our rail and aircraft assets is an important aspect of our ability to manage risk in our core businesses. There is no guarantee that such insurance will be available on a cost-effective basis consistently in the future. We are subject to extensive environmental regulations and our costs of remediation may be materially greater than the remediation costs we have estimated. We are subject to federal and state requirements for protection of the environment, including those for discharge of hazardous materials and remediation of contaminated sites. We routinely assess our environmental exposure, including obligations and commitments for remediation of contaminated sites and assessments of ranges and probabilities of recoveries from other responsible parties. Because of the regulatory complexities and risk of unidentified contaminants on our properties, the potential exists for remediation costs to be materially different from the costs we have estimated. We have been, and may in the future be, involved in various types of litigation. We have from time to time been, and may in the future be, named as a defendant in litigation involving personal injury, property damage and damage to the environment arising out of incidents in which our railcars have been, and may be, involved. Our failure to comply with the regulations of federal and state agencies could negatively affect our profitability. Our air and rail operations are subject to the jurisdiction of a number of federal agencies, including the Department of Transportation. State agencies regulate some aspects of rail operations with respect to health and 7 safety matters not otherwise preempted by federal law. Our failure to comply with the requirements and regulations of these agencies could negatively affect our operations and consequently our profitability. The market for the notes is not active. There is no active trading market for the notes. There can be no assurance that an active market for the notes will develop or, if one does develop, that it will be maintained. If an active market for the notes fails to develop or be sustained, the trading price of the notes could be materially adversely affected. USE OF PROCEEDS We will not receive any of the proceeds from the sale of the notes or the common stock by the selling holders. RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The following table sets forth the ratio of earnings to combined fixed charges and preferred stock dividends of GATX for each of the years 1997 through 2001 and for the three month periods ended March 31, 2001 and 2002.
Three Months Ended March 31, Year Ended December 31, - --------------------------- --------------------------------------------------------------------- 2001 2002 1997 1998 1999 2000 2001 ---- ---- ---- ---- ---- ---- ---- 1.03 1.19 1.74 1.88 1.69 1.00 0.90(1)
- -------- (1) For the year ended December 31, 2001, combined fixed charges and preferred stock dividends exceeded earnings by $31.4 million. The following table sets forth the ratio of earnings to fixed charges of GATX Financial for each of the years 1997 through 2001 and for the three month periods ended March 31, 2001 and 2002.
Three Months Ended March 31, Year Ended December 31, - --------------------------- --------------------------------------------------------------------- 2001 2002 1997 1998 1999 2000 2001 ---- ---- ---- ---- ---- ---- ---- 1.18 1.40 2.04 2.04 1.93 1.13 1.07
The ratio of earnings to fixed charges represents the number of times "fixed charges" are covered by "earnings." "Fixed charges" consist of interest on outstanding debt and amortization of debt discount and expense, adjusted for capitalized interest and one-third (the proportion deemed representative of the interest factor) of operating lease expense. "Earnings" consist of consolidated net income before income taxes and fixed charges, less share of affiliates' earnings, net of distributions received. 8 SELLING HOLDERS We originally issued the notes on February 1, 2002. The notes were resold by the initial purchasers to qualified institutional buyers under Rule 144A under the Securities Act. Selling holders, including their transferees, pledgees or donees or their successors, may from time to time offer and sell pursuant to this prospectus any or all of the notes and the common stock into which the notes are convertible. The following table sets forth information, as of June 17, 2002, with respect to the selling holders and the principal amounts of notes and the number of shares of common stock beneficially owned by each selling holder that may be offered under this prospectus. The information is based on information provided by or on behalf of the selling holders. The selling holders may offer all, some or none of the notes or common stock into which the notes are convertible. Because the selling holders may offer all or some portion of the notes or the common stock, no estimate can be given as to the amount of the notes or common stock that will be held by the selling holders upon termination of any sales. In addition, the selling holders identified below may have sold, transferred or otherwise disposed of all or a portion of their notes or common stock since the date on which they provided the information regarding their notes or common stock in transactions exempt from the registration requirements of the Securities Act. Except as described in the footnotes to the following table, no selling holder named in the table below beneficially owns (or upon conversion of the notes would own) one percent or more of our common stock assuming conversion of a selling holder's notes. Information about the selling holders may change over time. Any changed information will be set forth in prospectus supplements.
Principal Amount of Notes Numbers of Shares of Beneficially Common Stock Name of Selling Holder Owned that may be sold that may be sold(1) ---------------------- ---------------------- -------------------- Allstate Life Insurance Company..................... $ 1,000,000 29,334 Amaranth LLC........................................ 3,200,000 93,869 Amerisure Mutual Insurance Company.................. 140,000 4,106 Aristeia International Limited...................... 7,600,000 222,939 Aristeia Trading LLC................................ 2,400,000 70,401 BGI Global Investors................................ 210,000 6,160 BFS US Special Opportunities Trust PLC.............. 600,000 17,600 Bancroft Convertible Fund, Inc...................... 750,000 22,000 Bank Austria Cayman Islands, Ltd.................... 1,250,000 36,667 CC Investments, LDC................................. 1,000,000 29,334 California State Auto Association Inter Insurance... 225,000 6,600 California State Auto Association Retirement Pension 50,000 1,466 Canyon Capital Arbitrage Master Fund, Ltd........... 1,500,000 44,001 Canyon Mac 18, Ltd. (RMF)........................... 250,000 7,333 Canyon Value Realization Fund (Cayman), Ltd......... 2,250,000 66,001 Canyon Value Realization Fund, L.P.................. 1,000,000 29,334 Coastal Convertibles Ltd............................ 1,250,000 36,667 Cobra Fund U.S.A., L.P.............................. 125,000 3,666 Cobra Master Fund, Ltd.............................. 625,000 18,333 CompSource Oklahoma................................. 50,000 1,466 Context Convertible Arbitrage Fund, LP.............. 410,000 12,026 Convertible Securities Fund......................... 125,000 3,666 DKR Fixed Income Holding Fund Ltd................... 5,000,000 146,670 Deutsche Bank Securities Inc.(2).................... 23,720,000 695,805 Ellsworth Convertible Growth and Income Fund, Inc... 750,000 22,000 Equity & Convertible Fund........................... 420,000 12,320 First Union Securities Inc.......................... 2,550,000 74,801 Forest Alternative Strategies II.................... 70,000 2,053 Forest Fulcrum Fund L.L.P........................... 850,000 24,933 Forest Global Convertible Fund Series A-5........... 3,520,000 103,256 Georgia Municipal Employees Retirement Trust Fdn.... 265,000 7,773
9
Principal Amount of Notes Numbers of Shares of Beneficially Common Stock Name of Selling Holder Owned that may be sold that may be sold(1) ---------------------- ---------------------- -------------------- HBK Master Fund L.P................................. 7,750,000 227,339 HFR CA Select Fund.................................. $ 400,000 11,733 JMG Convertible Investments, LP..................... 1,500,000 44,001 JMG Triton Offshore Fund, Ltd....................... 1,500,000 44,001 JP Morgan Securities Inc.(3)........................ 6,520,000 191,258 KBC Financial Products USA Inc...................... 500,000 14,667 KD Convertible Arbitrage Fund L.P................... 1,000,000 29,334 KD Convertible Fund L.P............................. 2,250,000 66,001 LDG Limited......................................... 500,000 14,667 LLT Limited......................................... 250,000 7,333 Lyxor Master Fund................................... 1,120,000 32,854 McMahan Securities Co. L.P.......................... 1,150,000 33,734 Morgan Stanley & Co.(4)............................. 30,000,000 880,023 Nations Convertible Securities Fund................. 5,455,000 160,017 Nicholas Applegate Investment Grade Convertible Fund 5,000 146 Nomura Securities International Inc................. 9,000,000 264,007 Northern Income Equity Fund......................... 500,000 14,667 Oppenheimer Convertible Securities Fund............. 3,000,000 88,002 Public Employees' Retirement Association of Colorado 500,000 14,667 RBC Capital Services Inc............................ 150,000 4,400 RCG Baldwin LP...................................... 136,000 3,989 RCG Halifax Master Fund, Ltd........................ 640,000 18,773 RCG Latitude Master Fund, Ltd....................... 2,300,000 67,468 RCG Multi Strategy, LP.............................. 1,540,000 45,174 Ramius Capital Group................................ 520,000 15,253 Ramius LP........................................... 68,000 1,994 Salomon Smith Barney Inc.(3)........................ 4,675,000 137,136 San Diego County Employees Retirement Association... 2,000,000 58,668 Sunrise Partners LLC................................ 1,300,000 38,134 Sylvan (IMA) Ltd.................................... 550,000 16,133 TQA Master Fund, Ltd................................ 2,000,000 58,668 TQA Master Plus Fund, Ltd........................... 1,000,000 129,334 Teachers Insurance and Annuity Association.......... 4,000,000 117,336 The Class I C Company............................... 1,750,000 51,334 UFJ Investments Asia Limited........................ 500,000 14,667 Victory Convertible Securities Fund................. 410,000 12,026 WPG Convertible Arbitrage Overseas Master Fund, L.P. 3,000,000 88,002 Zazore Convertible Arbitrage Fund L.P............... 400,000 11,733 Zazore Hedged Convertible Fund L.P.................. 3,000,000 88,002 Zazore Income Fund L.P.............................. 2,100,000 61,601 Zurich Institutional Benchmark Master Fund Limited.. 500,000 14,667 Zurich Institutional Benchmarks Master Fund Ltd..... 2,500,000 73,335 Zurich Master Hedge Fund............................ 280,000 8,213
- -------- (1) Assumes conversion of all of the selling holders' notes at a conversion price of $34.09 per share. This conversion price is subject to adjustment as described under "Description of Notes--Conversion." As a result, the amount of common stock issuable upon conversion of the notes may increase or decrease in the future. (2) Assuming the conversion of all of the notes held by Deutsche Bank Securities Inc., such selling holder would beneficially own approximately 1.4% of our common stock. (3) JP Morgan Securities Inc. and Salomon Smith Barney Inc. were among the initial purchasers of the notes. (4) Assuming the conversion of all of the notes held by Morgan Stanley & Co., such selling holder would beneficially own approximately 1.8% of our common stock. 10 DESCRIPTION OF NOTES We issued the notes under an indenture dated as of February 1, 2002 among us, GATX Financial Corporation and JPMorgan Chase Bank, as trustee. A copy of the indenture and the registration rights agreement referred to below are filed as exhibits to the registration statement that we filed with the SEC of which this prospectus forms a part. The following is a summary of certain provisions of the indenture and the registration rights agreement and does not purport to be complete. Reference should be made to all provisions of the indenture and the registration rights agreement, including the definitions of certain terms contained therein. As used in this section, the terms "we," "us" and "our" refer to GATX Corporation, but not any of our subsidiaries, unless the context requires otherwise. General The notes: . are our unsecured obligations and rank equally with any and all unsecured senior indebtedness that we may issue in the future; . are limited to $175,000,000 aggregate principal amount; . mature on February 1, 2007; and . will be issued in denominations of $1,000 and integral multiples of $1,000 in fully registered form. The notes are exchangeable and transfers of the notes will be registrable without charge, but we may require payment of a sum sufficient to cover any tax or other governmental charge in connection with such exchanges or transfers. The notes accrue interest at a rate of 7.5% per annum from February 1, 2002, or from the most recent interest payment date to which interest has been paid or duly provided for. We will pay accrued and unpaid interest semi-annually in arrears on February 1 and August 1 of each year, beginning August 1, 2002. We will pay interest to the person in whose name a note is registered at the close of business on the January 15 or July 15 (which we refer to as the "record dates") immediately preceding the relevant interest payment date. However, in the case of a note or portion of a note repurchased in connection with a Fundamental Change (as defined below) on a repurchase date, during the period from a record date to (but excluding) the next succeeding interest payment date, accrued interest will be payable (unless such note or portion is converted) to the holder of the note or portion of a note repurchased. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and the actual number of days elapsed in any partial month. Principal of and interest on the notes will be payable at the office or agency maintained for such purpose or, at our option, payment of interest may be made by check mailed to the holders of the notes at their respective addresses set forth in the register of holders of notes. Until otherwise designated by us, the office or agency maintained for such purpose will be the principal corporate trust office of the trustee. Guarantee by GATX Financial The notes are fully and unconditionally guaranteed by GATX Financial, our principal subsidiary. This guarantee is an unsecured obligation of GATX Financial and ranks equally with all of its current and future unsecured senior indebtedness. Conversion Subject to the conditions described below (including our right to pay cash upon conversion of the notes), holders may convert their notes into our common stock at an initial conversion price of $34.09 per share at any 11 time, unless we have previously repurchased the notes or unless the notes have matured. A holder may convert fewer than all of such holder's notes so long as the notes converted are an integral multiple of $1,000 principal amount. Except as described below, no adjustment will be made on conversion of any notes for interest or liquidated damages, if any, accrued on such notes or for dividends on any common stock issued. If notes are converted after a record date for the payment of interest and prior to the next succeeding interest payment date, they must be accompanied by funds equal to the interest and liquidated damages, if any, payable on such succeeding interest payment date on the principal amount so converted. The right of conversion attaching to any note may be exercised by the holder by delivering the note at the specified office of a conversion agent, accompanied by a duly signed and completed notice of conversion, together with any funds that may be required. Such notice of conversion can be obtained from the trustee. Beneficial owners of interests in a global note may exercise their right of conversion by delivering to the Depository Trust Company (which we refer to as "DTC") the appropriate instruction form for conversion pursuant to DTC's conversion program. The conversion date will be the date on which the note, the duly signed and completed notice of conversion and any funds that may be required as described above shall have been so delivered. A holder delivering a note for conversion will not be required to pay any taxes or duties payable in respect of the issue or delivery of common stock on conversion, but will be required to pay any tax or duty which may be payable in respect of any transfer involved in the issue or delivery of the common stock in a name other than the holder of the note. Certificates representing shares of common stock will not be issued or delivered unless all taxes and duties, if any, payable by the holder have been paid. So long as no event of default has occurred and is continuing, in lieu of delivery of shares of common stock upon notice of conversion of any notes (for all or any portion of the notes), we may elect to pay holders surrendering notes an amount in cash per note equal to (1) the average Sale Price (as defined below) of our common stock for the five consecutive trading days immediately following the date of our notice of our election to deliver cash as described below multiplied by (2) the number of shares of our common stock the holder would otherwise be entitled to receive upon conversion. We will inform the holders through the trustee no later than two business days following the conversion date of our election to deliver shares of common stock or to pay cash in lieu of delivery of the shares; provided, that our right to pay cash in lieu of delivery of common stock for notes submitted for conversion on or after the second business day preceding the maturity date is conditioned on our having notified holders of our intention to pay cash not later than the fourth business day preceding the maturity date. If we elect to deliver all of such payment in shares of common stock, the shares will be delivered through the trustee no later than the fifth business day following the conversion date. If we elect to pay all or a portion of such payment in cash, the payment, including any delivery of common stock, will be made to holders surrendering notes no later than the tenth business day following the applicable conversion date. Except upon the occurrence of an event of default, we may not change our election with respect to the consideration to be delivered upon conversion of a note once we have provided the notice described above. If an event of default, as described under "--Events of Default" below (other than a default in a cash payment upon conversion of the notes), has occurred and is continuing, we may not pay cash upon conversion of any notes (other than cash in lieu of fractional shares). We are not required to issue fractional shares of common stock upon conversion of notes and, in lieu of such fractional shares, we will pay a cash adjustment based upon the average Sale Price of the common stock as described in the previous paragraph. The "Sale Price" of the common stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported in composite transactions for the principal United States securities exchange on which the common stock is traded or, if the common stock is not listed on a 12 United States national or regional securities exchange, as reported by the Nasdaq System, appropriately adjusted to take into account the occurrence since the conversion date of an event that would result in an adjustment of the conversion price. The conversion price is subject to adjustment (under formulae set forth in the indenture) in certain events, including: (i) the issuance of common stock as a dividend or distribution on common stock; (ii) certain subdivisions and combinations of the common stock; (iii) the issuance to all or substantially all holders of common stock of certain rights or warrants to purchase common stock at a price per share less than the current market price (as defined in the indenture); (iv) the dividend or other distribution to all holders of common stock of shares of our capital stock (other than common stock) or evidences of our indebtedness or assets (including securities, but excluding those rights, warrants, dividends and distributions referred to above or paid exclusively in cash); (v) dividends or other distributions consisting exclusively of cash (excluding any cash portion of distributions referred to in clause (iv) or cash distributed upon a merger, share exchange or consolidation to which the succeeding paragraph applies) to all holders of common stock to the extent such distributions, combined together with: . all such all-cash distributions made within the preceding 12 months in respect of which no adjustment has been made plus . any cash and the fair market value of other consideration payable in respect of any tender offers by us or any of our subsidiaries for common stock concluded within the preceding 12 months in respect of which no adjustment has been made, exceeds 10% of our market capitalization (being the product of the then current market price of the common stock times the number of shares of common stock then outstanding) on the record date for such distribution; and (vi) the purchase of common stock pursuant to a tender offer made by us or any of our subsidiaries to the extent that the aggregate consideration, together with . any cash and the fair market value of any other consideration payable in any other tender offer expiring within 12 months preceding such tender offer in respect of which no adjustment has been made plus . the aggregate amount of any such all-cash distributions referred to in clause (v) above to all holders of common stock within the 12 months preceding the expiration of such tender offer in respect of which no adjustments have been made, exceeds 10% of our market capitalization on the expiration of such tender offer. We may, instead of making any required adjustment in the conversion price under clause (iv) or (v), make proper provision so that each holder of notes who converts a note shall be entitled to receive upon conversion, in addition to the shares of common stock or cash paid on conversion, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution and, in the case of clause (v), interest accrued as a consequence of the investment, in U.S. Government obligations with a maturity of not more than three months, of the cash amount that the holder would have been so entitled to receive. In the case of: . any reclassification or change of our common stock or . a consolidation, merger, share exchange or combination involving us or a sale or conveyance to another corporation of our property and assets as an entirety or substantially as an entirety, 13 in each case as a result of which holders of our common stock will be entitled to receive stock, other securities, other property or assets (including cash) with respect to or in exchange for our common stock, the holders of the notes then outstanding will be entitled thereafter to convert such notes into the kind and amount of shares of stock, other securities or other property or assets, which they would have owned or been entitled to receive upon such reclassification, change, consolidation, merger, share exchange, combination, sale or conveyance, had such notes been converted into common stock immediately prior to such reclassification, change, consolidation, merger, share exchange, combination, sale or conveyance (assuming, in a case in which our shareholders may exercise rights of election, that a holder of notes would not have exercised any rights of election as to the stock, other securities or other property or assets receivable in connection therewith and received per share the kind and amount received per share by a plurality of non-electing shares). Certain of the foregoing events may also constitute or result in a Fundamental Change requiring us to offer to repurchase the notes. See "--Fundamental Change Permits Holders to Require Us to Repurchase Notes." In the event of a taxable distribution to holders of common stock, or other transaction, that results in any adjustment of the conversion price, the holders of notes may, in certain circumstances, be deemed to have received a distribution subject to United States income tax as a dividend; in certain other circumstances, the absence of such an adjustment may result in a taxable dividend to the holders of our common stock. See "Certain United States Federal Income Tax Considerations." We may, from time to time, to the extent permitted by law, reduce the conversion price of the notes by any amount for any period of at least 20 days, in which case we shall give at least 15 days' notice of such decrease, if our board of directors has made a determination that such decrease would be in our best interests, which determination will be conclusive. We may, at our option, make such reductions in the conversion price, in addition to those set forth above, as our board of directors deems advisable to avoid or diminish any income tax to holders of common stock resulting from any dividend or distribution of stock or rights to acquire stock or from any event treated as such for income tax purposes. See "Certain United States Federal Income Tax Considerations." No adjustment in the conversion price will be required unless such adjustment would require a change of at least 1% of the conversion price then in effect. However, any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. Except as stated above, the conversion price will not be adjusted for the issuance of common stock or any securities convertible into or exchangeable for common stock or carrying the right to purchase any of the foregoing. Fundamental Change Permits Holders to Require Us to Repurchase Notes If a Fundamental Change (as defined below) occurs prior to the maturity of the notes, each holder will have the right to require us to repurchase any or all of the holder's notes. The notes may be repurchased in multiples of $1,000 principal amount. The repurchase price will be equal to 100% of the principal amount of the notes plus accrued and unpaid interest and liquidated damages, if any, to the date of repurchase. A "Fundamental Change" occurs if: . our common stock (or other common stock into which the notes are convertible) is no longer traded on the New York Stock Exchange or the Nasdaq National Market; . we consolidate with or merge into another person (other than a subsidiary); . any person (other than a subsidiary) consolidates with or merges into GATX; . we, or we and our subsidiaries taken as a whole, sell, convey, transfer or lease our properties and assets substantially as an entirety to any person (other than to one or more of our subsidiaries); . any "person" or "group" (as such terms are used in Section 13(d) and 14(d) of the Securities Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 and 13d-5 under the Securities 14 Exchange Act) of shares representing more then 50% of the combined voting power of our then outstanding voting stock; or . our outstanding common stock is reclassified into, exchanged for or converted into the right to receive any other property or security. However, none of these circumstances will be a Fundamental Change if at least 90% of the aggregate fair market value (as determined by our board of directors) of the property and securities received by holders of our common stock in respect of such common stock in such transaction, other than cash payments for fractional shares, consists of shares of voting common stock of the surviving person (or its parent) that are, or upon issuance will be, traded on a United States national securities exchange or approved for trading on an established automated over-the-counter trading market in the United States. On or before the 30th day after the occurrence of a Fundamental Change, we will mail to all holders of record of the notes (and to beneficial owners as required by law) a notice of the occurrence of the Fundamental Change and of the resulting repurchase right. We will also deliver to the trustee a copy of the notice. The notice will state among other things: . a brief description of the events causing the Fundamental Change; . the repurchase price and date; and . the procedures that holders must follow to require us to repurchase their notes. To exercise the repurchase right, holders of notes must deliver, on or before the 60th day after the date of our notice of a Fundamental Change, a repurchase notice electing to require us to repurchase notes which shall state: . the certificate numbers of the holder's notes to be delivered for repurchase; and . the portion of the principal amount of notes to be repurchased, which must be $1,000 or an integral multiple of $1,000. Any repurchase notice may be withdrawn by the holder by a written notice of withdrawal delivered to the paying agent prior to the close of business on the repurchase date. The notice of withdrawal shall state: . the principal amount being withdrawn; . the certificate numbers of the notes being withdrawn; and . the principal amount of the notes that remains subject to the repurchase notice, if any. In connection with the repurchase of the notes in the event of a Fundamental Change, we will comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Securities Exchange Act which may then be applicable. Payment of the repurchase price for a note for which a repurchase notice has been delivered and not validly withdrawn is conditioned upon book-entry transfer or delivery of the note, together with necessary endorsements, to the paying agent at any time after delivery of the repurchase notice. Payment of the repurchase price for the notes will be made promptly following the later of the repurchase date or the time of book-entry transfer or physical delivery of the notes. If the paying agent holds money sufficient to pay the repurchase price of a note on the business day following the repurchase date in accordance with the terms of the indenture, then, immediately after the 15 repurchase date, the note will cease to be outstanding and interest on such note, will cease to accrue, whether or not book-entry transfer is made or the note is delivered to the paying agent. Thereafter, all other rights of the holder shall terminate other than the right to receive the purchase price upon delivery of the note. The repurchase rights of the holders of notes could discourage a potential acquiror of GATX. The Fundamental Change repurchase feature, however, is not the result of management's knowledge of any specific effort to obtain control of GATX by any means or part of a plan by management to adopt a series of anti-takeover provisions. The term Fundamental Change is limited to specified transactions and may not include other events that might adversely affect our financial condition. In addition, the requirement that we offer to repurchase the notes upon a Fundamental Change may not protect noteholders in the event of a highly leveraged transaction, reorganization, merger or similar transaction involving us. Our ability to repurchase notes may be limited by the terms of our then existing indebtedness or financial agreements. No notes may be repurchased at the option of holders upon a Fundamental Change if there has occurred and is continuing an event of default described under "--Events of Default and Remedies" below. However, notes may be repurchased if the event of default is in the payment of the Fundamental Change repurchase price with respect to the notes. Merger and Consolidation The indenture provides that we may not, in a single transaction or a series of related transactions, consolidate or merge with or into, or effect a share exchange with (whether or not we are the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our properties or assets in one or more related transactions to, another corporation, person or entity as an entirety or substantially as an entirety unless either . (i) we shall be the surviving or continuing corporation or (ii) the entity or person formed by or surviving any such consolidation, merger or share exchange (if other than us) or the entity or person which acquires by sale, assignment, transfer, lease, conveyance or other disposition our properties and assets substantially as an entirety (x) is a corporation organized and validly existing under the laws of the United States, any State thereof or the District of Columbia and (y) assumes the due and punctual payment of the principal of, and interest on all the notes and the performance of each of our covenants under the notes and the indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the trustee; . immediately after such transaction no default or event of default exists; and . we or such successor person shall have delivered to the trustee an officers' certificate and an opinion of counsel, each stating that such transaction and the supplemental indenture comply with the indenture and that all conditions precedent in the indenture relating to such transaction have been satisfied. For the purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more of our subsidiaries, the capital stock of which constitutes all or substantially all of our properties and assets, will be deemed to be the transfer of all or substantially all of our properties and assets. Upon any such consolidation, merger, share exchange, sale, assignment, conveyance, lease, transfer or other disposition in accordance with the foregoing, the successor person formed by such consolidation or share exchange or into which we are merged or to which such sale, assignment, conveyance, lease, transfer or other 16 disposition is made will succeed to, and be substituted for, and may exercise our right and power, under the indenture with the same effect as if such successor had been named as us in the indenture, and thereafter (except in the case of a sale, assignment, transfer, lease, conveyance or other disposition) the predecessor corporation will be relieved of all further obligations and covenants under the indenture and the notes. Registration Rights Pursuant to a registration rights agreement that we entered into with the initial purchasers of the notes, we have filed with the SEC a shelf registration statement, of which this prospectus is a part, covering resales by holders of the notes and the common stock issued upon conversion of the notes. We have agreed to use our reasonable best efforts to keep the shelf registration statement continuously effective under the Securities Act until the earliest of . February 1, 2004; . the date on which the notes or the common stock issuable upon their conversion may be sold by non-affiliates of us pursuant to paragraph (k) of Rule 144 (or any successor provision) promulgated by the SEC under the Securities Act; . the date as of which all the notes or the common stock issuable upon their conversion have been sold under Rule 144 under the Securities Act (or any similar provision then in force); and . the date as of which all the notes or the common stock issuable upon their conversion have been sold pursuant to the shelf registration statement. If the shelf registration statement shall cease to be effective (without being succeeded immediately by a replacement shelf registration statement filed and declared effective) or usable for the offer and sale of transfer restricted securities for a period of time (including any suspension period) which exceeds 60 days in the aggregate in any 12-month period prior to February 1, 2004 (which we refer to as a "registration default"), we will pay liquidated damages to each holder of transfer restricted securities which has complied with its obligations under the registration rights agreement. The amount of liquidated damages payable during any period in which a registration default has occurred and is continuing is that amount which is equal to . 0.25 percent (or 25 basis points) per annum per $1,000 principal amount of notes or $2.50 per annum per 29.334 shares of our common stock (subject to adjustment in the event of a stock split, stock recombination, stock dividend and the like) constituting transfer restricted securities, for the first 90 days during which a registration default has occurred and is continuing; and . 0.50 percent (or 50 basis points) per annum per $1,000 principal amount of notes or $5.00 per annum per 29.334 shares of our common stock (subject to adjustment as set forth above) constituting transfer restricted securities for any additional days during which such registration default has occurred and is continuing. We have agreed to pay all accrued liquidated damages by wire transfer of immediately available funds or by federal funds check on each damages payment date (as defined in the registration rights agreement). Following the cure of a registration default, liquidated damages will cease to accrue with respect to such registration default. "Transfer restricted securities" means each note and any share of our common stock issued or issuable on conversion thereof until the date on which such note or share, as the case may be: . has been transferred pursuant to the shelf registration statement or another registration statement covering such note or share which has been filed with the SEC pursuant to the Securities Act, in either case after such registration statement has become, and while such registration statement is, effective under the Securities Act; 17 . has been transferred pursuant to Rule 144 under the Securities Act (or any similar provision then in force); or . may be sold or transferred pursuant to paragraph (k) of Rule 144 under the Securities Act (or any successor provision promulgated by the SEC). A holder of notes or our common stock issuable upon conversion of the notes that sells such securities pursuant to a shelf registration statement . will be required to be named as a selling security holder in this prospectus and to deliver this prospectus to purchasers; . will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales; and . will be bound by the provisions of the registration rights agreement that are applicable to such holder (including certain indemnification and contribution rights or obligations). We will be permitted to suspend the use of the prospectus which is a part of the shelf registration statement for a period not to exceed 30 days in any three-month period or for three periods not to exceed an aggregate of 60 days in any twelve-month period (both of which we refer to as a "suspension period") under certain circumstances relating to pending corporate developments, public filings with the SEC and similar events. We will pay all expenses of the shelf registration statement. Each holder will be required to bear the expense of any broker's commission, agency fee or underwriter's discount or commission. Events of Default and Remedies Each of the following will constitute an event of default under the indenture: . we fail to pay the principal amount or Fundamental Change repurchase price with respect to any note when such amount becomes due and payable; . we fail to pay interest on the notes when due and such failure continues for 30 days; . we fail to pay liquidated damages owing, as described under "Registration Rights," and such failure continues for 30 days; . we fail to provide timely notice of a Fundamental Change; . we fail to comply with any of our other agreements in the notes or the indenture and such failure continues for 60 days after we receive a written notice of such default by the trustee or by holders of not less than 25% in aggregate principal amount of the notes then outstanding; and . certain events of bankruptcy or insolvency affecting us occur. If an event of default (other than an event of default specified in the last bullet point above) occurs and is continuing, then and in every such case the trustee, by written notice to us, or the holders of not less than 25% in aggregate principal amount of the then outstanding notes, by written notice to us and the trustee, may declare the unpaid principal of and accrued and unpaid interest and liquidated damages, if any, on all the notes then outstanding to be due and payable. Upon such declaration, such principal amount and accrued and unpaid interest and liquidated damages, if any, will become immediately due and payable, notwithstanding anything contained in the indenture or the notes to the contrary. If any event of default specified in the last bullet point above occurs with respect to us, all unpaid principal of, and premium, if any, and accrued and unpaid interest and liquidated damages, if any, on the notes then outstanding will automatically become due and payable without any declaration or other act on the part of the trustee or any holder of notes. 18 Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to the provisions of the indenture relating to the duties of the trustee, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request, order or direction of any of the holders, unless such holders have offered to the trustee security or an indemnity satisfactory to it against any cost, expense or liability. Subject to all provisions of the indenture and applicable law, the holders of a majority in aggregate principal amount of the then outstanding notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee. If a default or event of default occurs and is continuing and is known to the trustee, the indenture requires the trustee to mail a notice of default or event of default to each holder within 60 days of the occurrence of such default or event of default. However, the trustee may withhold from the holders notice of any continuing default or event of default (except a default or event of default in the payment of principal of, interest or liquidated damages, if any, on the notes) if it determines in good faith that withholding notice is in their interest. The holders of a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may rescind any acceleration of the notes and its consequences if all existing events of default (other than the nonpayment of principal of, interest and liquidated damages, if any, on the notes that has become due solely by virtue of such acceleration) have been cured or waived and if the rescission would not conflict with any judgment or decree of any court of competent jurisdiction. No such rescission will affect any subsequent default or event of default or impair any right consequent thereto. The holders of a majority in aggregate principal amount of the notes then outstanding may, on behalf of the holders of all the notes, waive any past default or event of default under the indenture and its consequences, except default in the payment of principal of, or interest or liquidated damages, if any, on the notes (other than the non-payment of principal of, interest and liquidated damages, if any, on the notes that has become due solely by virtue of an acceleration that has been duly rescinded as provided above) or in respect of a covenant or provision of the indenture that cannot be modified or amended without the consent of all holders of notes. We are required to deliver to the trustee annually a statement regarding compliance with the indenture and we are required, upon becoming aware of any default or event of default, to deliver to the trustee a statement specifying such default or event of default. Book-Entry; Delivery and Form; Global Note The notes offered and sold pursuant to this prospectus will be represented by a single, permanent global note in definitive, fully-registered form without interest coupons. The global note will be deposited with the trustee as custodian for DTC and registered in the name of a nominee of DTC in New York, New York for the accounts of participants in DTC. Except in the limited circumstances described below, holders of notes represented by interests in the global note will not be entitled to receive notes in definitive form. DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York Uniform Commercial Code and a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities of institutions that have accounts with DTC (which we refer to as "participants") and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to DTC's book-entry system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, whether directly or indirectly. 19 DTC will credit, on its book-entry registration and transfer system, the respective principal amount of the individual beneficial interests represented by the global note to the accounts of participants. Ownership of beneficial interests in the global note will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in the global note will be shown on, and the transfer of those ownership interests will be effected only through, records maintained by DTC (with respect to participants' interests) and such participants (with respect to the owners of beneficial interests in the global note other than participants). So long as DTC or its nominee is the registered holder and owner of the global note, DTC or such nominee, as the case may be, will be considered the sole legal owner of the notes represented by the global note for all purposes under the indenture and the notes. Except as set forth below, owners of beneficial interests in the global note will not be entitled to receive notes in definitive form and will not be considered to be the owners or holders of any notes under the global note. We understand that under existing industry practice, in the event an owner of a beneficial interest in the global note desires to take any actions that DTC, as the holder of the global note, is entitled to take, DTC would authorize the participants to take such action, and that participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them. No beneficial owner of an interest in the global note will be able to transfer the interest except in accordance with DTC's applicable procedures, in addition to those provided for under the indenture and, if applicable, those of Euroclear and Clearstream. Payments of the principal of, premium, if any, and interest and liquidated damages, if any, on the notes represented by the global note registered in the name of and held by DTC or its nominee will be made to DTC or its nominee, as the case may be, as the registered owner and holder of the global note. We expect that DTC or its nominee, upon receipt of any payment of principal or interest in respect of the global note, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global note as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the global note held through such participants will be governed by standing instructions and customary practices as is now the case with securities held for accounts of customers registered in the names of nominees for such customers. Such payments, however, will be the responsibility of such participants and indirect participants, and neither we, the trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the global note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between DTC and its participants or the relationship between such participants and the owners of beneficial interests in the global note. Unless and until it is exchanged in whole or in part for notes in definitive form, the global note may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC. Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds. Transfers between participants in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures. Cross-market transfers between DTC, on the one hand, and directly or indirectly through Euroclear or Clearstream participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (Brussels time). Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf 20 by delivering or receiving interests in the global note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositaries for Euroclear or Clearstream. Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in the global note from a DTC participant will be credited during the securities settlement processing day (which must be a business day for Euroclear or Clearstream, as the case may be) immediately following the DTC settlement date, and such credit of any transactions interests in the global note settled during such processing day will be reported to the relevant Euroclear or Clearstream participant on such day. Cash received in Euroclear or Clearstream as a result of sales of interests in the global note by or through a Euroclear or Clearstream participant to a DTC participant will be received with value on the DTC settlement date, but will be available in the relevant Euroclear or Clearstream cash account only as of the business day following settlement in DTC. We expect that DTC will take any action permitted to be taken by a holder of notes (including the presentation of notes for exchange as described below) only at the direction of one or more participants to whose account the DTC interests in the global note is credited and only in respect of such portion of the aggregate principal amount of the notes as to which such participant or participants has or have given such direction. However, if there is an event of default under the notes, DTC will exchange the global note for notes in definitive form, which it will distribute to its participants. Although we expect that DTC, Euroclear and Clearstream will agree to the foregoing procedures in order to facilitate transfers of interests in the global note among participants of DTC, Euroclear, and Clearstream, DTC, Euroclear and Clearstream are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their participants or indirect participants of their respective obligations under the rules and procedures governing their operations. If DTC is at any time unwilling to continue as a depositary for the global note and a successor depositary is not appointed by us within 90 days, we will issue notes in fully registered, definitive form in exchange for the global note. Amendment, Supplement and Waiver Except as provided in the next two succeeding paragraphs, the indenture or the notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for notes), and any existing default or compliance with any provision of the indenture or the notes may be waived with the consent of the holders of a majority in principal amount of the then outstanding notes (including consents obtained in connection with a tender offer or exchange offer for notes). Without the consent of each holder affected, an amendment or waiver may not: . reduce the percentage of the principal amount of notes whose holders must consent to an amendment, supplement or waiver; . reduce the principal of or change the fixed maturity of any note; . reduce the rate of or change the time for payment of interest on any notes; . waive a default or event of default in the payment of principal of or interest or liquidated damages, if any, on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration); 21 . make any note payable in money other than that stated in the indenture and the notes; . make any change in the provisions of the indenture relating to waivers of past defaults or the rights of holders of notes to receive payments of principal of or interest or liquidated damages, if any, on the notes; . except as permitted by the indenture, increase the conversion price or modify the provisions of the indenture relating to conversion of the notes in a manner adverse to the holders; or . make any change to the abilities of holders of notes to enforce their rights under the indenture or the foregoing provisions or this provision. Notwithstanding the foregoing, without the consent of any holder of notes, we, GATX Financial and the trustee may amend or supplement the indenture or the notes to . cure any ambiguity, defect or inconsistency or make any other changes in the provisions of the indenture which we and the trustee may deem necessary or desirable, provided such amendment does not materially and adversely affect the notes; . provide for uncertificated notes in addition to or in place of certificated notes; . provide for the assumption of our obligations to holders of notes in the circumstances required under the indenture as described under "--Merger and Consolidation;" . provide for conversion rights of holders of notes in certain events such as our consolidation or merger or the sale of all or substantially all of our assets; . reduce the conversion price; . evidence and provide for the acceptance of the appointment under the indenture of a successor trustee; . make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the indenture of any such holder; or . comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act of 1939. Satisfaction and Discharge We and GATX Financial will be deemed to have discharged our obligations under the indenture while notes remain outstanding if all outstanding notes will become due and payable at their scheduled maturity within one year and we have . deposited with the trustee an amount sufficient to pay and discharge all outstanding notes on the date of their scheduled maturity; and . paid all other sums then payable by us under the indenture. Governing Law The indenture provides that the notes are governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law. Transfer and Exchange A holder may transfer or exchange notes in accordance with the indenture. The registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and we may require a holder to pay any taxes and fees required by law or permitted by the indenture. We are not required to transfer or exchange any note for which a holder has delivered a Fundamental Change repurchase notice. The registered holder of a note will be treated as the owner of it for all purposes. 22 The Trustee The indenture provides that, except during the continuance of an event of default, the trustee will perform only such duties as are specifically set forth in the indenture. In case an event of default shall occur (and shall not be cured) and holders of the notes have notified the trustee, the trustee will be required to exercise its powers with the degree of care and skill of a prudent person in the conduct of such person's own affairs. Subject to such provisions, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request of any of the holders of notes, unless they shall have offered to the trustee security and indemnity satisfactory to it. The indenture contains certain limitations on the rights of the trustee, should it become our creditor, to obtain payment of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions, provided, however, that if it acquires any conflicting interest, it must eliminate such conflict or resign. No Recourse Against Others None of our or GATX Financial's directors, officers, employees, shareholders or affiliates, as such, shall have any liability or any obligations under the notes or the indenture or for any claim based on, in respect of or by reason of such obligations or the creation of such obligations. Each holder by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for the notes. 23 DESCRIPTION OF CAPITAL STOCK Our authorized capitalization is 120,000,000 shares of common stock, par value $.625 per share, and 5,000,000 shares of preferred stock, par value $1.00 per share. Our certificate of incorporation authorizes the issuance of preferred stock from time to time in one or more series with such terms, including dividend rates and preferences, liquidation preferences, voting rights, redemption provisions, conversion privileges, and all such other rights to the extent permitted by New York law, as are determined by resolution of our Board of Directors, without further stockholder action, and which are consistent with the provisions regarding preferred stock set forth in our certificate of incorporation. Pursuant to Section 502 of the New York Business Corporation Law, all shares of preferred stock share ratably in any payments or distributions in the event of non-payment in full of dividends or amounts payable in liquidation. As of December 31, 2001, we had 48,756,223 shares of common stock issued and outstanding, an aggregate of 23,411 shares of preferred stock designated as $2.50 Cumulative Convertible Preferred Stock and $2.50 Cumulative Convertible Preferred Stock, Series B (these series are together referred to herein as "Cumulative Convertible Preferred Stock") issued and outstanding. Holders of the Cumulative Convertible Preferred Stock and common stock are entitled to one vote for each share held. Except in certain specified instances, holders of the Cumulative Convertible Preferred Stock and common stock vote together as a single class. Cumulative Convertible Preferred Stock Holders of both series of Cumulative Convertible Preferred Stock are entitled to receive cumulative cash dividends at the annual rate of $2.50 per share out of surplus legally available for dividends. Each share is convertible at the option of the holder at any time into five shares of common stock. The conversion rate is subject to adjustment upon the occurrence of certain specified events. In the event of our liquidation, dissolution or winding up, the holders of such preferred stock will be entitled to receive $60 per share plus accrued and unpaid dividends to the date of payment. Common Stock The holders of our common stock are entitled to receive dividends when and as declared by our board of directors after full dividends on shares of the outstanding preferred stock for all past dividend periods have been declared and paid or set apart. On liquidation, the holders of our common stock share ratably in the distribution of our assets after payment of preferential amounts to holders of preferred stock. Holders of our common stock have no preemptive rights and no liability to further calls or to assessment by us. The shares of common stock issuable upon conversion of the notes will upon issuance be validly issued, fully paid and nonassessable. ChaseMellon Shareholder Services is the transfer agent and registrar for our common stock. Our common stock is listed on the New York and Chicago Stock Exchanges. Shareholder Rights Plan In July 1998, we adopted a Shareholders Rights Plan which was intended to encourage a potential buyer of GATX to negotiate directly with our board of directors and to provide our board of directors with greater leverage in negotiation so as to provide greater value for our shareholders. Under the terms of the Shareholders Rights Plan, each shareholder of record on August 14, 1998 received a distribution of one right for each share of our common stock then held. The rights will be exercisable only if a person acquires or announces a tender offer which would result in beneficial ownership of 20% or more of our common stock (the date of such acquisition being the "Distribution Date"). The exercise price is $160 per right, subject to adjustment. If a person acquires 24 the beneficial ownership of 20% or more of our common stock, all holders of the rights other than the acquiring person will be entitled to receive, upon exercise of the right at the then current exercise price, shares of our common stock having a value equal to two times the exercise price of the right. We may redeem the rights at $.01 per right at any time before someone becomes a 20% beneficial owner. Until the right is exercised, the holder thereof as such will have no rights as a shareholder of GATX, including, without limitation, the right to vote or receive dividends. The rights will expire on August 14, 2008. 25 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS General This section summarizes the material U.S. federal income tax consequences to holders of notes and the common stock issuable upon their conversion. However, the discussion is limited in the following ways: . The discussion only covers you if you purchased your notes in the initial offering or purchase your notes or common stock in this offering. . The discussion only covers you if you hold your notes or the common stock issuable upon their conversion as capital assets (that is, for investment purposes), and if you do not have a special tax status. . The discussion does not cover tax consequences that depend upon your particular tax situation. . The discussion is based on current law. Changes in the law may change the tax treatment of the notes or the common stock issuable upon their conversion. . The discussion does not cover state, local or foreign law. . We have not requested a ruling from the Internal Revenue Service ("IRS") on the tax consequences of owning the notes or the common stock issuable upon their conversion. As a result, the IRS could disagree with portions of this discussion. You are a U.S. holder for purposes of this discussion if you are a holder of a note or common stock that is, for U.S. federal income tax law purposes: . a citizen or resident of the United States; . a corporation or partnership which is created or organized in or under the laws of the United States or of any political subdivision thereof; . an estate the income of which is subject to United States federal income taxation regardless of its source; or . a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (2) the trust was in existence on August 10, 1996 and properly elected to continue to be treated as a U.S. person. The term "Non-U.S. holder" refers to any beneficial owner of a note or the common stock issuable upon their conversion who or which is not a U.S. holder. If you are a holder of notes or common stock or are considering buying notes or common stock, we urge you to consult your tax advisor about the particular federal, state, local and foreign tax consequences of the acquisition, ownership and disposition of the notes, including the conversion of the notes into common stock, and the application of the U.S. federal income tax laws to your particular situation. Federal Income Tax Consequences of Registration The registration of the notes and the shares of common stock will not result in any income, gain or loss to the holders of the notes or shares of common stock or to GATX. A holder of notes or common stock will continue to have the same basis and holding period in such notes or common stock immediately after the registration as such holder had immediately prior to the registration. U.S. Holders Taxation of Interest. U.S. holders will be required to recognize as ordinary income any interest paid or accrued on the notes, in accordance with their regular method of accounting for U.S. federal income tax 26 purposes. In general, if the terms of a debt instrument entitle a holder to receive payments other than fixed periodic interest that exceed the issue price of the instrument, the holder may be required to recognize additional interest as "original issue discount" over the term of the instrument. We believe that the notes were not issued with original issue discount. We may be required to make additional payments to holders of the notes as liquidated damages if we do not cause the registration statement of which this prospectus forms a part to become effective and continue to remain effective for a certain period, as described under "Description of Notes--Registration Rights." The original issue discount rules allow contingent payments such as these to be disregarded in computing a holder's interest income if the contingency is "remote." We believed as of the date of issuance of the notes that the possibility is remote that we will make any of the payments in excess of stated interest or principal described above. Our determination in this regard is binding on U.S. holders unless they disclose their contrary position. If, contrary to expectations, we pay liquidated damages for a failure to provide registration rights, U.S. holders would be required to recognize additional interest income. Market Discount. In general, a holder will be considered to have purchased a note with "market discount" if the holder's purchase price for the note is less than the principal amount of the note by at least a de minimis amount (equal to 0.25 percent of the principal amount of the note multiplied by the number of remaining whole years to maturity). Any gain recognized by a holder on the taxable disposition of a note (determined as described below) that was acquired with market discount should be treated as ordinary income to the extent of the market discount that accrued thereon while the note was considered to be held by the holder (unless the holder elected to include market discount in income as it accrued). To the extent that a note that has been acquired with market discount is exchanged in a tax-free transaction for common stock (as may occur here), any market discount that accrued on the note but was not recognized by the holder is carried over to the common stock received therefore and any gain recognized on the subsequent sale, exchange, redemption or other disposition of such common stock will be treated as ordinary income to the extent of the accrued but unrecognized market discount with respect to the exchanged note. In addition, the holder may be required to defer, until the maturity of the note or its earlier disposition in a taxable transaction, the deduction of a portion of the interest expense on any indebtedness incurred or continued to purchase or carry such note. Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the note, unless a holder elects to accrue on a constant yield method. A holder may elect to include market discount in income currently as it accrues (on either ratable or constant yield basis), in which case the rule described above regarding deferral of interest deductions will not apply. This election to include market discount in income currently, once made, applies to all market discount obligations acquired on or after the first day of the taxable year to which the election applies, and may not be revoked without the consent of the IRS. Amortizable Bond Premium. If holder purchases a note for an amount greater than the stated redemption price at maturity, i.e., the principal amount, of the note, then such excess (less any amount thereof attributable to the conversion feature of the note) may be amortizable by the holder as an offset to interest payments on the note. This "bond premium" would be amortizable on a constant interest rate basis over the term of the note, subject to certain limitations. Such treatment is available only if the holder makes (or has made) a timely election under Code Section 171. This bond premium would not include any amount of the purchase price attributable to the conversion option of the note. The value of the conversion option may be determined under any reasonable method, for example, the holder may determine its value by comparing the market price of the note to market prices of similar debt instruments that do not have a conversion option. If a holder of a note makes an election to amortize bond premium, the tax basis of the note must be reduced by the amount of the aggregate amortization amounts allowable for the bond premium. Any such election to amortize bond premium would apply to all debt instruments held or subsequently acquired by the electing holder on or after the first day of the first taxable year to which the election applies and cannot be revoked without permission from the IRS. 27 Sale, Retirement or Redemption of Notes Solely for Cash. On the sale, retirement or redemption of your note: . You will have taxable gain or loss equal to the difference between the amount received by you (to the extent such amount does not represent accrued but unpaid interest, which will be treated as such) and your adjusted tax basis in the note. . Your gain or loss will be capital gain or loss (subject to the market discount rules described above), and will be long term capital gain or loss if you held the note for more than one year. For an individual, the maximum tax rate on long term capital gains is 20% (or 18% if the note is acquired on or after January 1, 2001 and held for more than five years). Conversion of Notes into our Common Stock. If you convert your notes into our common stock: . You will not recognize gain or loss on the conversion of the notes solely into our common stock, other than cash received in lieu of fractional shares. . Your tax basis in the common stock received upon conversion of the notes will be equal to your aggregate tax basis in the notes converted, less any portion allocable to cash received in lieu of a fractional share. . The holding period of the common stock you receive upon conversion of notes generally will include the period during which you held the notes prior to the conversion. . Cash received in lieu of a fractional share of common stock should be treated as a payment in exchange for the fractional share (rather than as a dividend). Gain or loss recognized on the receipt of cash paid in lieu of the fractional share should equal the difference between the amount of cash received for the fractional share and your tax basis allocable to the fractional share exchanged. Any such gain or loss will be capital gain or loss (subject to the market discount rules described above), and generally will be long-term capital gain or loss if you held the notes for more than one year at the time of conversion. Conversion of the Notes for Cash and Common Stock. Upon your receipt of a combination of stock and cash upon conversion, in each case apart from any cash received in lieu of a fractional share you will recognize gain (but not loss) but only to the extent such gain does not exceed such cash. Any such gain will be capital gain (subject to the market discount rules described above) and generally will be long-term capital gain if you held the notes for more than one year at the time of conversion. Your basis in the common stock received in the exchange will be the same as your tax basis in the notes tendered to us (exclusive of any tax basis allocable to a fractional share), decreased by the amount of cash (other than cash received in lieu of a fractional share), if any, received in the exchange and increased by the amount of any gain so recognized on the exchange. The holding period of the common stock will be determined as described above under "--Conversion of Notes into our Common Stock." The receipt of cash in lieu of a fractional share of common stock, if any, should generally result in capital gain or loss (subject to the market discount rules described above) measured by the difference between the cash received for the fractional share interest and your tax basis in the fractional share interest. Distributions on our Common Stock. Distributions on our common stock will constitute dividends for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under U.S. federal income tax principles. If you are a U.S. corporation, dividends paid to you may qualify for the dividends-received deduction. To the extent that dividends are treated as ordinary income, dividends received by corporate holders will be eligible for the 70% dividends-received deduction under Section 243 of the Code, subject to limitations generally applicable to the dividends-received deduction, including those contained in Section 246 and 246A of the Code and the provisions for computation of adjusted current earnings for purposes of the corporate alternative minimum tax. Under Section 246(c) of the Code, the 70% dividends-received deduction will not be available 28 with respect to stock that is held for 45 days or less during the 90-day period beginning on the date which is 45 days before the date on which such stock becomes ex-dividend with respect to such dividend. The length of time that a holder is deemed to have held stock for these purposes is reduced by periods during which the holder's risk of loss with respect to the stock is diminished by reason of the existence of certain options, contracts to sell, short sales or similar transactions. Section 246(c) also denies the 70% dividends-received deduction to the extent that a corporate holder is under an obligation, with respect to substantially similar or related property, to make payments corresponding to the dividend received. To the extent that you receive distributions on our common stock that would otherwise constitute dividends for U.S. federal income tax purposes but that exceed our current and accumulated earnings and profits, the distribution will be treated first as a non-taxable return of capital, which reduces your basis in the common stock. Any distribution in excess of your basis in the common stock will be treated as capital gain. Deemed Distributions. The conversion rate of the notes is subject to adjustment under certain circumstances, as described under "Description of Notes--Conversion." Certain adjustments to the conversion rate may cause you to be treated as having received a distribution. This distribution would be taxable to you as a dividend, return of capital or capital gain in accordance with the earnings and profits rules discussed above under "Distributions on our Common Stock." In addition, certain adjustments under certain circumstances, as described under "Description of Notes--Conversion," may cause holders of our common stock to be treated as having received a distribution. Redemption or Sale of Common Stock. A redemption of shares of common stock for cash, and a sale of common stock will be taxable events. A redemption of shares of common stock for cash will generally be treated as a sale or exchange if the holder does not own, actually or constructively within the meaning of Section 318 of the Code, any stock of GATX other than the common stock. If a holder does own, actually or constructively, such other stock (including stock redeemed), a redemption of common stock may be treated as a dividend to the extent of GATX's current and accumulated earnings and profits (as determined for federal income tax purposes). Such dividend treatment would not be applied if the redemption is "substantially disproportionate" with respect to the holder under Section 302(b)(2) of the Code or is "not essentially equivalent to a dividend" with respect to a holder under Section 302(b)(1) of the Code. A distribution to a holder will be "not essentially equivalent to a dividend" if it results in a "meaningful reduction" in the holder's stock interest in GATX. For these purposes, a redemption of common stock for cash that results in a reduction in the proportionate interest in GATX (taking into account any constructive ownership) of a holder whose relative stock interest in GATX is minimal and who exercises no control over corporate affairs should be regarded as a meaningful reduction in the holders' stock interest in GATX. If a redemption of the common stock for cash is not treated as a distribution taxable as a dividend or if the common stock is sold, the redemption or sale would result in capital gain or loss (subject to the market discount rules described above) equal to the difference between the amount of cash and the fair market value of other proceeds received in such sale or redemption and the holder's adjusted tax basis in the common stock sold or redeemed. If a redemption of common stock is treated as a distribution that is taxable as a dividend, the amount of the distribution will be measured by the amount of cash. The holder's adjusted tax basis in the redeemed common stock will be transferred to any remaining stock holdings in GATX. If the holder does not retain any stock ownership in GATX, the holder may lose such basis entirely. 29 Non-U.S. Holders Withholding Tax on Payments of Principal and Interest on Notes. Generally, payments of principal and interest on a note will not be subject to U.S. federal withholding tax, provided that in the case of an interest payment: . You do not actually or constructively own 10% or more of the total combined voting power of all our voting stock; . you are not a controlled foreign corporation that is related to us within the meaning of U.S. federal income tax laws; . you are not a bank to whom the notes would constitute an extension of credit made pursuant to a loan agreement entered into in the ordinary course of your trade or business; and . either (A) the beneficial owner of the note certifies to the applicable payor or its agent, under penalties of perjury on an IRS Form W-8BEN (or a suitable substitute form), that such owner is not a United States person and provides such owner's name and address or (B) a securities clearing organization, bank or other financial institution, that holds customers' securities in the ordinary course of its trade or business (a "financial institution") and holds the note, certifies under penalties of perjury that such an IRS Form W-8BEN (or suitable substitute form) has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof. Except to the extent otherwise provided under an applicable tax treaty, you generally will be taxed in the same manner as a U.S. holder with respect to interest payments on a note if such interest is effectively connected with your conduct of a trade or business in the United States. Effectively connected interest received by a corporate non-U.S. holder may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or, if applicable, a lower treaty rate), subject to certain adjustments. Such effectively connected interest will not be subject to withholding tax if the holder delivers an IRS Form W-8ECI to the payor. Dividends. Dividends, if any, paid on the common stock to you, and any deemed dividends resulting from an adjustment to the conversion price (see "--U.S. Holders--Deemed Distributions" above), generally will be subject to a 30% U.S. federal withholding tax, subject to reduction if you are eligible for the benefits of an applicable income tax treaty. You will be required to file an IRS Form W-8BEN to claim tax treaty benefits. However, except to the extent otherwise provided under an applicable tax treaty, you generally will be taxed in the same manner as a U.S. holder on dividends paid (or deemed paid) that are effectively connected with your conduct of a trade or business in the United States. If you are a foreign corporation, you may also be subject to the "branch profits tax" on such effectively connected income at a 30% rate or such lower rate as may be specified by an applicable income tax treaty, subject to certain adjustments. Such effectively connected dividends will not be subject to withholding tax if the holder delivers an IRS Form W-8ECI to the payor. Gain on Disposition of the Notes and Common Stock. You generally will not be subject to U.S. federal income tax on gain realized on the sale, exchange or redemption of a note, or the sale or exchange of our common stock unless: . you are an individual present in the United States for 183 days or more in the year of such sale, exchange or redemption and either (A) you have a "tax home" in the United States and certain other requirements are met, or (B) the gain from the disposition is attributable to your office or other fixed place of business in the United States; or . the gain is effectively connected with your conduct of a trade or business in the United States; or . in the case of the disposition of the notes or the common stock, GATX is a United States real property holding corporation at any time during the shorter of the five-year period ending on the date of the disposition or the period during which you held our notes or common stock. GATX does not believe it is or is likely to become a United States real property holding corporation. 30 U.S. Federal Estate Tax. A note held by an individual who at the time of death is not a citizen or resident of the United States (as specially defined for U.S. federal estate tax purposes) will not be subject to United States federal estate tax if the individual did not actually or constructively own 10% or more of the total combined voting power of all classes of stock of GATX and, at the time of the individual's death, payments with respect to such note would not have been effectively connected with the conduct by such individual of a trade or business in the United States. If you are an individual, your shares of common stock will be subject to U.S. estate tax when you die unless you are entitled to the benefits of an estate tax treaty. The United States federal estate tax recently was repealed; however, the repeal does not take effect until 2010. In addition, the legislation repealing the estate tax expires in 2011, and thus the estate tax will be reinstated at that time unless future legislation extends the repeal. Backup Withholding and Information Reporting U.S. Holders. Information reporting will apply to payments of interest or dividends, if any, made by us on, or the proceeds of the sale or other disposition of, the notes or shares of common stock with respect to certain non-corporate U.S. holders, and backup withholding may apply unless the recipient of such payment supplies a taxpayer identification number, certified under penalties of perjury, as well as certain other information or otherwise establishes an exemption from backup withholding. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against that holder's U.S. federal income tax liability provided the required information is furnished to the IRS. Non-U.S. Holders. Backup withholding and information reporting on Form 1099 will not apply to payments of principal and interest on the notes by us or our agent to a Non-U.S. holder provided the Non-U.S. holder provides the certification described above under "Non-U.S. Holders--Withholding Tax on Payments of Principal and Interest on Notes" or otherwise establishes an exemption (provided that neither us nor our agent has actual knowledge that the holder is a United States person or that the conditions of any other exemptions are not in fact satisfied). Interest payments made to Non-U.S. holder may, however, be reported to the IRS and to such Non-U.S. holder on Form 1042-S. U.S. information reporting on Form 1099 and backup withholding tax will not apply to dividends paid on our common stock to a Non-U.S. Holder, provided the Non-U.S. holder provides the certification described above under "Non-U.S. Holders--Withholding Tax on Payments of Principal and Interest on Notes" or otherwise establishes an exemption (provided that neither us nor our agent has actual knowledge that the holder is a United States holder or that the conditions of any other exemptions are not in fact satisfied). Distributions on our shares of common stock to a Non-U.S. holder will, however, be reported to the IRS and to such Non-U.S. holder on Form 1042-S. Copies of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the non-U.S. holder resides. Information reporting and backup withholding generally will not apply to a payment of the proceeds of a sale of notes or common stock effected outside the United States by a foreign office of a foreign broker. However, information reporting requirements (but not backup withholding) will apply to a payment of the proceeds of a sale of notes or common stock effected outside the United States by a foreign office of a broker if the broker (i) is a United States person, (ii) derives 50 percent or more of its gross income for certain periods from the conduct of a trade or business in the United States, (iii) is a "controlled foreign corporation" as to the United States, or (iv) is a foreign partnership that, at any time during its taxable year is 50 percent or more (by income or capital interest) owned by United States persons or is engaged in the conduct of a U.S. trade or business, unless in any such case the broker has documentary evidence in its records that the holder is a Non-U.S. holder (and has no actual knowledge to the contrary) and certain conditions are met, or the holder otherwise establishes an exemption. Payment by a United States office of a broker of the proceeds of a sale of notes or common stock will be subject to both backup withholding and information reporting unless the holder certifies its non-United States status under penalties of perjury or otherwise establishes an exemption. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against that holder's U.S. federal income tax liability provided the required information is furnished to the IRS. 31 PLAN OF DISTRIBUTION The selling holders and their successors, including their transferees, pledgees or donees or their successors, may sell the notes and the common stock into which the notes are convertible directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling holders or the purchasers. These discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved. The notes and the common stock into which the notes are convertible may be sold in one or more transactions at: . fixed prices; . prevailing market prices at the time of sale; . prices related to the prevailing market prices; . varying prices determined at the time of sale; or . negotiated prices. The methods by which the notes and the common stock may be sold include: . a block trade in which the broker-dealer so engaged will attempt to sell the offered securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; . purchases by a broker-dealer as principal and resale by such broker-dealer for its account pursuant to this prospectus; . ordinary brokerage transactions and transactions in which the broker solicits purchasers; . privately-negotiated transactions; . through put or call transactions; . through short-sales; and . underwritten transactions. Our common stock is listed for trading on the New York Stock Exchange under the symbol "GMT." The notes are currently eligible for trading on the PORTAL System of the NASD. In order to comply with the securities laws of some jurisdictions, if applicable, the notes and common stock into which the notes are convertible may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some jurisdictions the notes and common stock into which the notes are convertible may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with. The selling holders and any underwriters, broker-dealers or agents that participate in the sale of the notes and common stock into which the notes are convertible may be "underwriters" within the meaning of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling holders who are "underwriters" within the meaning of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. The selling holders have acknowledged that they understand their obligations to comply with the provisions of the Exchange Act and the rules thereunder relating to stock manipulation, particularly Regulation M. 32 In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this prospectus. A selling holder is not required to sell any notes or common stock described in this prospectus and may transfer, devise or gift these securities by other means not described in this prospectus. To the extent required, the specific notes or common stock to be sold, the names of the selling holders, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is a part. We entered into a registration rights agreement for the benefit of holders of the notes to register their notes and common stock under applicable federal and state securities laws under specific circumstances and at specific times. The registration rights agreement provides for cross-indemnification of the selling holders and GATX and their respective directors, officers and controlling persons against specific liabilities in connection with the offer and sale of the notes and the common stock, including liabilities under the Securities Act. We will pay substantially all of the expenses incurred by the selling holders incident to the offering and sale of the notes and the common stock. LEGAL MATTERS The validity of the securities offered by this prospectus will be passed upon for us by Mayer, Brown, Rowe & Maw, Chicago, Illinois. EXPERTS The consolidated financial statements of GATX Corporation and GATX Financial Corporation appearing in the GATX Corporation and GATX Financial Corporation Annual Reports in their respective Form 10-K for the year ended December 31, 2001, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We and GATX Financial each file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility: Public Reference Room 450 Fifth Street, N.W. Room 1024 Washington, D.C. 20549 You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operations of the public reference facilities and copying charges. GATX's SEC filings are also available at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005 and the offices of the Chicago Stock Exchange at 120 South LaSalle Street, Chicago, Illinois 60603. 33 We incorporate by reference in this prospectus the following documents filed by GATX or GATX Financial with the SEC: . GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; . GATX's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002; . GATX's Current Reports on Form 8-K filed with the SEC on January 23, 2002, January 28, 2002, February 1, 2002, April 16, 2002, April 23, 2002 and May 6, 2002; . GATX Financial's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; and . GATX Financial's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002. We also incorporate by reference all documents filed by GATX or GATX Financial pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and prior to the termination of this offering. Any statement made in a document incorporated by reference or deemed incorporated herein by reference is deemed to be modified or superseded for purposes of this prospectus if a statement contained in this prospectus or in any other subsequently filed document which also is incorporated or deemed incorporated by reference herein modifies or supersedes that statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Statements made in this prospectus or in any document incorporated by reference in this prospectus as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the documents incorporated by reference, each such statement being qualified in all material respects by such reference. We will provide a copy of these filings and any exhibits specifically incorporated by reference in these filings and a copy of the indenture and registration rights agreement referred to herein at no cost by request directed to us at the following address and telephone number: GATX Corporation, 500 West Monroe Street, Chicago, Illinois 60661-3676, (312) 621-6200, Attention: Treasurer. 34 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Estimated expenses in connection with the offering of the Securities being registered herein are as follows: Registration Statement fee.. $ 16,100 Legal fees and expenses..... $25,000 Accounting fees and expenses $10,000 Trustee fees and expenses... $10,000 Printing and engraving...... $ 5,000 Miscellaneous............... $ 8,900 -------- Total................ $75,000
Item 15. Indemnification of Directors and Officers. GATX Corporation (a) Certain provisions of the New York Business Corporation Law and Article II, Section II of GATX's By-Laws provide for the prompt indemnification of directors and officers under certain conditions including the possibility of indemnification against liabilities under the Securities Act of 1933. The By-Laws also provide that the Company has the burden of proving that a director is not entitled to indemnification in a particular instance. (b) In addition, GATX also maintains directors' and officers' liability insurance which purports to insure GATX against certain costs of indemnification which may be incurred by GATX pursuant to the foregoing provisions, and to insure directors and officers of GATX against certain liabilities incurred by them in the discharge of their function as such officers and directors, except for liabilities resulting from their own malfeasance. GATX Financial Corporation Section 145 of the General Corporation Law of the State of Delaware, as amended, empowers a corporation, subject to certain limitations, to indemnify its directors and officers against the actual and reasonable expenses of defending litigation against them in their capacities as directors and officers. Article VI of the By-Laws of GATX Financial provides in terms similar to those of Section 145 of the Delaware General Corporation Law that GATX Financial shall have the power to indemnify its directors and officers. In addition, GATX Financial's directors and officers are insured under directors and officers liability insurance policies maintained by GATX Corporation. Item 16 Exhibits. 4.1 Restated Certificate of Incorporation of GATX Corporation, as amended (incorporated by reference to GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 1991) 4.2 Certificate of Amendment of Certificate of Incorporation of GATX Corporation (incorporated by reference to GATX's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002) 4.3 By-Laws of GATX Corporation, as amended (incorporated by reference to GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 2001)
II-1 4.4 Indenture, dated as of February 1, 2002, by and among GATX Corporation, GATX Financial Corporation and JPMorgan Chase Bank, as trustee 4.5 Registration Rights Agreement, dated as of February 1, 2002, by and among GATX Corporation, GATX Financial Corporation and Salomon Smith Barney Inc. and J.P. Morgan Securities Inc., as representatives of the initial purchasers 5.1 Opinion of Mayer, Brown, Rowe & Maw 12.1 Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends of GATX Corporation. 12.2 Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends of GATX Financial Corporation. 23.1 Consent of Mayer, Brown, Rowe & Maw (included in Exhibit 5.1) 23.2 Consent of Ernst & Young LLP 24.1* Powers of Attorney 25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase Bank, as trustee under the Indenture
- -------- * previously filed Item 17. Undertakings (a) The undersigned registrants hereby undertake: (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement; (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; (ii) to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that the undertakings set forth in clauses (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those clauses is contained in periodic reports filed with or furnished to the Commission by the registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrants' annual report pursuant to Section 13(a) or II-2 Section 15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described in Item 15 herein, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on the date of June 17, 2002. GATX CORPORATION By: /s/ RONALD H. ZECH ----------------------------- Ronald H. Zech Chairman, President, Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed on June 17, 2002 by the following persons in the capacities indicated. Signature Title --------- ----- /s/ RONALD H. ZECH Chairman, President, Chief - ----------------------------- Executive Officer and Ronald H. Zech Director (principal executive officer) /s/ BRIAN A. KENNEY Vice President and Chief - ----------------------------- Financial Officer Brian A. Kenney (principal financial officer) /s/ WILLIAM M. MUCKIAN Vice President, Controller - ----------------------------- and Chief Accounting William M. Muckian Officer (principal accounting office) /s/ ROD F. DAMMEYER* Director - ----------------------------- Rod F. Dammeyer /s/ JAMES M. DENNY* Director - ----------------------------- James M. Denny /s/ RICHARD FAIRBANKS* Director - ----------------------------- Richard Fairbanks /s/ WILLIAM C. FOOTE* Director - ----------------------------- William C. Foote /s/ DEBORAH M. FRETZ* Director - ----------------------------- Deborah M. Fretz - ----------------------------- Director Miles L. Marsh /s/ MICHAEL E. MURPHY* Director - ----------------------------- Michael E. Murphy II-4 Signature Title --------- ----- /s/ JOHN W. ROGERS, JR.* Director - ----------------------------- John W. Rogers, Jr. */s/ RONALD J. CIANCIO - ----------------------------- Ronald J. Ciancio (Attorney in Fact) II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on the date of June 17, 2002. GATX FINANCIAL CORPORATION BY: /s/ RONALD H. ZECH ----------------------------- Ronald H. Zech Chairman, President, Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed on June 17, 2002 by the following persons in the capacities indicated. Signature Title --------- ----- /s/ RONALD H. ZECH Chairman, President, Chief - ----------------------------- Executive Officer and Ronald H. Zech Director (principal executive officer) /s/ BRIAN A. KENNEY Vice President, Chief - ----------------------------- Financial Officer and Brian A. Kenney Director (principal financial officer) /s/ WILLIAM M. MUCKIAN Vice President, Controller - ----------------------------- and Chief Accounting William M. Muckian Officer (principal accounting officer) /s/ JESSE V. CREWS Director - ----------------------------- Jesse V. Crews /s/ DAVID M. EDWARDS Director - ----------------------------- David M. Edwards II-6 EXHIBIT INDEX
Exhibit No. Description --- ----------- 4.1 Restated Certificate of Incorporation of GATX Corporation, as amended (incorporated by reference to GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 1991) 4.2 Certificate of Amendment of Certificate of Incorporation of GATX Corporation (incorporated by reference to GATX's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002) 4.3 By-Laws of GATX Corporation, as amended (incorporated by reference to GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 2001) 4.4 Indenture, dated as of February 1, 2002, by and among GATX Corporation, GATX Financial Corporation and JPMorgan Chase Bank, as trustee 4.5 Registration Rights Agreement, dated as of February 1, 2002, by and among GATX Corporation, GATX Financial Corporation and Salomon Smith Barney Inc. and J.P. Morgan Securities, Inc., as representatives of the initial purchasers 5.1 Opinion of Mayer, Brown, Rowe & Maw 12.1 Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends and GATX Corporation 12.2 Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends of GATX Financial Corporation 23.1 Consent of Mayer, Brown, Rowe & Maw (included in Exhibit 5.1) 23.2 Consent of Ernst & Young LLP 24.1* Powers of Attorney 25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase Bank, as trustee under the Indenture
- -------- * previously filed EX-4.4 3 dex44.txt INDENTURE DATED 02-01-2002 Exhibit 4.4 GATX CORPORATION, as Issuer GATX FINANCIAL CORPORATION, as Guarantor and ---------------- JPMORGAN CHASE BANK, as Trustee ---------------- $175,000,000 7.5% Convertible Senior Notes due 2007 ---------------- INDENTURE Dated as of February 1, 2002 TABLE OF CONTENTS ARTICLE 1 DEFINITIONS .................................................. 1 SECTION 1.1 Definitions ............................................. 1 SECTION 1.2 Other Definitions ....................................... 6 SECTION 1.3 Incorporation by Reference of Trust Indenture Act ....... 6 SECTION 1.4 Rules of Construction ................................... 7 ARTICLE 2 THE CONVERTIBLE NOTES ........................................ 7 SECTION 2.1 Form and Dating ......................................... 7 SECTION 2.2 Execution and Authentication ............................ 8 SECTION 2.3 Registrar, Paying Agent and Conversion Agent ............ 9 SECTION 2.4 Paying Agent To Hold Money in Trust ..................... 9 SECTION 2.5 Holder Lists ............................................10 SECTION 2.6 Transfer and Exchange ...................................10 SECTION 2.7 Replacement Convertible Notes ...........................12 SECTION 2.8 Outstanding Convertible Notes ...........................13 SECTION 2.9 When Convertible Notes Owned by the Company or an Affiliate are Disregarded ...............................13 SECTION 2.10 Temporary Convertible Notes .............................13 SECTION 2.11 Cancellation ............................................14 SECTION 2.12 Defaulted Interest ......................................14 SECTION 2.13 CUSIP Number ............................................14 SECTION 2.14 Regulation S ............................................15 ARTICLE 3 REDEMPTION ...................................................15 SECTION 3.1 No Redemption Prior to the Maturity Date ................15 ARTICLE 4 COVENANTS ....................................................15 SECTION 4.1 Payment of Convertible Notes ............................15 SECTION 4.2 Rule 144A Information; Periodic Reports to the Trustee ..15 SECTION 4.3 Compliance Certificate ..................................16 SECTION 4.4 Maintenance of Office or Agency .........................16 SECTION 4.5 Continued Existence .....................................16 SECTION 4.6 Repurchase Upon Fundamental Change ......................16 SECTION 4.7 Appointments to Fill Vacancies in Trustee's Office ......19 SECTION 4.8 Stay, Extension and Usury Laws ..........................19 -i- TABLE OF CONTENTS (continued) Page SECTION 4.9 Taxes ..................................................20 SECTION 4.10 Investment Company Act .................................20 ARTICLE 5 SUCCESSORS ..................................................20 SECTION 5.1 When the Company May Merge, Etc ........................20 SECTION 5.2 Successor Corporation Substituted ......................21 SECTION 5.3 Purchase Option on Fundamental Change ..................21 ARTICLE 6 DEFAULTS AND REMEDIES .......................................21 SECTION 6.1 Events of Default ......................................21 SECTION 6.2 Acceleration ...........................................23 SECTION 6.3 Other Remedies .........................................23 SECTION 6.4 Waiver of Past Defaults ................................23 SECTION 6.5 Control by Majority ....................................24 SECTION 6.6 Limitation on Suits ....................................24 SECTION 6.7 Rights of Holders To Receive Payment ...................24 SECTION 6.8 Collection Suit by Trustee .............................25 SECTION 6.9 Trustee May File Proofs of Claim .......................25 SECTION 6.10 Priorities .............................................25 SECTION 6.11 Undertaking for Costs ..................................26 ARTICLE 7 THE TRUSTEE .................................................26 SECTION 7.1 Duties of the Trustee ..................................26 SECTION 7.2 Rights of the Trustee ..................................27 SECTION 7.3 Individual Rights of the Trustee .......................29 SECTION 7.4 Trustee's Disclaimer ...................................29 SECTION 7.5 Notice of Defaults .....................................29 SECTION 7.6 Reports by the Trustee to Holders ......................29 SECTION 7.7 Compensation and Indemnity .............................30 SECTION 7.8 Replacement of the Trustee .............................30 SECTION 7.9 Successor Trustee by Merger, etc .......................32 SECTION 7.10 Eligibility, Disqualification ..........................32 SECTION 7.11 Preferential Collection of Claims Against Company ......32 -ii- TABLE OF CONTENTS (continued) Page ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE .....................32 SECTION 8.1 Discharge of Indenture .................................32 SECTION 8.2 Deposited Monies to be Held in Trust by Trustee ........33 SECTION 8.3 Paying Agent to Repay Monies Held ......................33 SECTION 8.4 Return of Unclaimed Monies .............................33 SECTION 8.5 Reinstatement ..........................................33 ARTICLE 9 AMENDMENTS ..................................................34 SECTION 9.1 Without the Consent of Holders .........................34 SECTION 9.2 With the Consent of Holders ............................34 SECTION 9.3 Compliance with the Trust Indenture Act ................35 SECTION 9.4 Revocation and Effect of Consents ......................36 SECTION 9.5 Notation on or Exchange of Convertible Notes ...........36 SECTION 9.6 Trustee Protected ......................................36 ARTICLE 10 GENERAL PROVISIONS ..........................................37 SECTION 10.1 Trust Indenture Act Controls ...........................37 SECTION 10.2 Notices ................................................37 SECTION 10.3 Communication by Holders With Other Holders ............38 SECTION 10.4 Certificate and Opinion as to Conditions Precedent .....38 SECTION 10.5 Statements Required in Certificate or Opinion. .........38 SECTION 10.6 Rules by Trustee and Agents ............................39 SECTION 10.7 Legal Holidays .........................................39 SECTION 10.8 No Recourse Against Others .............................39 SECTION 10.9 Counterparts ...........................................39 SECTION 10.10 Other Provisions .......................................39 SECTION 10.11 Governing Law ..........................................40 SECTION 10.12 No Adverse Interpretation of Other Agreements ..........40 SECTION 10.13 Successors .............................................41 SECTION 10.14 Severability ...........................................41 SECTION 10.15 Table of Contents, Headings, etc .......................41 ARTICLE 11 CONVERSION OF CONVERTIBLE NOTES .............................41 SECTION 11.1 Right to Convert .......................................41 -iii- TABLE OF CONTENTS (continued) Page SECTION 11.2 Exercise of Conversion Privilege; Issuance of Common Stock on Conversion; No Adjustment for Interest or Dividends ..................................42 SECTION 11.3 Cash Payments in Lieu of Fractional Shares .............44 SECTION 11.4 Conversion Price .......................................44 SECTION 11.5 Adjustment of Conversion Price .........................44 SECTION 11.6 Effect of Reclassification, Consolidation, Merger or Sale ................................................52 SECTION 11.7 Taxes on Shares Issued .................................53 SECTION 11.8 Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock ................................53 SECTION 11.9 Responsibility of Trustee ..............................53 SECTION 11.10 Notice to Holders Prior to Certain Actions .............54 SECTION 11.11 Restriction on Common Stock Issuable Upon Conversion ...55 ARTICLE 12 Guarantee ...................................................56 SECTION 12.1 Terms of the Guarantee .................................56 SECTION 12.2 Limitation of the Guarantor's Liability ................57 -iv- CROSS-REFERENCE TABLE* Trust Indenture Indenture Act Section Section - --------------- --------- 310(a)(1) ....................................... 7.10 (a)(2) .................................... 7.10, 10.10 (a)(3) .................................... n/a (a)(4) .................................... n/a (a)(5) .................................... n/a (b) ....................................... 7.8, 7.10, 10.2 (c) ....................................... n/a 311(a) .......................................... 7.11 (b) ....................................... 7.11 (c) ....................................... n/a 312(a) .......................................... 2.5 (b) ....................................... 10.3 (c) ....................................... 10.3 313(a) .......................................... 7.6 (b)(1) .................................... n/a (b)(2) .................................... 7.6 (c) ....................................... 7.6, 10.2 (d) ....................................... 7.6 314(a) .......................................... 4.2, 10.2 (b) ....................................... n/a (c)(1) .................................... 10.4 (c)(2) .................................... 10.4 (c)(3) .................................... n/a (d) ....................................... n/a (e) ....................................... 10.5 (f) ....................................... n/a 315(a) .......................................... 7.1(b) (b) ....................................... 7.5, 10.2 (c) ....................................... 7.1(a) (d) ....................................... 7.1(c) (e) ....................................... 6.11 316(a)(last sentence) ........................... 2.9 (a)(1)(A) ................................. 6.5 (a)(1)(B) ................................. 6.4 (a)(2) .................................... n/a (b) ....................................... 6.2 (c) ....................................... 9.4 317(a)(1) ....................................... 6.8 (a)(2) .................................... 6.9 (b) ....................................... 2.4 318(a) .......................................... 10.1 (b) ....................................... n/a (c) ....................................... 10.1 - ------------------ "n/a" means not applicable. *This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture. -v- THIS INDENTURE, dated as of February 1, 2002, is by and among GATX Corporation, a New York corporation (the "Company"), GATX Financial Corporation, a Delaware corporation (the "Guarantor"), and JPMorgan Chase Bank, a New York banking corporation (the "Trustee"). The Company has duly authorized the creation of its 7.5% Convertible Senior Notes due 2007 (the "Convertible Notes"), and to provide therefor the Company, the Guarantor and the Trustee have duly authorized the execution and delivery of this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the holders from time to time of the Convertible Notes: ARTICLE 1 DEFINITIONS SECTION 1.1 Definitions. "Affiliate" means, when used with reference to any person, any other person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such person. For the purposes of this definition, "control" when used with respect to any specified person means the power to direct or cause the direction of management or policies of the referent person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. The terms "controlling" and "controlled" have meanings correlative of the foregoing. "Agent" means any Registrar, Paying Agent, Conversion Agent or co- registrar. "Agent Member" means any member of, or participant in, the Depositary. "Applicable Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Global Security to the extent applicable to such transaction and as in effect from time to time. "Average Sale Price" of the Common Stock means, with respect to any Conversion Date, the average of the Sales Prices of the Common Stock for each Trading Day in the five Trading Day period immediately following the date on which the Company delivers the notice described in Section 11.2. "Board of Directors" means the Board of Directors of the Company or the Guarantor, as the case may be, or in either case, any duly authorized committee of the Board of Directors. "Capital Stock" of any person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such person, but excluding any debt securities convertible into such equity. "Change of Control" means the occurrence of one or more of the following events: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of shares representing more than 50% of the combined voting power of the then outstanding Voting Stock of the Company, (b) the Company consolidates with or merges into any other corporation (other than a subsidiary of the Company), any other corporation (other than a subsidiary of the Company) consolidates with or merges into the Company, (c) the outstanding Common Stock of the Company is reclassified into, exchanged for or converted into the right to receive any other property or securities or (d) the Company or the Company and its subsidiaries, taken as a whole, sells, conveys, transfers or leases its properties and assets substantially as an entirety to any person (other than to one or more wholly-owned subsidiaries of the Company); provided, that a Change of Control under (a), (b), (c) and (d) above shall not be deemed to have occurred if at least 90% of the aggregate fair market value (as determined by the Company's Board of Directors) of the property and securities received by holders of the Common Stock (excluding cash payments for fractional shares) in the transaction or transactions constituting the Change of Control consists of shares of common stock of the surviving person (or its parent) that are, or upon issuance will be, traded on a United States national securities exchange or approved for trading on an established automated over-the-counter trading market in the United States. "Commission" means the Securities and Exchange Commission. "Common Stock" means any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which is not subject to redemption by the Company. Subject to the provisions of Section 11.6, however, shares issuable on conversion of Convertible Notes shall include only shares of the class designated as Common Stock of the Company at the date of this Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which are not subject to redemption by the Company; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. "Company" means the party named as such above until a successor replaces it in accordance with Article 5 and thereafter means the successor. References to the Company shall not include any subsidiary. "Convertible Notes" means the 7.5% Convertible Senior Notes due 2007 issued, authenticated and delivered under this Indenture. "Conversion Price" means the initial conversion price specified in the form of Convertible Note in Paragraph 15 of such form, as adjusted in accordance with the provisions of Article 11. "Corporate Trust Office" means the corporate trust office of the Trustee at which at any particular time the trust created by this Indenture shall principally be administered; as of the date hereof, the Corporate Trust Office is located at 450 West 33rd Street, New York, New York 10001. 2 "Default" means any event that is, or after notice or passage of time, or both, would be, an Event of Default. "Depositary" means, with respect to any Global Securities, a clearing agency that is registered as such under the Exchange Act and is designated by the Company to act as Depositary for such Global Securities (or any successor securities clearing agency so registered), which shall initially be DTC. "DTC" means The Depository Trust Company, a New York corporation. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Fundamental Change" means the occurrence of a Change of Control or a Termination of Trading. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect from time to time. "Global Security" means a Convertible Note that is registered in the Register. "Global Securities Legend" means the legend labeled as such and that is set forth in Exhibit A hereto. "Guarantor" means the party named as such above and its successors and assigns. "Indenture" means this Indenture as amended or supplemented from time to time. "Initial Purchasers" means Salomon Smith Barney Inc., J.P. Morgan Securities, Inc., U.S. Bancorp Piper Jaffray Inc., Bank One Capital Markets, Inc. and Credit Lyonnais Securities (USA) Inc. "Interest Payment Date" means February 1 and August 1 of each year. "Issue Date" means the date on which Convertible Notes are first issued and authenticated under this Indenture. "Liquidated Damages" has the meaning specified in paragraph 16 of the form of Convertible Note which is attached as Exhibit A hereto. "Maturity Date" means February 1, 2007. "Note Custodian" means JPMorgan Chase Bank, as custodian with respect to any Global Security, or any successor entity thereto. 3 "Offering Memorandum" means the offering memorandum dated January 28, 2002, relating to the Convertible Notes, including all amendments thereto. "Officer" means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Accounting Officer, any Executive Vice President, Senior Vice President or Vice President (whether or not designated by a number or numbers or word or words before or after the title "Vice President"), the Treasurer, the Secretary and any Assistant Treasurer or any Assistant Secretary of the Company or the Guarantor, as the case may be. "Officers' Certificate" means a certificate signed by any two of the following Officers of the Company or the Guarantor, as the case may be: the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, a Vice President, the Treasurer, the Controller or the Secretary, and delivered to the Trustee. One of the officers giving an Officers' Certificate given pursuant to Section 4.3 shall be the principal executive, financial or accounting officer of the Company. "Opinion of Counsel" means a written opinion from legal counsel, who may be an employee of or counsel to the Company, the Guarantor or the Trustee except to the extent otherwise indicated in this Indenture, and shall be reasonably acceptable to the Trustee. A "person" means any individual, corporation, partnership, joint venture, trust, estate, unincorporated organization, limited liability company or government or any agency or political subdivision thereof. "Registration Agreement" means the Registration Rights Agreement relating to the Convertible Notes and Common Stock issuable upon conversion of such Convertible Notes dated as of February 1, 2002, by and among the Company, the Guarantor and the Initial Purchasers, as such agreement may be amended, modified or supplemented from time to time. "Regular Record Date" means the January 15 or July 15 immediately preceding each Interest Payment Date. "Restricted Common Stock Legend" means the legend labeled as such and that is set forth in Exhibit B hereto. "Restricted Securities Legend" means the legend labeled as such and that is set forth in Exhibit A hereto. "Sale Price" of the Common Stock on any date means the closing sale price per share (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) on such date as reported in the composite transactions for the principal United States securities exchange on which the Common Stock is traded or, if the Common Stock is not listed on a United States national or regional securities exchange, as reported by the National Association of Securities Dealers Automated Quotation System, appropriately adjusted to take into account the occurrence after the applicable Conversion Date of an event that would result in an adjustment of the Conversion Price. 4 "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Shelf Registration Statement" shall have the meaning set forth in the Registration Agreement. A "subsidiary" means, with respect to any person, (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 such person or one or more of the other subsidiaries of that person (or a combination thereof) and (ii) any partnership (a) the sole general partner or managing general partner of which is such person or a subsidiary of such person or (b) the only general partners of which are such person or of one or more subsidiaries of such person (or any combination thereof). "Termination of Trading" will be deemed to have occurred if the Common Stock (or other common stock into which the Convertible Notes are then convertible) is neither listed for trading on the New York Stock Exchange nor approved for trading on the Nasdaq National Market. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (SS) 77aaa- 77bbbb) as in effect on the date of execution of this Indenture, except as provided in Sections 9.3 and 11.6. "Trading Day" shall mean (x) if the applicable security is listed or admitted for trading on the New York Stock Exchange or another national securities exchange, a day on which the New York Stock Exchange or such other national securities exchange is open for business or (y) if the applicable security is quoted on the Nasdaq National Market, a day on which trades may be made thereon or (z) if the applicable security is not so listed, admitted for trading or quoted, any day other than a Saturday or Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor. "Trust Officer" means an officer in the Corporate Trust Office of the Trustee and having direct responsibility for the administration of this Indenture. "U.S. Government Obligations" means direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged. In order to have money available on a payment date to pay principal or interest on the Convertible Notes, the U.S. Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's option. "Voting Stock" of a corporation means all classes of Capital Stock of such corporation then outstanding and normally entitled to vote in the election of directors. 5 SECTION 1.2 Other Definitions. Defined in Section "Bankruptcy Law" 6.1 "business day" 10.7 "closing price" 11.5 "Conversion Agent" 2.3 "Conversion Date 11.2 "Current Market Price" 11.5 "Custodian" 6.1 "Fundamental Change Date" 4.6 "Fundamental Change Offer" 4.6 "Fundamental Change Payment" 4.6 "Fundamental Change Payment Date" 4.6 "Event of Default" 6.1 "Expiration Time" 11.5 "fair market value" 11.5 "Legal Holiday" 10.7 "non-electing share" 11.5 "Paying Agent" 2.3 "Purchased Shares" 11.5 "Record Date" 11.5 "Registrar" 2.3 "Register" 2.3 "Securities" 11.5 "Trigger Event" 11.5 SECTION 1.3 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the Commission; "indenture securities" means the Convertible Notes; "indenture security holder" means a holder of a Convertible Note; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Convertible Notes means the Company, the Guarantor or any other obligor on the Convertible Notes. 6 All other terms in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them. SECTION 1.4 Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; and (5) the male, female and neuter genders include one another. ARTICLE 2 THE CONVERTIBLE NOTES SECTION 2.1 Form and Dating. (a) Global Securities. The Convertible Notes are being offered and sold by the Company pursuant to a Purchase Agreement relating to the Convertible Notes, dated January 28, 2002, among the Company, the Guarantor and the Initial Purchasers (the "Purchase Agreement"). The Convertible Notes are being offered and sold (i) in reliance on Regulation S under the Securities Act ("Regulation S") or (ii) to "qualified institutional buyers" as defined in Rule 144A ("QIBs") in reliance on Rule 144A under the Securities Act ("Rule 144A"), each as provided in the Purchase Agreement, and shall be issued in the form of one or more permanent global securities in definitive, fully registered form without interest coupons with the Global Securities Legend and Restricted Securities Legend set forth in Exhibit A hereto (each, a "Global Security"). Any Global Security shall be deposited on behalf of the purchasers of the Convertible Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or a nominee of the Depositary for the accounts of participants in the Depositary (and, in the case of Convertible Notes held in accordance with Regulation S, registered with the Depositary for the accounts of designated agents holding on behalf of the Euroclear System ("Euroclear") or Clearstream Banking, societe anonyme ("Clearstream")), duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of a Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided. 7 (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Security deposited with or on behalf of the Depositary. The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b) and the written order of the Company, authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of Cede & Co. or other nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions or held by the Trustee as custodian for the Depositary pursuant to a FAST Balance Certificate Agreement between the Depositary and the Trustee. Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or by the Trustee as the custodian of the Depositary or under such Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "Management Regulations and Instructions to Participants" of Clearstream shall be applicable to interests in any Global Securities that are held by participants through Euroclear or Clearstream. The Trustee shall have no obligation to notify holders of any such procedures or to monitor or enforce compliance with the same. (c) Definitive Securities. Except as provided in Section 2.10, owners of beneficial interests in Global Securities will not be entitled to receive physical delivery of certificated Convertible Notes in definitive form. If applicable, certificated Convertible Notes in definitive form will bear the Restricted Securities Legend set forth on Exhibit A unless removed in accordance with Section 2.6(c). SECTION 2.2 Execution and Authentication. One Officer shall sign the Convertible Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Convertible Note no longer holds that office at the time the Convertible Note is authenticated, the Convertible Note shall nevertheless be valid. A Convertible Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Convertible Note has been authenticated under this Indenture. Upon a written order of the Company signed by an Officer of the Company, the Trustee shall authenticate Convertible Notes for original issue in an aggregate principal amount of 8 $175,000,000 to the Initial Purchasers. The aggregate principal amount of Convertible Notes outstanding at any time may not exceed that amount except as provided in Section 2.7. The Convertible Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 or any integral multiple thereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Convertible Notes. An authenticating agent may authenticate Convertible Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same right as an Agent to deal with the Company or an Affiliate of the Company. SECTION 2.3 Registrar, Paying Agent and Conversion Agent. The Company shall maintain or cause to be maintained in such locations as it shall determine, which may be the Corporate Trust Office, an office or agency: (i) where securities may be presented for registration of transfer or for exchange ("Registrar"); (ii) where Convertible Notes may be presented for payment ("Paying Agent"); (iii) an office or agency where Convertible Notes may be presented for conversion (the "Conversion Agent"); and (iv) where notices and demands to or upon the Company or the Guarantor in respect of Convertible Notes and this Indenture may be served by the holders of the Convertible Notes. The Registrar shall keep a register ("Register") of the Convertible Notes and of their transfer and exchange. The Company may appoint one or more co-registrars, one or more additional paying agents and one or more additional conversion agents. The term "Paying Agent" includes any additional paying agent, and the term "Conversion Agent" includes any additional Conversion Agent. The Company may change any Paying Agent, Registrar, Conversion Agent or co-registrar without prior notice. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture and shall enter into an appropriate agency agreement with any Registrar, Paying Agent, Conversion Agent or co-registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company or any of its subsidiaries may act as Paying Agent, Registrar, Conversion Agent or co-registrar, except that for purposes of Article 8 and Section 4.6, neither the Company nor any of its subsidiaries shall act as Paying Agent. If the Company fails to appoint or maintain another entity as Registrar, or Paying Agent or Conversion Agent, the Trustee shall act as such, and the Trustee shall initially act as such. SECTION 2.4 Paying Agent To Hold Money in Trust. The Company shall require each Paying Agent (other than the Trustee, who hereby so agrees), to agree in writing that the Paying Agent will hold in trust for the benefit of holders of the Convertible Notes or the Trustee all money held by the Paying Agent for the payment of principal or interest (including Liquidated Damages) on the Convertible Notes, and will notify the Trustee of any default by the Company in respect of making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a subsidiary of the Company) shall have no further liability for the money. If the Company or a 9 subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the holders of the Convertible Notes all money held by it as Paying Agent. In the absence of a written request from the Company or the Guarantor to return unclaimed funds to the Company or the Guarantor, as the case may be, the Trustee shall from time to time deliver all unclaimed funds held by it in any capacity hereunder to or as directed by applicable escheat authorities, as determined by the Trustee in its sole discretion, in accordance with the customary practices and procedures of the Trustee. Any unclaimed funds held by the Trustee in any capacity hereunder pursuant to this Section 2.4 shall be held uninvested and without any liability for interest. SECTION 2.5 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders of Convertible Notes and shall otherwise comply with TIA ss.312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven business days before each Interest Payment Date, and as the Trustee may request in writing within fifteen (15) days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders of Convertible Notes. SECTION 2.6 Transfer and Exchange. (a) When Convertible Notes are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Convertible Notes for other denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall issue, and the Trustee shall authenticate, Convertible Notes at the Registrar's request, bearing registration numbers not contemporaneously outstanding. No service charge shall be made to a holder for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company and the Registrar may require payment of a sum sufficient to cover any transfer tax or other governmental charge payable upon exchanges pursuant to Sections 2.7, 9.5 or 11.2. The Company or the Registrar shall not be required to register the transfer of any Convertible Notes surrendered for repurchase pursuant to Section 4.6. All Convertible Notes issued upon any transfer or exchange of Convertible Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Convertible Notes surrendered upon such registration of transfer or exchange. (b) Notwithstanding any provision to the contrary herein, so long as a Global Security remains outstanding and is held by or on behalf of the Depositary, transfers of a Global Security, in whole or in part, or of any beneficial interest therein, shall only be made in accordance with Sections 2.1(b) and 2.10; provided, however, that beneficial interests in a Global Security may be transferred to persons who take delivery thereof in the form of a beneficial interest in the Global 10 Security in accordance with the transfer restrictions set forth under the heading "Notice to Investors" in the Offering Memorandum and, if applicable, in the Restricted Securities Legend. Except for transfers or exchanges made in accordance with Section 2.10, transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to nominees of the Depositary or to a successor of the Depositary or such successor's nominee. In the event that a Global Security is exchanged for Convertible Notes in definitive form pursuant to Section 2.10 prior to the effectiveness of a Shelf Registration Statement with respect to such Convertible Notes, such exchange may occur, and such Convertible Notes may be further exchanged or transferred, only upon receipt by the Registrar of (1) such Global Security or such Convertible Notes in definitive form, duly endorsed as provided herein, as applicable, (2) instructions from the holder directing the Trustee to authenticate and deliver one or more Convertible Notes in definitive form of the same aggregate principal amount as the Global Security or the Convertible Notes in definitive form (or portion thereof), as applicable, to be transferred, such instructions to contain the name or names of the designated transferee or transferees, the authorized denomination or denominations of the Convertible Notes in definitive form to be so issued and appropriate delivery instructions, and (3) such certifications or other information and, in the case of transfers pursuant to Rule 144 under the Securities Act, legal opinions as the Company may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act (including the certification requirements intended to ensure that such transfers comply with Rule 144A or Regulation S under the Securities Act, as the case may be), and upon compliance with such other procedures as may from time to time be adopted by the Company and the Registrar. (c) Except in connection with a Shelf Registration Statement contemplated by and in accordance with the terms of the Registration Agreement, if Convertible Notes are issued upon the registration of transfer, exchange or replacement of Convertible Notes bearing a Restricted Securities Legend, or if a request is made to remove such a Restrictive Securities Legend on Convertible Notes, the Convertible Notes so issued shall bear the Restricted Securities Legend, or a Restricted Securities Legend shall not be removed, as the case may be, unless there is delivered to the Company such satisfactory evidence, which, in the case of a transfer made pursuant to Rule 144 under the Securities Act, may include an opinion of counsel given in accordance with the laws in the State of New York, as may be reasonably required by the Company, that neither the legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities Act or that such Convertible Notes are not "restricted" within the meaning of Rule 144 under the Securities Act. Upon provision to the Company of such satisfactory evidence, the Trustee, at the written direction of the Company, shall authenticate and deliver Convertible Notes that do not bear the legend. The Company shall not otherwise be entitled to require the delivery of a legal opinion in connection with any transfer or exchange of Securities. (d) Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary. 11 (e) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Convertible Notes (including any transfers between or among the Depositary's participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation as is expressly required by, and to do so if and when expressly required by, the terms of this Indenture and to examine the same to determine substantial compliance as to form with the express requirements hereof. SECTION 2.7 Replacement Convertible Notes. If the holder of a Convertible Note claims that its Convertible Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Convertible Note if the Trustee's and the Company's requirements are met. If required by the Trustee or the Company as a condition of receiving a replacement Convertible Note, the holder of a Convertible Note must provide a certificate of loss and an indemnity and/or an indemnity bond sufficient, in the judgment of both the Company and the Trustee, to fully protect the Company, the Trustee, any Agent and any authenticating agent from any loss, liability, cost or expense which any of them may suffer or incur if the Convertible Note is replaced. The Company and the Trustee may charge the relevant holder for their expenses in replacing any Convertible Note. The Trustee or any authenticating agent may authenticate any such substituted Convertible Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require. Upon the issuance of any substituted Convertible Note, the Company and the Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Convertible Note, which has matured or is about to mature, or which has been submitted for repurchase pursuant to Section 4.6 or is about to be converted into Common Stock pursuant to Article 11, shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Convertible Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Convertible Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to the authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any paying agent or conversion agent of the destruction, loss or theft of such Convertible Note and of the ownership thereof. Every replacement Convertible Note is an additional obligation of the Company and shall be entitled to all the benefits provided under this Indenture equally and proportionately with all other Convertible Notes duly issued, authenticated and delivered hereunder. 12 SECTION 2.8 Outstanding Convertible Notes. The Convertible Notes outstanding at any time are all the Convertible Notes properly authenticated by the Trustee except for those canceled by the Trustee, those delivered to it for cancellation, and those described in this Section as not outstanding. If a Convertible Note is replaced pursuant to Section 2.7, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Convertible Note is held by a bona fide purchaser. If Convertible Notes are considered paid under Section 4.1 or converted under Article 11, they cease to be outstanding, and interest (and Liquidated Damages, if any) on them ceases to accrue. Subject to Section 2.9 hereof, a Convertible Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Convertible Note. SECTION 2.9 When Convertible Notes Owned by the Company or an Affiliate are Disregarded. In determining whether the holders of the required principal amount of Convertible Notes have concurred in any direction, waiver or consent, Convertible Notes owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Convertible Notes which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. SECTION 2.10 Temporary Convertible Notes. (a) Until definitive Convertible Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Convertible Notes. Temporary Convertible Notes shall be substantially in the form of definitive Convertible Notes but may have variations that the Company considers appropriate for temporary Convertible Notes and shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Convertible Notes in exchange for temporary Convertible Notes. (b) A Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of certificated Convertible Notes in definitive form only if such transfer complies with Section 2.6 and (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a "clearing agency" registered under the Exchange Act and a successor Depositary is not appointed by the Company within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing. (c) Any Global Security or interest therein that is transferable to the beneficial owners thereof in the form of certificated Convertible Notes in definitive form shall, if held by 13 the Depository, be surrendered by the Depositary to the Trustee, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Convertible Notes of authorized denominations in the form of certificated Convertible Notes in definitive form. Any portion of a Global Security transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $1,000 and any integral multiple thereof and registered in such names as the Depositary shall direct. Any Convertible Notes in the form of certificated Convertible Notes in definitive form delivered in exchange for an interest in the Global Security shall, except as otherwise provided by Section 2.6(c), bear the Restricted Securities Legend set forth in Exhibit A hereto. (d) Prior to any transfer pursuant to Section 2.10(b), the registered holder of a Global Security may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Convertible Notes. SECTION 2.11 Cancellation. The Company at any time may deliver Convertible Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Convertible Notes surrendered to them for registration of transfer, exchange, payment, replacement, conversion, repurchase or cancellation. The Trustee and no one else may cancel Convertible Notes surrendered for registration of transfer, exchange, payment, replacement, conversion, repurchase or cancellation. The Trustee shall dispose of canceled Convertible Notes in accordance with its then customary procedures, unless the Company shall otherwise direct in writing. The Company may not issue new Convertible Notes to replace Convertible Notes that it has paid or repurchased or that have been delivered to the Trustee for cancellation or that any holder has (i) converted pursuant to Article 11 hereof or (ii) submitted for repurchase pursuant to Section 4.6 hereof (unless revoked). SECTION 2.12 Defaulted Interest. If the Company fails to make a payment of interest on the Convertible Notes, it shall pay such defaulted interest plus, to the extent lawful, any interest payable on the defaulted interest. It may pay such defaulted interest, plus any such interest payable on it, to the persons who are holders of Convertible Notes on a subsequent special record date. The Company shall fix any such record date and payment date. At least 15 days before any such record date, the Company shall mail to holders of the Convertible Notes a notice that states the record date, payment date and amount of such interest to be paid. SECTION 2.13 CUSIP Number. The Company in issuing the Convertible Notes may use a "CUSIP" number, and if so, such CUSIP number shall be included in notices of repurchase as a convenience to holders of Convertible Notes; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Convertible Notes and that reliance may be placed only on the other identification numbers printed on the Convertible Notes; and provided further that neither the Trustee nor any Registrar 14 shall have any liability as to the correctness or accuracy of any CUSIP number so printed in the notice. The Company will promptly notify the Trustee of any change in the CUSIP number. SECTION 2.14 Regulation S. The Company agrees that it will refuse to register any transfer of Convertible Notes or any shares of Common Stock issued upon conversion of Convertible Notes that is not made in accordance with the provisions of Regulation S under the Securities Act, pursuant to a registration statement which has been declared effective under the Securities Act or pursuant to an available exemption from the registration requirements of the Securities Act; provided that the provisions of this paragraph shall not be applicable to any Convertible Notes which do not bear a Restricted Securities Legend or to any shares of Common Stock evidenced by certificates which do not bear a Restricted Common Stock Legend. ARTICLE 3 REDEMPTION SECTION 3.1 No Redemption Prior to the Maturity Date. The Company may not redeem the Convertible Notes prior to their maturity. ARTICLE 4 COVENANTS SECTION 4.1 Payment of Convertible Notes. The Company shall pay the principal of and interest (including Liquidated Damages, if any) on the Convertible Notes on the dates and in the manner provided in the Convertible Notes. Principal, interest and the Fundamental Change Payment shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company or a subsidiary of the Company) holds as of 10:00 a.m., New York City time, on that date immediately available funds designated for and sufficient to pay all principal, interest (including Liquidated Damages) or the Fundamental Change Payment then due. To the extent lawful, the Company shall pay interest (including post- petition interest in any proceeding under any Bankruptcy Law) on (i) overdue principal, at the rate borne by Convertible Notes, compounded semiannually; and (ii) overdue installments of interest (without regard to any applicable grace period) at the same rate, compounded semiannually. SECTION 4.2 Rule 144A Information; Periodic Reports to the Trustee. So long as any of the Convertible Notes or shares of Common Stock issuable upon conversion of the Convertible Notes are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, each of the Company and the Guarantor will, during any period in which it is not subject to and in compliance with Section 13 or Section 15(d) of the Exchange Act, provide to each holder and beneficial owner of such restricted securities and to each prospective purchaser (as designated by such holder or beneficial owner) of such restricted 15 securities, upon the request of such holder or beneficial owner or prospective purchaser, any information required to be provided by Rule 144A(d)(4) under the Securities Act. The Company and the Guarantor shall provide to the Trustee such documents, reports and information as required by TIA ss.314 (if any) in the form, in the manner and at the times required by TIA ss.314. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's and the Guarantor's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 4.3 Compliance Certificate. The Company and the Guarantor each shall deliver to the Trustee within 120 days after the end of its respective fiscal year, an Officers' Certificate stating that neither of the signers thereof has any knowledge, after due investigation during the preceding fiscal year made under the supervision of the signing officers, of any Default or Event of Default (or, if any Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge). As of the date hereof, the fiscal year of each of the Company and the Guarantor ends on December 31. The Company shall, so long as any of the Convertible Notes are outstanding, deliver to the Trustee, forthwith upon becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. SECTION 4.4 Maintenance of Office or Agency. The Company shall maintain or cause to be maintained the office or agency required under Section 2.3. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not maintained by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, presentations, surrenders, notices and demands with respect to the Convertible Notes may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Convertible Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designation. SECTION 4.5 Continued Existence. Subject to Article 5, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. SECTION 4.6 Repurchase Upon Fundamental Change. Following a Fundamental Change (the date of each such occurrence being the "Fundamental Change Date") prior to the Maturity Date, the Company shall notify the holders of 16 Convertible Notes in writing of such occurrence and shall make an offer (the "Fundamental Change Offer") to repurchase all Convertible Notes then outstanding at a repurchase price in cash (the "Fundamental Change Payment") equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to, but excluding, the Fundamental Change Payment Date (as defined below). Notice of a Fundamental Change shall be mailed by or at the direction of the Company to the holders of Convertible Notes as shown on the Register and to beneficial owners as required by law not more than 30 days after the applicable Fundamental Change Date at the addresses as shown on the Register of holders maintained by the Registrar, with a copy to the Trustee and the Paying Agent. During the period specified in such notice, holders of Convertible Notes may elect to tender their Convertible Notes in whole or in part in integral multiples of $1,000 in exchange for cash. Payment shall be made by the Company in respect of Convertible Notes properly tendered pursuant to this Section on or before the day (the "Fundamental Change Payment Date") which shall be the sixtieth day after the date of the notice of the applicable Fundamental Change. The notice, which shall govern the terms of the Fundamental Change Offer, shall include such disclosures as are required by law and shall state: (a) that a Fundamental Change Offer is being made pursuant to this Section 4.6 and that all Convertible Notes will be accepted for payment; (b) a brief description of the event, transaction or transactions that constitute the Fundamental Change; (c) the Fundamental Change Payment for each Convertible Note and the Fundamental Change Payment Date; (d) that any Convertible Note not accepted for payment will continue to accrue interest and Liquidated Damages, if applicable, in accordance with the terms thereof; (e) that, unless the Company defaults on making the Fundamental Change Payment, any Convertible Note accepted for payment pursuant to the Fundamental Change Offer shall cease to accrue interest and Liquidated Damages, if applicable, on the Fundamental Change Payment Date and no further interest or Liquidated Damages shall accrue on or after such date; (f) that holders electing to have Convertible Notes repurchased pursuant to a Fundamental Change Offer will be required to deliver, no later than the sixtieth day after the date of the Company's notice described in this paragraph, a repurchase notice electing to require the Company to repurchase all or some portion of the Convertible Notes held by such holder, which notice shall state (i) the name of the holder, (ii) the principal amount of Convertible Notes the holder is delivering for purchase which must be $1,000 or an integral multiple thereof and (iii) the Convertible Note certificate number (if any); (g) that holders of Convertible Notes will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the Fundamental Change Payment Date, a facsimile transmission or letter setting forth (i) the name of the holder, 17 (ii) the principal amount of Convertible Notes the holder delivered for purchase, (iii) the Convertible Note certificate number (if any) delivered, (iv) a statement that such holder is withdrawing his election to have such Convertible Notes purchased, (v) the principal amount of Convertible Notes being withdrawn, (vi) the Convertible Note certificate number (if any) being withdrawn and (vii) the principal amount of Convertible Notes that remains subject to the Fundamental Change Offer, if any; (h) that holders whose Convertible Notes are repurchased only in part will be issued Convertible Notes equal in principal amount to the unpurchased portion of the Convertible Notes surrendered provided that the unpurchased portion shall be in an authorized denomination; (i) the instructions that holders must follow in order to tender their Convertible Notes; and (j) that in the case of a Fundamental Change Payment Date that is also an Interest Payment Date, the interest payment and Liquidated Damages, if any, due on such date shall be paid to the person in whose name the Convertible Note is registered at the close of business on the Record Date immediately preceding such Interest Payment Date. On the Fundamental Change Payment Date, the Company shall accept for payment all Convertible Notes or portions thereof properly tendered pursuant to the Fundamental Change Offer. Prior to 11:00 a.m. (local time in The City of New York) on the business day following the Fundamental Change Payment Date, the Company shall deposit with the Paying Agent money sufficient to pay the Fundamental Change Payment with respect to all Convertible Notes or portions thereof so tendered and accepted and deliver or cause to be delivered to the Trustee the Convertible Notes so accepted together with an Officers' Certificate setting forth the aggregate principal amount of Convertible Notes or portions thereof tendered to and accepted for payment by the Company. Promptly following the Fundamental Change Payment Date, the Paying Agent shall mail or deliver the Fundamental Change Payment to the holders of Convertible Notes so accepted and the Trustee shall as soon as reasonably practicable authenticate and mail or cause to be transferred by book entry to such holders a new Convertible Note equal in principal amount to any unpurchased portion of the Convertible Note surrendered, if any; provided that such new Convertible Notes will be in a principal amount of $1,000 or an integral multiple thereof. Any Convertible Notes not so accepted shall be promptly mailed or delivered by the Company to the holder thereof. In the case of any reclassification, change, consolidation, merger, share exchange, combination or sale or conveyance to which Section 11.6 applies in which the Common Stock of the Company is changed or exchanged into the right to receive stock, securities or other property or assets (including cash) which includes shares of common stock of the Company or another person that are, or upon issuance will be, traded on a United States national securities exchange or approved for trading on an established automated over-the-counter trading market in the United States and such shares constitute at the time such change or exchange becomes effective in excess of 90% of the aggregate fair market value of such stock, securities or other property and assets (including cash) (as determined by the Company, which determination shall be conclusive and binding), then the person formed by such consolidation or resulting from such merger or share exchange or which acquires such assets, as the case may be, shall execute and 18 deliver to the Trustee a supplemental indenture (which shall comply with the TIA as in force at the date of execution of such supplemental indenture) modifying the provisions of this Indenture relating to the right of holders of Convertible Notes to cause the Company to repurchase Convertible Notes following a Fundamental Change, including the applicable provisions of this Section 4.6 and the definitions of Fundamental Change, Change of Control and Termination of Trading, as appropriate, as determined in good faith by the Company (which determination shall be conclusive and binding), to make such provision apply to such common stock and the issuer thereof if different from the Company and Common Stock of the Company (in lieu of the Company and the Common Stock of the Company). There shall be no purchase of any Convertible Notes pursuant to this Section 4.6 if there has occurred (prior to, on or after, as the case may be, the giving, by the holders of such Convertible Notes, of the required Fundamental Change repurchase notice) and is continuing, an Event of Default (other than a default in the payment of the Fundamental Change Payment with respect to such Convertible Notes). The Paying Agent will promptly return to the respective holders any Convertible Notes (x) with respect to which a Fundamental Change repurchase notice has been withdrawn in compliance with this Indenture or (y) held by it during the continuance of an Event of Default (other than a default in the payment of the Fundamental Change Payment with respect to such Convertible Notes) in which case upon such return the Fundamental Change repurchase notice with respect thereto shall be deemed to have been withdrawn. The Fundamental Change Offer shall be made by the Company in compliance with all applicable provisions of the Exchange Act, and all applicable tender offer rules promulgated thereunder, to the extent such laws and regulations are then applicable and shall include all instructions and materials that the Company shall reasonably deem necessary to enable such holders of Convertible Notes to tender their Convertible Notes. SECTION 4.7 Appointments to Fill Vacancies in Trustee's Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.8, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 4.8 Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter enforced, that may affect the Company's obligation to pay the Convertible Notes; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law insofar as such law applies to the Convertible Notes, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. 19 SECTION 4.9 Taxes. The Company shall, and shall cause each of its subsidiaries to, pay prior to delinquency all taxes, assessments and government levies; provided, however, that the Company shall not be required to pay or cause to be paid any such tax, assessment or levy (A) if the failure to do so will not, in the aggregate, have a material adverse impact on the Company and its subsidiaries taken as a whole, or (B) if the amount, applicability or validity is being contested in good faith by appropriate proceedings. SECTION 4.10 Investment Company Act. As long as any Convertible Notes are outstanding, the Company will conduct its business and operations so as not to become an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and will take all steps required in order for it to continue not to be an "investment company" and not to be required to be registered under the Investment Company Act, including, if necessary, redeployment of the assets of the Company. ARTICLE 5 SUCCESSORS SECTION 5.1 When the Company May Merge, Etc. The Company may not, in a single transaction or series of related transactions, consolidate or merge with or into, or effect a share exchange with (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets as an entirety or substantially as an entirety to, any person or entity unless: (a) either (i) the Company shall be the surviving or continuing corporation or (ii) the entity or person formed by or surviving any such consolidation or share exchange or into which the Company is merged (if other than the Company) or the entity or person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company as an entirety or substantially as an entirety (1) shall be a corporation organized and validly existing under the laws of the United States or any State thereof or the District of Columbia and (2) shall expressly assume, by supplemental indenture in form reasonably satisfactory to the Trustee, executed and delivered to the Trustee, the due and punctual payment of the principal of, and interest and Liquidated Damages, if any, on, all of the Convertible Notes and the performance of every covenant of the Convertible Notes and this Indenture and the Registration Agreement on the part of the Company to be performed or observed, including, without limitation, modifications to rights of holders to cause the repurchase of Convertible 20 Notes upon a Fundamental Change in accordance with the penultimate paragraph of Section 4.6 and conversion rights in accordance with Section 11.6 to the extent required by such Sections; (b) immediately after giving effect to such transaction no Default and no Event of Default shall have occurred and be continuing; and (c) the Company or such person shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger, share exchange, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this provision of this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied. For purposes of this Section 5.1, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more subsidiaries of the Company, the capital stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. SECTION 5.2 Successor Corporation Substituted. Upon any such consolidation, merger, share exchange, sale, assignment, conveyance, lease, transfer or other disposition in accordance with Section 5.1, the successor person formed by such consolidation, or share exchange or into which the Company is merged or to which such assignment, conveyance, lease, transfer or other disposition is made will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor had been named as the Company therein, and thereafter (except in the case of a sale, assignment, transfer, lease, conveyance or other disposition) the predecessor corporation will be relieved of all further obligations and covenants under this Indenture and the Convertible Notes. SECTION 5.3 Purchase Option on Fundamental Change. This Article 5 does not affect the obligations of the Company (including without limitation any successor to the Company) under Section 4.6. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.1 Events of Default. An "Event of Default" with respect to any Convertible Notes occurs if: (a) the Company defaults in the payment of principal of the Convertible Notes when due at maturity, upon repurchase, upon acceleration or otherwise; 21 (b) the Company defaults in the payment of any installment of interest or Liquidated Damages on the Convertible Notes when due (including any interest or Liquidated Damages payable in connection with a repurchase pursuant to Section 4.6) and continuance of such default for 30 days or more; or (c) the Company defaults (other than a default set forth in clauses (a) and (b) above and clauses (d) and (e) below) in the performance of, or breaches, any other covenant or warranty of the Company set forth in this Indenture or the Convertible Notes and fails to remedy such default or breach within a period of 60 days after the receipt of written notice from the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Convertible Notes; or (d) the Company defaults in the payment of the Fundamental Change Payment in respect of the Convertible Notes on the date therefor; or (e) the Company fails to provide timely notice of any Fundamental Change in accordance with Section 4.6; or (f) the Company, pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; (iv) makes a general assignment for the benefit of its creditors; (v) makes the admission in writing that it generally is unable to pay its debts as the same become due; or (g) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Law that: (i) is for relief against the Company in an involuntary case; (ii) appoints a Custodian of the Company; or (iii) orders the liquidation of the Company; and in any case, the order or decree remains unstayed and in effect for 90 days. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. 22 SECTION 6.2 Acceleration. If an Event of Default (other than an Event of Default with respect to the Company specified in clauses (f) and (g) of Section 6.1) occurs and is continuing, then and in every such case the Trustee, by written notice to the Company and the Guarantor, or the holders of at least 25% in aggregate principal amount of the then outstanding Convertible Notes, by written notice to the Company, the Guarantor and the Trustee, may declare the unpaid principal of, and accrued and unpaid interest and Liquidated Damages, if any, on, all the Convertible Notes to be due and payable. Upon such declaration such principal amount, and accrued and unpaid interest and Liquidated Damages, if any, shall become immediately due and payable, notwithstanding anything contained in this Indenture or the Convertible Notes to the contrary. If any Event of Default with respect to the Company specified in clauses (f) or (g) of Section 6.1 occurs, all unpaid principal of and accrued and unpaid interest and Liquidated Damages, if any, on the Convertible Notes then outstanding shall become automatically due and payable without any declaration or other act on the part of the Trustee or any holder of Convertible Notes. The holders of a majority in aggregate principal amount of the then outstanding Convertible Notes by notice to the Trustee may rescind an acceleration of the Convertible Notes and its consequences if all existing Events of Default (other than nonpayment of principal of or interest and Liquidated Damages, if any, on the Convertible Notes which has become due solely by virtue of such acceleration) have been cured or waived, the amounts payable to the Trustee under Section 7.7 shall have been paid and if the rescission would not conflict with any judgment or decree of any court of competent jurisdiction. No such rescission shall affect any subsequent Default or Event of Default or impair any right consequent thereto. SECTION 6.3 Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of or interest or Liquidated Damages, if applicable, on the Convertible Notes or to enforce the performance of any provision of the Convertible Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Convertible Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any holder of a Convertible Note in exercising any right or remedy occurring upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.4 Waiver of Past Defaults. The holders of a majority in aggregate principal amount of the Convertible Notes then outstanding may, on behalf of the holders of all the Convertible Notes, waive an existing Default or Event of Default and its consequences, except a Default or Event of Default in the payment of the principal of or interest or Liquidated Damages, if any, on the Convertible Notes (other than the non-payment of principal of and interest and Liquidated Damages, if any, on the Convertible Notes which has become due solely by virtue of an acceleration which has been duly rescinded as provided above), or in respect of a covenant or provision of this Indenture which cannot be modified or amended without the consent of all holders of Convertible Notes. When a Default or 23 Event of Default is waived, it is cured and stops continuing. No waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. SECTION 6.5 Control by Majority. The holders of a majority in aggregate principal amount of the then outstanding Convertible Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other holders of Convertible Notes or that may involve the Trustee in personal liability; provided that the Trustee shall have no duty or obligation (subject to Section 7.1) to ascertain whether or not such actions of forbearances are unduly prejudicial to such holders; provided, further, that the Trustee may take any other action the Trustee deems proper that is not inconsistent with such directions. SECTION 6.6 Limitation on Suits. A holder of a Convertible Note may not pursue any remedy with respect to this Indenture or the Convertible Notes unless: (1) the holder gives to the Trustee notice of a continuing Event of Default; (2) the holders of at least 25% in principal amount of the then outstanding Convertible Notes make a request to the Trustee to pursue the remedy; (3) such holder or holders offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (5) during such 60-day period the holders of a majority in principal amount of the then outstanding Convertible Notes do not give the Trustee a direction inconsistent with the request. A holder of a Convertible Note may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder. SECTION 6.7 Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the right of any holder of a Convertible Note to receive payment of principal, interest and Liquidated Damages, if any, on the Convertible Note, on or after the respective due dates expressed in the Convertible Note, or to bring suit for the enforcement of any such payment on or after such respective dates, or to bring suit for the enforcement of the right to convert the Convertible Note shall not be impaired or affected without the consent of the holder of a Convertible Note. 24 SECTION 6.8 Collection Suit by Trustee. If an Event of Default specified in Section 6.1(a), (b) or (d) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest and Liquidated Damages, if any, remaining unpaid on the Convertible Notes and interest on overdue principal and interest and Liquidated Damages, if any, and such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and all other amounts due the Trustee under Section 7.7. SECTION 6.9 Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the holders of Convertible Notes allowed in any judicial proceedings relative to the Company, its creditors or its property. The Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of the principal of, and interest and Liquidated Damages, if any, on, the Convertible Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due the Trustee under Section 7.7.) and of the holders of the Convertible Notes allowed in such judicial proceedings; and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any Custodian in any such judicial proceeding is hereby authorized by each holder of Convertible Notes to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the holder of Convertible Notes, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder of a Convertible Note any plan of reorganization, arrangement, adjustment or composition affecting the Convertible Notes or the rights of any holder thereof, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding. SECTION 6.10 Priorities. If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.7, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee, and the costs and expenses of collection; 25 Second: to holders of Convertible Notes for amounts due and unpaid on the Convertible Notes for principal, interest and Liquidated Damages, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Convertible Notes for principal, interest and Liquidated Damages, if any, respectively; and Third: to the Company. Except as otherwise provided in Section 2.12, the Trustee may fix a record date and payment date for any payment to holders of Convertible Notes. SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit, other than the Trustee, of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.7 or a suit by holders of more than 10% in principal amount of the then outstanding Convertible Notes. ARTICLE 7 THE TRUSTEE The Trustee hereby accepts the trust imposed upon it by this Indenture and covenants and agrees to perform the same, as herein expressed. Whether or not herein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article 7. SECTION 7.1 Duties of the Trustee. (a) If an Event of Default known to a Trust Officer of the Trustee has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) Except during the continuance of an Event of Default known to the Trustee: (1) The duties of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any 26 statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but shall not be required to confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) or paragraph (e) of this Section; (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer or any other officer of the Trustee to whom such matter is referred, because of such person's knowledge of and familiarity with the particular subject, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5. (d) Whether or not therein expressly so provided, every provision of this Indenture that is in any way related to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk of liability is not reasonably assured to it. (f) The Trustee shall not be liable for interest on or the investment of any money received by it except as the Trustee may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.2 Rights of the Trustee. (a) The Trustee may rely on and shall be protected in acting or refraining from acting upon any resolution, Officers' Certificate, or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, security or other document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter contained therein. (b) Any request, direction, order or demand of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof is herein specifically prescribed). In addition, before the Trustee acts or refrains from acting, it may require an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on 27 such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through attorneys and agents and other persons not regularly in its employ and shall not be responsible for the misconduct or negligence of any attorney or agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith without negligence or willful misconduct which it believes to be authorized or within its discretion, rights or powers. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by Officers of the Company. (f) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder. (g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the holders of Convertible Notes pursuant to the provisions of this Indenture, unless such holders have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred therein or thereby. (h) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, security or other document unless requested in writing to do so by the holders of not less than a majority in aggregate principal amount of the Convertible Notes then outstanding, provided that if the Trustee determines in its discretion to make any such investigation, then it shall be entitled, upon reasonable prior notice and during normal business hours, to examine the books and records and the premises of the Company, personally or by agent or attorney, and the reasonable expenses of every such examination shall be paid by the Company or, if paid by the Trustee or any predecessor Trustee, shall be reimbursed by the Company upon demand. (i) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful misconduct. (j) The Trustee shall not be responsible for the computation of any adjustment to the Conversion Price or for any determination as to whether an adjustment is required and shall not be deemed to have knowledge of any adjustment unless and until it shall have received the notice from the Company contemplated by Section 11.5(j). (k) The rights, privileges, protections, immunities and benefits given to the Trustee, including, but not limited to, its right to be indemnified, are extended to, and shall be enforceable 28 by, the Trustee in each of its capacities hereunder, whether as Agent or otherwise, and to each Agent, custodian and other person employed to act hereunder. SECTION 7.3 Individual Rights of the Trustee. Subject to Sections 7.10 and 7.11, the Trustee in its individual or any other capacity may become the owner or pledgee of Convertible Notes with the same rights it would have if it were not the Trustee and may otherwise deal with the Company or an Affiliate of the Company and receive, collect, hold and retain collections from the Company with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. SECTION 7.4 Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Convertible Notes. It shall not be accountable for the Company's use of the proceeds from the Convertible Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture. It shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Convertible Notes or any other document in connection with the sale of the Convertible Notes or pursuant to this Indenture other than its certificate of authentication. SECTION 7.5 Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to a Trust Officer of the Trustee, the Trustee shall mail to each holder of a Convertible Note a notice of the Default or Event of Default within 60 days after such Default or Event of Default occurs. A Default or an Event of Default shall not be considered known to a Trust Officer of the Trustee unless it is a Default or Event of Default in the payment of principal or interest when due under Section 6.1(a), (b) or (d) or a Trust Officer of the Trustee shall have received written notice thereof, in accordance with this Indenture, from the Company or from the holders of a majority in principal amount of the outstanding Convertible Notes. Except in the case of a Default or Event of Default in payment of principal or interest or Liquidated Damages, if any, on any Convertible Note, the Trustee may withhold the notice if and so long as a trust committee of its officers in good faith determines that withholding the notice is in the interest of the holders of the Convertible Notes. SECTION 7.6 Reports by the Trustee to Holders. Within 60 days after the reporting date stated in Section 10.10, the Trustee shall mail to holders of Convertible Notes a brief report dated as of such reporting date that complies with TIA (S)313(a) (but if no event described in TIA (S)313(a) has occurred within twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA (S)313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA (S)313(c). A copy of each report at the time of its mailing to holders of Convertible Notes shall be filed, at the expense of the Company, by the Trustee with the Commission and each stock exchange or securities market, if any, on which the Convertible Notes are listed. The Company 29 shall timely notify the Trustee when the Convertible Notes are listed or quoted on any stock exchange or securities market. SECTION 7.7 Compensation and Indemnity. The Company and the Guarantor shall pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for its acceptance of this Indenture and its services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and the Guarantor shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by or on behalf of it in addition to the compensation for its services. Such expenses may include the reasonable compensation, disbursements and expenses of the Trustee's agents, counsel and other persons not regularly in its employ. The Company and the Guarantor shall indemnify, defend and hold the Trustee and its directors, officers, employees and agents (collectively with the Trustee the "Indemnitees") harmless from and against every loss, liability or expense, including without limitation damages, fines, suits, actions, demands, penalties, costs, out-of-pocket or incidental expenses, legal fees and expenses, and the costs and expenses of defending any claim (collectively, "Losses"), that may be imposed on, incurred by, or asserted against, any Indemnitee for or in respect of the Trustee's (i) execution and delivery of this Indenture, (ii) compliance or attempted compliance with or reliance upon any instruction or other direction upon which the Trustee is authorized to rely pursuant to the terms of this Indenture and (iii) performance under this Indenture except as set forth in the next paragraph. Any Indemnitee shall notify the Company and the Guarantor promptly of any claim for which it may seek indemnity under this Section. Neither the Company nor the Guarantor need reimburse any expense or indemnify against any Loss incurred by the Trustee or any Indemnitee through its own negligence or willful misconduct. The Trustee shall have a lien prior to the Convertible Notes on all money or property held or collected by the Trustee to secure the Company's and the Guarantor's payment obligations in this Section 7.7, except that held in trust to pay principal and interest and Liquidated Damages, if any, on Convertible Notes. Such liens and the Company's and the Guarantor's obligations under this Section 7.7 shall survive the termination, satisfaction and discharge of this Indenture and the resignation or removal of the Trustee for any reason. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(f) or (g) occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. SECTION 7.8 Replacement of the Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.8. 30 The Trustee may resign at any time and be discharged from the trust hereby created by so notifying the Company. The holders of a majority in principal amount of the then outstanding Convertible Notes may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor Trustee. The Company may remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Custodian or public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the holders of a majority in principal amount of the then outstanding Convertible Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, the Guarantor or the holders of at least 10% in principal amount of the then outstanding Convertible Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee after written request by any holder of a Convertible Note who has been a holder for at least six months fails to comply with Section 7.10, such holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to holders of Convertible Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided that all sums owing to the retiring Trustee hereunder have been paid and subject to the lien provided for in Section 7.7. Notwithstanding the replacement of the Trustee pursuant to this Section 7.8, the Company's and the Guarantor's obligations under Section 7.7 shall continue for the benefit of the retiring Trustee with respect to expenses and liabilities incurred by it prior to such replacement. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the preceding paragraph. 31 SECTION 7.9 Successor Trustee by Merger, etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business (including the trust created by this Indenture) to, another person, the resulting, surviving or transferee person without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein. SECTION 7.10 Eligibility, Disqualification. This Indenture shall always have a Trustee who satisfies the requirements of TIA (S)310(a)(1). The Trustee shall always have a combined capital and surplus as stated in Section 10.10. The Trustee is subject to TIA (S)310(b) regarding the disqualification of a trustee upon acquiring a conflicting interest; provided that the Indentures, dated as of October 1, 1987 and July 31, 1989, between the Trustee and the Guarantor, and the securities issued and to be issued thereunder shall be deemed to be specifically described in this Indenture for the purpose of clause (i) of the first proviso contained in TIA (S)310(b). SECTION 7.11 Preferential Collection of Claims Against Company. The Trustee shall comply with TIA (S)311(a), excluding any creditor relationship set forth in TIA (S)311(b). A Trustee who has resigned or been removed shall be subject to TIA (S)311(a) to the extent indicated therein. ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE SECTION 8.1 Discharge of Indenture. When (a) the Company delivers to the Trustee for cancellation all Convertible Notes theretofore authenticated (other than any other Convertible Notes which have been destroyed, lost or stolen and in lieu of or in substitution for which other Convertible Notes have been authenticated and delivered) and not theretofore canceled, or (b) all the Convertible Notes not theretofore canceled or delivered to the Trustee for cancellation have become due and payable, or by their terms will become due and payable within one year and the Company or the Guarantor deposits with the Trustee, in trust, amounts sufficient to pay at maturity all of the Convertible Notes (other than any Convertible Notes which have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Convertible Notes have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and interest and Liquidated Damages, if any, due or to become due to such date of maturity, and if in either case the Company or the Guarantor also pays, or causes to be paid, all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to (i) rights of registration of transfer, substitution, replacement and exchange and conversion of Convertible Notes, (ii) rights hereunder of holders of Convertible Notes to receive payments of principal of and interest, and Liquidated Damages, if any, on, the Convertible Notes, (iii) the obligations under Sections 2.3 and 8.5 hereof and (iv) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel as required by 32 Section 10.4, and at the Company's cost and expense, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Convertible Notes. SECTION 8.2 Deposited Monies to be Held in Trust by Trustee. Subject to Section 8.4, all monies deposited with the Trustee pursuant to Section 8.1 shall be held in trust and applied by it to the payment, either directly or through the Paying Agent, to the holders of the particular Convertible Notes for the payment of which such monies have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest, and Liquidated Damages, if any. SECTION 8.3 Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies then held by any Paying Agent (other than the Trustee) shall, upon the Company's demand, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies. SECTION 8.4 Return of Unclaimed Monies. Subject to the requirements of applicable law, any monies deposited with or paid to the Trustee for payment of the principal of or interest (including Liquidated Damages) on Convertible Notes and not applied but remaining unclaimed by the holders thereof for two years after the date upon which the principal of or interest (including Liquidated Damages) on such Convertible Notes, as the case may be, have become due and payable, shall be repaid to the Company by the Trustee on demand; provided, however, that the Company, or the Trustee at the request and expense of the Company, shall have first caused notice of such payment to the Company to be mailed to each holder of a Convertible Note entitled thereto no less than 30 days prior to such payment and all liability of the Trustee shall thereupon cease with respect to such monies; and the holder of any of the Convertible Notes shall thereafter look only to the Company for any payment which such holder may be entitled to collect unless an applicable abandoned property law designates another person. In the absence of a written request from the Company or the Guarantor to return unclaimed funds to the Company or the Guarantor, as the case may be, the Trustee shall from time to time deliver all unclaimed funds held by it in any capacity hereunder to or as directed by applicable escheat authorities, as determined by the Trustee in its sole discretion, in accordance with the customary practices and procedures of the Trustee. Any unclaimed funds held by the Trustee in any capacity hereunder pursuant to this Section 8.4 shall be held uninvested and without any liability for interest. SECTION 8.5 Reinstatement. If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 8.2 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and the Guarantor's obligations under this Indenture and the Convertible Notes shall be revived and reinstated as 33 though no deposit had occurred pursuant to Section 8.1 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 8.2; provided, however, that if the Company or the Guarantor makes any payment of interest (including Liquidated Damages) on or principal of any Convertible Note following the reinstatement of its obligations, the Company or the Guarantor, as the case may be, shall be subrogated to the rights of the holders thereof to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE 9 AMENDMENTS SECTION 9.1 Without the Consent of Holders. The Company, the Guarantor and the Trustee may amend this Indenture or the Convertible Notes without notice to or the consent of any holder of a Convertible Note for the purposes of: (a) curing any ambiguity or correcting or supplementing any defective or inconsistent provision contained in this Indenture or making any other changes in the provisions of this Indenture which the Company, the Guarantor and the Trustee may deem necessary or desirable provided such amendment does not materially and adversely affect the legal rights under the Indenture of the holders of Convertible Notes. (b) providing for uncertificated Convertible Notes in addition to or in place of certificated Convertible Notes; (c) evidencing the succession of another person to the Company and providing for the assumption by such successor of the covenants and obligations of the Company hereunder and in the Convertible Notes as permitted by Section 5.1; (d) providing for conversion rights and/or repurchase rights of holders of Convertible Notes in the event of consolidation, merger, share exchange or sale of all or substantially all of the assets of the Company as required to comply with Sections 5.1 and/or 11.6; (e) reducing the Conversion Price; (f) evidencing and providing for the acceptance of appointment under this Indenture of a successor Trustee; (g) making any changes that would provide the holders of the Convertible Notes with any additional rights or benefits or that does not adversely affect the legal rights under this Indenture of any such holder; or (h) complying with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA. 34 SECTION 9.2 With the Consent of Holders. Subject to Section 6.7, the Company, the Guarantor and the Trustee may amend this Indenture or the Convertible Notes with the written consent of the holders of at least a majority in principal amount of the then outstanding Convertible Notes (including consents obtained in connection with a tender offer or exchange offer for Convertible Notes). Subject to Sections 6.4 and 6.7, the holders of a majority in principal amount of the Convertible Notes then outstanding may also waive compliance in a particular instance by the Company with any provision of this Indenture or the Convertible Notes. However, without the consent of each holder of a Convertible Note affected, an amendment or waiver under this Section 9.2 may not (with respect to any Convertible Notes held by a non-consenting holder): (a) reduce the principal amount of Convertible Notes whose holders must consent to an amendment, supplement or waiver; (b) reduce the principal of or change the fixed maturity of any Convertible Note; (c) reduce the rate of, or change the time for payment of, interest, including defaulted interest, or Liquidated Damages on any Convertible Note; (d) waive a Default or Event of Default in the payment of principal of or interest or Liquidated Damages, if any, on the Convertible Notes (except a rescission of acceleration of the Convertible Notes by the holders of at least a majority in aggregate principal amount of the Convertible Notes then outstanding and a waiver of the payment default that resulted from such acceleration); (e) make the principal of, or interest or Liquidated Damages on, any Convertible Note payable in money other than as provided for herein and in the Convertible Notes; (f) make any change in the provisions of this Indenture relating to waivers of past Defaults or Events of Default or the rights of holders of Convertible Notes to receive payments of principal of, or interest or Liquidated Damages on, the Convertible Notes; (g) except as permitted herein (including Section 9.1(a)), increase the Conversion Price or modify the provisions contained herein relating to conversion of the Convertible Notes in a manner adverse to the holders thereof; or (h) make any change to the abilities of holders of Convertible Notes to enforce their rights hereunder or the provisions of clauses (a) through (g) of this Section 9.2. To secure a consent of the holders of Convertible Notes under this Section 9.2, it shall not be necessary for such holders to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. 35 After an amendment or waiver under this Section 9.2 becomes effective, the Company shall mail to holders of Convertible Notes a notice briefly describing the amendment or waiver. SECTION 9.3 Compliance with the Trust Indenture Act. Every amendment to this Indenture or the Convertible Notes shall be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.4 Revocation and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a holder of a Convertible Note is a continuing consent by the holder and every subsequent holder of a Convertible Note or portion of a Convertible Note that evidences the same debt as the consenting holder's Convertible Note, even if notation of the consent is not made on any Convertible Note. However, any such holder or subsequent holder may revoke the consent as to his or her Convertible Note or portion of a Convertible Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate certifying that the holders of the requisite principal amount of Convertible Notes have consented to the amendment or waiver. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the holders of Convertible Notes entitled to consent to any amendment or waiver. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those persons who were holders of Convertible Notes at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such persons continue to be holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from holders of the principal amount of Convertible Notes required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment or waiver becomes effective it shall bind every holder of a Convertible Note, unless it is of the type described in clauses (a) - (h) of Section 9.2. In such case, the amendment or waiver shall bind each holder of a Convertible Note who has consented to it and every subsequent holder of a Convertible Note or portion of a Convertible Note that evidences the same debt as the consenting holder's Convertible Note. SECTION 9.5 Notation on or Exchange of Convertible Notes. Convertible Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 9 may, and shall if required by the Trustee, bear a notation in the form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Convertible Notes so modified as to conform, in the opinion of the Company and the Trustee, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding Convertible Notes without charge to the holders of the Convertible Notes, except as specified in Section 2.6. 36 SECTION 9.6 Trustee Protected. The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 9 if such amendment or supplemental indenture does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If such amendment or supplemental indenture does adversely affect the rights, duties, liabilities or immunities of the Trustee, the Trustee may, but need not, sign it. In signing such amendment or supplemental indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. ARTICLE 10 GENERAL PROVISIONS SECTION 10.1 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA (S)318(c), such duties imposed by such section of the TIA shall control. If any provision of this Indenture expressly modifies or excludes any provision of the TIA that may be so modified or excluded, the Indenture provision so modifying or excluding such provision of the TIA shall be deemed to apply. SECTION 10.2 Notices. Any notice or communication by the Company, the Guarantor or the Trustee to the other parties is duly given if in writing and delivered in person or mailed by first-class mail, with postage prepaid (registered or certified, return receipt requested), or sent by facsimile or overnight air couriers guaranteeing next day delivery, to the other party's address as stated in Section 10.10. The Company, the Guarantor or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to holders of Convertible Notes) shall be deemed to have been duly given at the time delivered by hand if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when transmission is confirmed, if transmitted by facsimile; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Notwithstanding the foregoing, all notices to the Trustee shall be effective only upon receipt by a Trust Officer. Any notice or communication to a holder of a Convertible Note shall be mailed by first-class mail, with postage prepaid, to his or her address shown on the Register kept by the Registrar. Failure to mail a notice or communication to a holder or any defect in the notice or communication shall not affect its sufficiency with respect to other holders. 37 If a notice or communication to a holder of a Convertible Note is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company sends a notice or communication to holders of Convertible Notes, it shall send a copy to the Trustee and each Agent at the same time. All notices or communications shall be in writing. SECTION 10.3 Communication by Holders With Other Holders. Holders may communicate pursuant to TIA (S)312(b) with other holders with respect to their rights under this Indenture or the Convertible Notes. The Company, the Trustee, the Registrar and the Paying Agent shall have the protection of TIA (S)312(c). SECTION 10.4 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or the Guarantor to the Trustee to take any action under this Indenture, the Company or the Guarantor, as the case may be, shall furnish to the Trustee: (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5) stating that, in the opinion of such person, all conditions precedent provided for in this Indenture (including any covenants, compliance with which constitutes a condition precedent) relating to the proposed action have been complied with; and (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5) stating that, in the opinion of such counsel, all such conditions precedent (including any covenants, compliance with which constitutes a condition precedent) have been complied with. SECTION 10.5 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA (S)314(a)(4)) shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and 38 (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Any Officers' Certificate may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such Officer knows that the opinion with respect to the matters upon which his or her certificate may be based as aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon certificates, statements or opinions of, or representations by an officer or officers of the Company, or other persons or firms deemed appropriate by such counsel, unless such counsel knows that the certificates, statements or opinions or representations with respect to the matters upon which his or her opinion may be based as aforesaid are erroneous. Any Officers' Certificate, statement or Opinion of Counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representation by an accountant (who may be an employee of the Company), or firm of accountants, unless such Officer or counsel, as the case may be, knows that the certificate or opinion or representation with respect to the accounting matters upon which his or her certificate, statement or opinion may be based as aforesaid is erroneous. SECTION 10.6 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by, or a meeting of, holders of Convertible Notes. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 10.7 Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the City of New York or the city in which the Corporate Trust Office of the Trustee is located are not required to be open, and a "business day" is any day that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If any date specified in this Indenture is a Legal Holiday, then such date shall be the next succeeding business day. SECTION 10.8 No Recourse Against Others. No director, officer, employee, shareholder or Affiliate, as such, of the Company or the Guarantor from time to time shall have any liability for any obligations of the Company or the Guarantor under the Convertible Notes or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each holder by accepting a Convertible Note waives and releases all such liability. This waiver and release are part of the consideration for the Convertible Notes. Each of such directors, officers, employees, shareholders and Affiliates is a third party beneficiary of this Section 10.8. 39 SECTION 10.9 Counterparts. This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 10.10 Other Provisions. The Company initially appoints the Trustee as Paying Agent, Registrar and authenticating agent. The reporting date for Section 7.6 is May 15 of each year. The first reporting date is the May 15 following the issuance of Convertible Notes hereunder. The Trustee shall always have, or shall be a subsidiary of a bank or bank holding company which has, a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Company's address is: GATX Corporation. 500 West Monroe Street Chicago, Illinois 60661-3676 Attention: Treasurer Facsimile: (312) 621-6645 Telephone: (312) 621-6200 The Guarantor's Address is: GATX Financial Corporation 500 West Monroe Street Chicago, Illinois 60661-3676 Attention: Treasurer Facsimile: (312) 621-6645 Telephone: (312) 621-6200 The Trustee's address is: JP Morgan Chase Bank 450 West 33rd Street, 15th Floor New York, New York 10001 Attention: Institutional Trust Services - Conventional Debt Facsimile: (212) 946-8158 Telephone: (212) 946-3067 40 SECTION 10.11 Governing Law. The laws of the State of New York (including without limitation Section 5-1401 of the New York General Obligations Law or any successor to such statute) shall govern this Indenture and the Convertible Notes. SECTION 10.12 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company, the Guarantor or any of their respective subsidiaries. Any such other indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 10.13 Successors. All agreements of the Company and the Guarantor in this Indenture and the Convertible Notes shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 10.14 Severability. In case any provision in this Indenture or in the Convertible Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.15 Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. ARTICLE 11 CONVERSION OF CONVERTIBLE NOTES SECTION 11.1 Right to Convert. Subject to and upon compliance with the provisions of this Indenture, each holder of Convertible Notes shall have the right, at his or her option, at any time on or before the close of business on the last Trading Day prior to the Maturity Date (except that, (a) with respect to any Convertible Note or portion thereof subject to a duly completed election for repurchase, such right shall terminate on the close of business on the Fundamental Change Payment Date (unless the Company defaults in the payment due upon repurchase or such holder elects to withdraw the submission of such election to repurchase in accordance with section 4.6) to convert the principal amount of any Convertible Note held by such holder, or any portion of such principal amount which is $1,000 or an integral multiple thereof, into that number of fully paid and non-assessable shares of Common Stock (as such shares shall then be constituted) obtained by dividing the principal amount of the Convertible Note or portion thereof to be converted by the Conversion Price in effect at such time, by surrender of the Convertible Note so to be converted in whole or 41 in part in the manner provided in Section 11.2; provided, however, that, so long as no Event of Default shall have occurred and be continuing, the Company at its option, instead of delivering shares of Common Stock, may pay the holder cash in an amount described in Section 11.2 for all or any portion of the Convertible Notes delivered for conversion as more fully described in Section 11.2; provided, further, that the Company shall have the right to pay cash instead of delivering shares of Common Stock for Convertible Notes submitted for conversion on or after the second business day preceding the Maturity Date only if the Company shall have delivered the notice described in Section 11.2 no later than the fourth business day preceding the Maturity Date. Convertible Notes in respect of which a holder has delivered a Fundamental Change repurchase notice exercising the option of such holder to require the Company to repurchase such Convertible Notes may be converted only if the Fundamental Change repurchase notice is withdrawn in accordance with the terms of this Indenture. A holder of Convertible Notes is not entitled to any rights of a holder of Common Stock until such holder of Convertible Notes has converted his or her Convertible Notes to Common Stock, and only to the extent such Convertible Notes are deemed to have been converted to Common Stock under this Article 11. SECTION 11.2 Exercise of Conversion Privilege; Issuance of Common Stock on Conversion; No Adjustment for Interest or Dividends. To exercise, in whole or in part, the conversion privilege with respect to any Convertible Note, the holder of such Convertible Note shall surrender such Convertible Note, duly endorsed, at an office or agency maintained by the Company pursuant to Section 4.4, accompanied by the funds, if any, required by the final paragraph of this Section 11.2 and a duly signed and completed written notice of conversion in the form provided on the Convertible Notes (or such other notice which is acceptable to the Company) to the office or agency that the holder of Convertible Notes elects to convert such Convertible Note or such portion thereof specified in said notice. Such notice shall also state the name or names (with address or addresses) in which the certificate or certificates for shares of Common Stock which are issuable on such conversion shall be issued, and shall be accompanied by transfer taxes, if required pursuant to Section 11.7. Each such Convertible Note surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the registration of such Convertible Note, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder of Convertible Notes or his or her duly authorized attorney. The holder of such Convertible Notes will not be required to pay any tax or duty which may be payable in respect of the issue or delivery of Common Stock on conversion, but will be required to pay any tax or duty which may be payable in respect of any transfer involved in the issue or delivery of Common Stock in a name other than the same name as the registration of such Convertible Note. The date on which the holder of Convertible Notes satisfies each of the requirements provided in this paragraph shall be referred to as the "Conversion Date." No later than the second business day after the Conversion Date, the Company shall notify each holder of Convertible Notes that has satisfied the delivery requirements in the prior paragraph and the Trustee whether the Company elects to pay cash instead of delivering shares of Common Stock upon the conversion of Convertible Notes and, if so, the percentage of the aggregate principal amount of Convertible Notes in respect of which it shall pay in cash. If the Company elects to deliver only shares of Common Stock upon conversion (subject to Section 11.3), the Company shall issue and shall deliver to such holder at the office or agency maintained 42 by the Company for such purpose pursuant to Section 4.4, (1) no later than the fifth business day after the Conversion Date, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such Convertible Note and (2) a check or cash in an amount calculated pursuant to Section 11.3 in respect of any fractional interest in respect of a share of Common Stock arising upon such conversion no later than the tenth business day after the Conversion Date. If the Company elects to pay cash instead of delivering shares of Common Stock for all or any portion of the Convertible Notes being converted, the Company shall issue and shall deliver to such holder at the office or agency maintained by the Company for such purpose pursuant to Section 4.4, no later than the tenth business day after the Conversion Date, (1) a certificate or certificates for the number, if any, of full shares of Common Stock issuable upon the conversion of such Convertible Notes in respect of which the Company elects to deliver shares of Common Stock and (2) a check or cash in an amount equal to (a) the aggregate principal amount of Convertible Notes in respect of which the Company elects to pay cash instead of delivering shares of Common Stock divided by the Conversion Price and then multiplied by the Average Sale Price plus (b) an amount calculated pursuant to Section 11.3 in respect of any fractional interest in respect of a share of Common Stock arising upon such conversion. Unless an Event of Default has occurred, the Company may not change its election with respect to the consideration to be delivered upon conversion of a Convertible Note once the Company has provided the notice described in the previous paragraph. If an Event of Default (other than a default in the payment of cash upon conversion of the Convertible Notes) has occurred and is continuing, the Company may not pay cash upon conversion of any Convertible Notes (other than cash in lieu of fractional shares as described in Section 11.3). Certificates representing shares of Common Stock will not be issued or delivered unless all taxes and duties, if any, payable by the holder have been paid. In case any Convertible Note of a denomination of an integral multiple greater than $1,000 is surrendered for partial conversion, the Company shall execute, and the Trustee shall authenticate and deliver to the holder of the Convertible Note so surrendered, without charge to him or her, a new Convertible Note or Convertible Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Convertible Note. Each conversion shall be deemed to have been effected as to any such Convertible Note (or portion thereof) on the applicable Conversion Date, and the person in whose name any certificate or certificates for shares of Common Stock are issuable upon such conversion shall be deemed to have become on the applicable Conversion Date the holder of record of the shares represented thereby; provided, however, that any such surrender on any date when the Company's stock transfer books are closed shall constitute the person in whose name the certificates are to be issued as the record holder thereof for all purposes on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the date upon which such Convertible Note is surrendered. Any Convertible Note or portion thereof surrendered for conversion during the period from the close of business on the record date for any interest payment through the close of business on the last Trading Day immediately preceding such interest payment date shall be accompanied by payment, in funds acceptable to the Company, of an amount equal to the interest 43 and Liquidated Damages, if any, otherwise payable on such interest payment date on the principal amount being converted; provided however, that no such payment need be made if there exists at the time of conversion a default in the payment of interest or Liquidated Damages, if applicable, on the Convertible Notes. An amount equal to such payment shall be paid by the Company on such interest payment date to the holder of such Convertible Note at the close of business on such record date; provided, however, that if the Company defaults in the payment of interest or Liquidated Damages, if applicable, on such interest payment date, such amount shall be paid to the person who made such required payment. Except as provided above in this Section 11.2, no adjustment shall be made for interest and Liquidated Damages, if any, accrued on any Convertible Note converted or for dividends on any shares issued upon the conversion of such Convertible Note as provided in this Article 11. SECTION 11.3 Cash Payments in Lieu of Fractional Shares. No fractional shares of Common Stock or scrip representing fractional shares shall be issued upon conversion of Convertible Notes. If more than one Convertible Note shall be surrendered for conversion at one time by the same holder, the number of full shares which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Convertible Notes (or specified portions thereof to the extent permitted hereby) so surrendered for conversion. If any fractional share of stock otherwise would be issuable upon the conversion of any Convertible Note or Convertible Notes, the Company shall make an adjustment therefor in cash based upon the Average Sale Price of the Common Stock. SECTION 11.4 Conversion Price. The conversion price shall be as specified in the form of Convertible Note attached as Exhibit A hereto, subject to adjustment as provided in this Article 11. SECTION 11.5 Adjustment of Conversion Price. The Conversion Price shall be adjusted from time to time by the Company as follows: (a) If the Company shall hereafter pay a dividend or make a distribution to all holders of the outstanding Common Stock in shares of Common Stock, the Conversion Price in effect at the opening of business on the date following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the Record Date (as defined in Section 11.5(g)) fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the Record Date. If any dividend or distribution of the type described in this Section 11.5(a) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would then be in effect if such dividend or distribution had not been declared. (b) If the outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be 44 proportionately reduced, and, conversely, if the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (c) If the Company shall issue rights or warrants to all or substantially all holders of its outstanding shares of Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (as defined in Section 11.5(g)) on the Record Date fixed for the determination of shareholders entitled to receive such rights or warrants, the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect at the opening of business on the date after such Record Date by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the Record Date plus the number of shares which the aggregate offering price of the total number of shares so offered would purchase at such Current Market Price, and of which the denominator shall be the number of shares of Common Stock outstanding on the close of business on the Record Date plus the total number of additional shares of Common Stock so offered for subscription or purchase. Such adjustment shall become effective immediately after the opening of business on the day following the Record Date fixed for determination of shareholders entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered pursuant to such rights or warrants, upon the expiration or termination of such rights or warrants the Conversion Price shall be readjusted to be the Conversion Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Current Market Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants, with the value of such consideration, if other than cash, to be determined by the Board of Directors. (d) If the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of capital stock of the Company (other than any dividends or distributions to which Section 11.5(a) applies) or evidences of its indebtedness, cash or other assets (including securities, but excluding (i) any rights or warrants of a type referred to in Section 11.5(c) and (ii) dividends and distributions paid exclusively in cash) (the foregoing hereinafter in this Section 11.5(d) called the "Securities"), then, in each such case, the Conversion Price shall be reduced so that the same shall be equal to the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the Record Date (as defined in Section 11.5(g)) with respect to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in Section 11.5(g)) on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the Securities so distributed applicable to one share of Common Stock 45 and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following the Record Date; provided, however, that in the event the then fair market value (as so determined) of the portion of the Securities so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of Convertible Notes shall have the right to receive upon conversion of a Convertible Note (or any portion thereof) the amount of Securities such holder would have received had such holder converted such Convertible Note (or portion thereof) immediately prior to such Record Date. If such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 11.5(d) by reference to the actual or when issued trading market for any securities comprising all or part of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to Section 11.5(g) to the extent possible. Notwithstanding any other provision of this Section 11.5(d) to the contrary, rights, warrants, evidences of indebtedness, other securities, cash or other assets (including, without limitation, any rights distributed pursuant to any shareholder rights plan) shall be deemed not to have been distributed for purposes of this Section 11.5(d) if the Company makes proper provision so that each holder of Convertible Notes who converts a Convertible Note (or any portion thereof) after the date fixed for determination of shareholders entitled to receive such distribution shall be entitled to receive upon such conversion, in addition to the shares of Common Stock issuable upon such conversion, the amount and kind of such distributions that such holder would have been entitled to receive if such holder had, immediately prior to such determination date, converted such Convertible Note into Common Stock. Rights or warrants distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Trigger Event"): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 11.5(d) (and no adjustment to the Conversion Price under this Section 11.5(d) shall be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment to the Conversion Price under this Section 11.5(d) shall be made. If any such rights or warrants, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to subsequent events, upon the occurrence of each of which such rights or warrants shall become exercisable to purchase different securities, evidences of indebtedness or other assets, then the occurrence of each such event shall be deemed to be such date of issuance and record date with respect to new rights or warrants (and a termination or expiration of the existing rights or warrants without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event with respect thereto, that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Price under this Section 11.5 was made, (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be 46 readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights and warrants had not been issued. For purposes of this Section 11.5(d) and Sections 11.5(a) and (c), any dividend or distribution to which this Section 11.5(d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 11.5(c) applies (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants other than such shares of Common Stock or rights or warrants to which Section 11.5(c) applies (and any Conversion Price reduction required by this Section 11.5(d) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Price reduction required by Sections 11.5(a) and (c) with respect to such dividend or distribution shall then be made, except that (A) the Record Date of such dividend or distribution shall be substituted as "the date fixed for the determination of shareholders entitled to receive such dividend or other distribution", "Record Date fixed for such determination" and "Record Date" within the meaning of Section 11.5(a) and as "the date fixed for the determination of shareholders entitled to receive such rights or warrants", "the Record Date fixed for the determination of the shareholders entitled to receive such rights or warrants" and "such Record Date" within the meaning of Section 11.5(c) and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of Section 11.5(a)). (c) If the Company shall, by dividend or otherwise, distribute cash to all holders of its Common Stock (excluding any cash that is distributed upon a merger, share exchange or consolidation to which Section 11.6 applies or as part of a distribution referred to in Section 11.5(d)) in an aggregate amount that, combined together with (1) the aggregate amount of any other such all-cash distributions to all holders of its Common Stock within the 12 months preceding the date of payment of such distribution, and in respect of which no adjustment pursuant to this Section 11.5(e) has been made, and (2) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) of consideration payable in respect of any tender offer by the Company or any of its subsidiaries for all or any portion of the Common Stock concluded within the 12 months preceding the date of payment of such distribution, and in respect of which no adjustment pursuant to Section 11.5(f) has been made, exceeds 10% of the product of the Current Market Price (determined as provided in Section 11.5(g)) on the Record Date with respect to such distribution times the number of shares of Common Stock outstanding on such date, then, and in each such case, immediately after the close of business on such date, the Conversion Price shall be reduced so that it shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on such Record Date by a fraction (i) the numerator of which shall be equal to the Current Market Price on the Record 47 Date less an amount equal to the quotient of (x) the excess of such combined amount over such 10% and (y) the number of shares of Common Stock outstanding on the Record Date and (ii) the denominator of which shall be equal to the Current Market Price on such Record Date; provided, however, that if the portion of the cash so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price of the Common Stock on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of Convertible Notes shall have the right to receive upon conversion of a Convertible Note (or any portion thereof) the amount of cash such holder would have received had such holder converted such Convertible Note (or portion thereof) immediately prior to such Record Date. If such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such dividend or distribution had not been declared. Any cash distribution to all holders of Common Stock as to which the Company makes the election permitted by Section 11.5(m) and as to which the Company has complied with the requirements of such Section shall be treated as not having been made for all purposes of this Section 11.5(e). (f) If a tender offer made by the Company or any of its subsidiaries for all or any portion of the Common Stock expires and such tender offer (as amended upon the expiration thereof) requires the payment to shareholders (based on the acceptance (up to any maximum specified in the terms of the tender offer) of Purchased Shares (as defined below)) of an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) that, combined together with (1) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors), as of the expiration of such tender offer, of consideration payable in respect of any other tender offers, by the Company or any of its subsidiaries for all or any portion of the Common Stock, expiring within the 12 months preceding the expiration of such tender offer and in respect of which no adjustment pursuant to this Section 11.5(f) has been made and (2) the aggregate amount of any such all-cash distributions to all holders of the Common Stock within 12 months preceding the expiration of such tender offer and in respect of which no adjustment pursuant to Section 11.5(e) has been made, exceeds 10% of the product of the Current Market Price (determined as provided in Section 11.5(g)) as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender offer (as it may be amended) times the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time, then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to close of business on the date of the Expiration Time by a fraction of which the numerator shall be the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time multiplied by the Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time and the denominator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the acceptance (up to any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) on the Expiration Time and the Current Market Price of the Common Stock on the 48 Trading Day next succeeding the Expiration Time, such reduction (if any) to become effective immediately prior to the opening of business on the day following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such tender offer had not been made. If the application of this Section 11.5(f) to any tender offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer under this Section 11.5(f). (g) For purposes of this Section 11.5, the following terms shall have the meaning indicated: (1) "closing price" with respect to any securities on any day means the closing price on such day or, if no such sale takes place on such day, the average of the reported high and low prices on such day, in each case on the Nasdaq National Market or New York Stock Exchange, as applicable, or, if such security is not listed or admitted to trading on such national market or exchange, on the principal national securities exchange or quotation system on which such security is quoted or listed or admitted to trading, or, if not quoted or listed or admitted to trading on any national securities exchange or quotation system, the average of the high and low prices of such security on the over-the-counter market on the day in question as reported by the National Quotation Bureau Incorporated, or a similar generally accepted reporting service, or, if not so available, in such manner as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose, or a price determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors. (2) "Current Market Price" means the average of the daily closing prices per share of Common Stock for the 10 consecutive Trading Days immediately prior to the date in question; provided, however, that (1) if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Sections 11.5(a), (b), (c), (d), (e) or (f) occurs during such 10 consecutive Trading Days, the closing price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such closing price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event, (2) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 11.5(a), (b), (c), (d), (e) or (f) occurs on or after the "ex" date for the issuance or distribution requiring such computation and prior to the day in question, the closing price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such closing price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event, and (3) if the "ex" date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant to clause (1) or (2) of this proviso, the closing price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value (as determined by the Board of Directors in a manner consistent with any determination of such value for purposes of Sections 11.5(d) or (f), whose determination shall be conclusive and described in a resolution of the Board of Directors) of the evidences of indebtedness, shares of capital stock or assets being distributed 49 applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For purposes of any computation under Section 11.5(f), the Current Market Price on any date shall be deemed to be the average of the daily closing prices per share of Common Stock for such day and the next two succeeding Trading Days; provided, however, that if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 11.5(a), (b), (c), (d), (e) or (f) occurs on or after the Expiration Time for the tender or exchange offer requiring such computation and prior to the day in question, the closing price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term "ex" date, (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the closing price was obtained without the right to receive such issuance or distribution, (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, and (3) when used with respect to any tender or exchange offer means the first date on which the Common Stock trades regular way on such exchange or in such market after the Expiration Time of such offer. Notwithstanding the foregoing, whenever successive adjustments to the Conversion Price are called for pursuant to this Section 11.5, such adjustments shall be made to the Current Market Price as may be necessary or appropriate to effectuate the intent of this Section 11.5 and to avoid unjust or inequitable results as determined in good faith by the Board of Directors. (3) "fair market value" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction. (4) "Record Date" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise). (h) The Company may make such reductions in the Conversion Price, in addition to those required by Sections 11.5(a), (b), (c), (d), (e) and (f), as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes. The Company from time to time may, to the extent permitted by law, reduce the Conversion Price by any amount for any period of at least 20 days, if the Board of Directors has made a determination that such reduction would be in the Company's best interests, which determination shall be conclusive and described in a resolution of the Board of Directors. The reduction in Conversion Price shall be irrevocable during this period. Whenever the Conversion Price is reduced pursuant to the preceding sentence, the Company shall mail to the holders of Convertible Notes at his or her last address appearing on the Register a notice of the reduction at 50 least 15 days prior to the date the reduced Conversion Price takes effect, and such notice shall state the reduced Conversion Price and the period during which it will be in effect. (i) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% of the Conversion Price then in effect; provided, however, that any adjustments which by reason of this Section 11.5(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article 11 shall be made by the Company and shall be made to the nearest cent or to the nearest one hundredth of a share, as the case may be. No adjustment need be made for a change in the par value or no par value of the Common Stock. (j) Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers' Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Price to each holder of Convertible Notes at his or her last address appearing on the Register of holders maintained for that purpose within 20 days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment. (k) In any case in which this Section 11.5 provides that an adjustment shall become effective immediately after a Record Date for an event, the Company may defer until the occurrence of such event issuing to the holder of any Convertible Note converted after such Record Date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment. (l) For purposes of this Section 11.5, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (m) In lieu of making any adjustment to the Conversion Price pursuant to Section 11.5(e), the Company may elect to reserve an amount of cash for distribution to the holders of Convertible Notes upon the conversion of the Convertible Notes so that any such holder converting Convertible Notes will receive upon such conversion, in addition to the shares of Common Stock and other items to which such holder is entitled, the full amount of cash which such holder would have received if such holder had, immediately prior to the Record Date for such distribution of cash, converted its Convertible Notes into Common Stock, together with any interest accrued with respect to such amount, in accordance with this Section 11.5(m). The Company may make such election by providing an Officers' Certificate to the Trustee to such effect on or prior to the payment date for any such distribution and depositing with the Trustee 51 on or prior to such date an amount of cash equal to the aggregate amount that the holders of Convertible Notes would have received if such holders had, immediately prior to the Record Date for such distribution, converted all of the Convertible Notes into Common Stock. Any such funds so deposited by the Company with the Trustee shall be invested by the Trustee pursuant to arrangements reasonably satisfactory to the Trustee in U.S. Government Obligations with a maturity not more than three (3) months from the date of issuance. Upon conversion of Convertible Notes by a holder thereof, such holder shall be entitled to receive, in addition to the Common Stock issuable upon conversion, an amount of cash equal to the amount such holder would have received if such holder had, immediately prior to the Record Date for such distribution, converted its Convertible Note into Common Stock, along with such holder's pro-rata share of any accrued interest earned as a consequence of the investment of such funds. Promptly after making an election pursuant to this Section 11.5(m), the Company shall give or shall cause to be given notice to all holders of Convertible Notes of such election, which notice shall state the amount of cash per $1,000 principal amount of Convertible Notes such holders shall be entitled to receive (excluding interest) upon conversion of the Convertible Notes as a consequence of the Company having made such election. SECTION 11.6 Effect of Reclassification, Consolidation, Merger or Sale. If any of the following events occur: (i) any reclassification or change of the outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (ii) any consolidation, merger, share exchange or combination of the Company with another corporation as a result of which holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, or (iii) any sale or conveyance of the properties and assets of the Company as an entirety or substantially as an entirety to any other corporation as a result of which holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, then the Company or the successor or purchasing corporation, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the TIA as in force at the date of execution of such supplemental indenture if such supplemental indenture is then required to so comply) providing that the Convertible Notes shall be convertible into the kind and amount of shares of stock and other securities or property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, share exchange, combination, sale or conveyance by a holder of a number of shares of Common Stock issuable upon conversion of the Convertible Notes (assuming, for such purposes, a sufficient number of authorized shares of Common Stock available to convert all such Convertible Notes) immediately prior to such reclassification, change, consolidation, merger, share exchange, combination, sale or conveyance assuming such holder of Common Stock did not exercise his or her rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such consolidation, merger, share exchange, sale or conveyance (provided that, if the kind or amount of securities, cash or other property receivable upon such consolidation, merger, share exchange, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election have not been exercised ("non-electing share"), then, for the purposes of this Section 11.6, the kind and amount of securities, cash or other property receivable upon such consolidation, merger, share exchange, sale or conveyance for each non-electing share shall be deemed to be the kind and 52 amount so receivable per share by a plurality of the non-electing shares). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 11. If, in the case of any such reclassification, change, consolidation, merger, share exchange, combination, sale or conveyance, the stock or other securities and assets receivable thereupon by a holder of shares of Common Stock includes shares of stock or other securities and assets of a corporation other than the successor or purchasing corporation, as the case may be, in such reclassification, change, consolidation, merger, share exchange, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the holders of the Convertible Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing. The Company shall cause notice of the execution of such supplemental indenture to be mailed to each holder of Convertible Notes at his or her address appearing on the Register within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. The above provisions of this Section 11.6 shall similarly apply to successive reclassifications, changes, consolidations, mergers, share exchanges, combinations, sales and conveyances. If this Section 11.6 applies to any event or occurrence, Section 11.5 shall not apply. SECTION 11.7 Taxes on Shares Issued. The issue of stock certificates on conversions of Convertible Notes shall be made without charge to the converting holder for any tax in respect of the issue thereof. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of stock in any name other than that of the holder of any Convertible Note converted, and the Company shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. SECTION 11.8 Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares to provide for the conversion of the Convertible Notes from time to time as such Convertible Notes are presented for conversion. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Convertible Notes, the Company shall take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Price. 53 The Company covenants that all shares of Common Stock issued upon conversion of Convertible Notes will be fully paid and non- assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof. The Company further covenants that as long as the Common Stock is listed on the New York Stock Exchange, or its successor, the Company shall cause all Common Stock issuable upon conversion of the Convertible Notes to be eligible for such listing in accordance with, and at the times required under, the requirements of such market, and if at any time the Common Stock becomes quoted on the Nasdaq National Market or listed on any other national securities exchange, the Company shall cause all Common Stock issuable upon conversion of the Convertible Notes to be so quoted or listed and kept so quoted or listed. SECTION 11.9 Responsibility of Trustee. The Trustee shall not at any time be under any duty of responsibility to any holders of Convertible Notes to determine whether any facts exist which may require any adjustment of the Conversion Price, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Convertible Note; and the Trustee makes no representations with respect thereto. Subject to the provisions of Section 7.1, the Trustee shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Convertible Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 11. Without limiting the generality of the foregoing, the Trustee shall not have any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 11.6 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by holders of Convertible Notes upon the conversion of their Convertible Notes after any event referred to in such Section 11.6 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.1, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers' Certificate and Opinion of Counsel (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. SECTION 11.10 Notice to Holders Prior to Certain Actions. If (a) the Company declares a dividend (or any other distribution) on its Common Stock (other than in cash out of retained earnings or other than a dividend that results in an adjustment in the Conversion Price pursuant to Section 11.5 as to which the Company has made an election in accordance with Section 11.5(m)); or 54 (b) the Company authorizes the granting to all or substantially all of the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class of Common Stock or any other rights or warrants (other than rights or warrants referred to in the second paragraph of Section 11.5(d)); or (c) there is any reclassification of the Common Stock (other than a subdivision or combination of outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or any consolidation, merger or share exchange to which the Company is a party and for which approval of any shareholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company; or (d) there is any voluntary or involuntary dissolution, liquidation or winding-up of the Company; then the Company shall cause to be filed with the Trustee and to be mailed to each holder of Convertible Notes at his or her address appearing on the Register maintained for that purpose as promptly as possible but in any event at least 15 days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding-up. SECTION 11.11 Restriction on Common Stock Issuable Upon Conversion. (a) Shares of Common Stock to be issued upon conversion of Convertible Notes prior to the effectiveness of a Shelf Registration Statement shall be physically delivered in certificated form to the holders converting such Securities, and the certificate representing such shares of Common Stock shall bear the Restricted Common Stock Legend unless removed in accordance with Section 11.11(c). (b) If (i) shares of Common Stock to be issued upon conversion of a Convertible Note prior to the effectiveness of a Shelf Registration Statement are to be registered in a name other than that of the holder of such Convertible Note or (ii) shares of Common Stock represented by a certificate bearing the Restricted Common Stock Legend are transferred subsequently by such holder, then, unless the Shelf Registration Statement has become effective and such shares are being transferred pursuant to the Shelf Registration Statement, the holder must deliver to the transfer agent for the Common Stock a certificate in substantially the form of Exhibit C as to compliance with the restrictions on transfer applicable to such shares of Common Stock, and neither the transfer agent nor the registrar for the Common Stock shall be required to register any transfer of such Common Stock not so accompanied by a properly completed certificate. 55 (c) Except in connection with a Shelf Registration Statement, if certificates representing shares of Common Stock are issued upon the registration of transfer, exchange or replacement of any other certificate representing shares of Common Stock bearing the Restricted Common Stock Legend, or if a request is made to remove such Restricted Common Stock Legend from certificates representing shares of Common Stock, the certificates so issued shall bear the Restricted Common Stock Legend, or the Restricted Common Stock Legend shall not be removed, as the case may be, unless there is delivered to the Company such satisfactory evidence, which, in the case of a transfer made pursuant to Rule 144 under the Securities Act, may include an opinion of counsel as may be reasonably required by the Company, that neither the legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities Act or that such shares of Common Stock are securities that are not "restricted" within the meaning of Rule 144 under the Securities Act. Upon provision to the Company of such reasonably satisfactory evidence, the Company shall cause the transfer agent for the Common Stock to countersign and deliver certificates representing shares of Common Stock that do not bear the legend. ARTICLE 12 Guarantee --------- SECTION 12.1 Terms of the Guarantee. Subject to the provisions of this Article 12, the Guarantor hereby fully and unconditionally guarantees, to each holder of a Convertible Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity or enforceability of this Indenture, the Convertible Notes or the obligations of the Company under this Indenture or the Convertible Notes, that: (i) the principal of, and interest and Liquidated Damages, if any, on the Convertible Notes will be paid in full when due, whether at maturity, by acceleration, upon a Fundamental Change or otherwise, and interest on the overdue principal and (to the extent permitted by law) interest and liquidated damages, if any, on the Convertible Notes will be promptly paid in full; (ii) all other obligations of the Company to the holders or the Trustee under this Indenture or the Convertible Notes will be promptly paid in full or performed, all in accordance with the terms of this Indenture and the Convertible Notes; and (iii) in case of any extension of time in payment or renewal of any Convertible Notes or any of such other obligations, they will be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed, or failing performance of any other obligation of the Company to the holders or the Trustee, for whatever reason, the Guarantor will be obligated to pay, or to perform or cause the performance of, the same before such failure becomes an Event of Default. The Guarantor agrees that this is a guarantee of payment not a guarantee of collection. The Guarantor hereby agrees that its obligations with regard to this Guarantee shall be unconditional, irrespective of the validity, regularity or enforceability of the Convertible Notes or the obligations of the Company under this Indenture, the absence of any action to enforce the same, the recovery of any judgment against the Company or any other obligor with respect to this Indenture, the Convertible Notes or the obligations of the Company under this Indenture or the Convertible Notes, any action to enforce the same or any other circumstances (other than 56 complete performance) which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor further, to the extent permitted by law, hereby waives (a) demand, protest and notice of any kind, (b) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other person or the failure of the Trustee, the holders or the Company (each a "Benefitted Party") to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other person, (c) notice of the existence, creation or incurring of any new or additional indebtedness or obligation, (d) any right to require a proceeding first against the Company or right to require the prior disposition of the assets of the Company to meet its obligations, (e) any defense based upon an election of remedies by a Benefitted Party, including but not limited to an election at law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal, (f) any defense arising because of a Benefitted Party's election, in any proceeding instituted under Bankruptcy Law, of the application of 11 U.S.C. Section 1111(b)(2) or (g) any defense based on any borrowing or grant of a security interest under 11 U.S.C. Section 364. The Guarantor hereby covenants that the Guarantee will not be discharged except by complete performance of the obligations contained in the Convertible Notes, the Guarantee and this Indenture. If any holder or the Trustee is required by any court or otherwise to return to either the Company or the Guarantor, or any custodian acting in relation to either the Company or the Guarantor, any amount paid by the Company or the Guarantor to the Trustee or such holder, the Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. The Guarantor agrees that it will not be entitled to any right of subrogation in relation to the holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. The Guarantor agrees that, as between it, on the one hand, and the holders of Convertible Notes and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes hereof, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purpose of its Guarantee. SECTION 12.2 Limitation of the Guarantor's Liability. The Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture, including, without limitation, the net proceeds of the sale of the Convertible Notes. The Guarantor and by its acceptance hereof, each beneficiary hereof, hereby confirms that it is its intention that the Guarantee not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal, state or foreign law to the extent applicable to the Guarantee. To effectuate the foregoing intention, each such person hereby irrevocably agrees that the obligation of the Guarantor under the Guarantee under this Article 12 shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of the Guarantor that are relevant under such laws, result in the obligations of the Guarantor in respect of such maximum amount not constituting a fraudulent conveyance. 57 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed and attested, all as of the date first above written, signifying their agreements contained in this Indenture. GATX CORPORATION By: /s/ William J. Hasek -------------------------------- Name: William J. Hasek Title: Treasurer GATX FINANCIAL CORPORATION By: /s/ Brian A. Kenney -------------------------------- Name: Brian A. Kenney Title: Vice President and Chief Financial Officer JPMORGAN CHASE BANK, as Trustee By: /s/ Mark A. Rullo -------------------------------- Name: Mark A. Rullo Title: Vice President EXHIBIT A (Face of Security) [Global Securities Legend] [The following legend shall appear on the face of each Global Security: THIS CONVERTIBLE NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS CONVERTIBLE NOTE FOR ALL PURPOSES.] [The following legend shall appear on the face of each Global Security for which The Depository Trust Company is to be the Depositary: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY THE AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED CONVERTIBLE NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OR SUCH SUCCESSOR DEPOSITARY.] [Restricted Securities Legend] THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUE HEREOF (OR ANY PREDECESSOR SECURITY HEREOF) OR (Y) BY ANY HOLDER THAT WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING A-1 THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT. A-2 No. _______ $ CUSIP ___________ GATX CORPORATION 7.5% CONVERTIBLE SENIOR NOTE DUE 2007 GATX Corporation promises to pay to or registered assigns, the principal sum of on February 1, 2007 Interest Payment Dates: February 1 and August 1, commencing August 1, 2002 Regular Record Dates: January 15 and July 15. GATX CORPORATION By: ---------------------------------------- Title: Certificate of Authentication This is one of the Convertible Senior Notes described in the within- mentioned Indenture. JPMORGAN CHASE BANK, as Trustee By: ---------------------------------------- Authorized Signatory Dated: A-3 (Back of Security) A-4 GATX CORPORATION 7.5% CONVERTIBLE SENIOR NOTE DUE 2007 1. Interest. GATX Corporation, a New York corporation (the "Company"), promises to pay interest on the principal amount of this Convertible Senior Note at the rate per annum shown above. The Company will pay interest semi-annually in arrears on February 1 and August 1 of each year, beginning August 1, 2002. Interest on the Convertible Notes will accrue from the most recent interest payment date to which interest has been paid or, if no interest has been paid, from February 1, 2002. Interest (including any Liquidated Damages) will be computed on the basis of a 360-day year composed of twelve 30-day months and the actual number of days elapsed in any partial month. 2. Method of Payment. The Company will pay interest (and Liquidated Damages, if any) on the Convertible Notes (except defaulted interest) to the person in whose name each Convertible Note is registered at the close of business on the January 15 or July 15 immediately preceding the relevant interest payment date (each a "Regular Record Date") (other than with respect to a Convertible Note or portion thereof repurchased in connection with a Fundamental Change on a repurchase date, during the period from the close of business on a Regular Record Date to (but excluding) the next succeeding interest payment date, in which case accrued interest (and Liquidated Damages, if any) shall be payable (unless such Convertible Note or portion thereof is converted) to the holder of the Convertible Note or portion thereof repurchased in accordance with the applicable repurchase provisions of the Indenture). The holder must surrender Convertible Notes to a Paying Agent to collect principal payments. The Company will pay the principal of, and interest (including Liquidated Damages, if any) on, the Convertible Notes at the office or agency of the Company maintained for such purpose, in money of the United States that at the time of payment is legal tender for payment of public and private debts. Until otherwise designated by the Company, the Company's office or agency maintained for such purpose will be the principal Corporate Trust Office of the Trustee (as defined below). However, the Company may pay principal, and interest (including Liquidated Damages, if any) by check payable in such money, and may mail such check to the holders of the Convertible Notes at their respective addresses as set forth in the Register of holders of Convertible Notes. 3. Paying Agent and Registrar. JPMorgan Chase Bank (together with any successor Trustee under the Indenture referred to below, the "Trustee"), will act as Paying Agent and Registrar. The Company may change the Paying Agent, Registrar or co-registrar without prior notice. Subject to certain limitations in the Indenture, the Company or any of its subsidiaries may act in any such capacity. 4. Indenture. The Company issued the Convertible Notes under an Indenture dated as of February 1, 2002 (the "Indenture") by and among the Company, the Guarantor and the Trustee. The terms of the Convertible Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-77bbbb) (the "TIA") as in effect on the date of the Indenture. The Convertible Notes are subject to, and qualified by, all such terms, certain of which are A-5 summarized hereon, and holders are referred to the Indenture and the TIA for a statement of such terms. The Convertible Notes are unsecured general obligations of the Company limited to (except as otherwise provided in the Indenture) $175,000,000 in aggregate principal amount. Capitalized terms not defined below have the same meaning as is given them in the Indenture. 5. Fundamental Change. Upon the occurrence of a Fundamental Change, the Company shall make a Fundamental Change Offer to repurchase all outstanding Convertible Notes at a price equal to 100% of the aggregate principal amount of the Convertible Notes, plus accrued and unpaid interest (and Liquidated Damages, if any) to, but excluding, the date of repurchase, such offer to be made as provided in the Indenture. To accept the Fundamental Change Offer, the holder hereof must comply with the terms thereof, including surrendering this Convertible Note, with the "Option of Holder to Elect Repurchase" portion hereof completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent, at the address specified in the notice of the Fundamental Change Offer mailed to holders as provided in the Indenture, prior to termination of the Fundamental Change Offer. 6. Denominations, Transfer and Exchange. The Convertible Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Convertible Notes may be registered and Convertible Notes may be exchanged as provided in the Indenture. As a condition of transfer, the Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and the Company and the Registrar may require a holder to pay any taxes and fees required by law or permitted by the Indenture. The Company or the Registrar need not exchange or register the transfer of any Convertible Note or portion of a Convertible Note submitted for repurchase. 7. Persons Deemed Owners. The registered holder of a Convertible Note may be treated as its owner for all purposes. 8. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Convertible Notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the then outstanding Convertible Notes, and any existing default may be waived with the consent of the holders of a majority in principal amount of the then outstanding Convertible Notes. Without the consent of any holder, the Indenture or the Convertible Notes may be amended to: (a) cure any ambiguity or correct or supplement any defective or inconsistent provision contained in the Indenture, or make any other changes in the provisions of the Indenture which the Company and the Trustee may deem necessary or desirable provided such amendment does not materially and adversely affect the legal rights under the Indenture of the holders of Convertible Notes; (b) provide for uncertificated Convertible Notes in addition to or in place of certificated Convertible Notes; (c) evidence the succession of another person to the Company and providing for the assumption by such successor of the covenants and obligations of the Company thereunder and in the Convertible Notes as permitted by Section 5.1 of the Indenture; (d) provide for conversion rights and/or repurchase rights of holders of Convertible A-6 Notes in the event of consolidation, merger, share exchange or sale of all or substantially all of the assets of the Company as required to comply with Sections 5.1 and/or 11.6 of the Indenture; (e) reduce the Conversion Price; (f) evidence and provide for the acceptance of the appointment under the Indenture of a successor Trustee; (g) make any change that would provide any additional rights or benefits to the holders of Convertible Notes or that does not adversely affect the legal rights under the Indenture of any such holder; or (h) comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA. Without the consent of each holder affected, an amendment or waiver may not (with respect to any Convertible Notes held by a non-consenting holder): (a) reduce the principal amount of Convertible Notes whose holders must consent to an amendment, supplement or waiver; (b) reduce the principal of or change the fixed maturity of any Convertible Note; (c) reduce the rate of or change the time for payment of interest, including defaulted interest, or Liquidated Damages on any Convertible Notes; (d) waive a Default or Event of Default in the payment of principal of, or interest or Liquidated Damages on, the Convertible Notes (except a rescission of acceleration of the Convertible Notes by the holders of at least a majority in aggregate principal amount of the Convertible Notes and a waiver of the payment default that resulted from such acceleration); (e) make the principal of, or interest or Liquidated Damages on, any Convertible Note payable in money other than as provided for in the Indenture and in the Convertible Notes; (f) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of Convertible Notes to receive payments of principal of, or interest or Liquidated Damages, on the Convertible Notes; (g) except as permitted by the Indenture (including Section 9.1(a)), increase the Conversion Price or modify the provisions of the Indenture relating to conversion of the Convertible Notes in a manner adverse to the holders thereof or (h) make any change to the ability of holder of Convertible Notes to enforce their rights under the Indenture or the provisions of clauses (a) through (h) of Section 9.2 of the Indenture. 9. Defaults and Remedies. An Event of Default is: (a) default in payment of the principal of, the Convertible Notes, when due at maturity, upon repurchase, upon acceleration or otherwise; (b) default for 30 days or more in payment of any installment of interest or Liquidated Damages on the Convertible Notes; (c) default by the Company for 60 days or more after notice in the observance or performance of any other covenants in the Indenture; (d) default in the payment of the Fundamental Change Payment in respect of the Convertible Notes on the date therefor; (e) failure to provide timely notice of a Fundamental Change; or (f) certain events involving bankruptcy, insolvency or reorganization of the Company. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the then outstanding Convertible Notes may declare the unpaid principal of, and accrued and unpaid interest and Liquidated Damages, if any, on, all Convertible Notes then outstanding to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy, insolvency, or reorganization with respect to the Company, all outstanding Convertible Notes become due and payable without further action or notice. Holders of Convertible Notes may not enforce the Indenture or the Convertible Notes except as provided in the Indenture. The Trustee may require an indemnity satisfactory to it before it enforces the Indenture or the Convertible Notes. Subject to certain limitations, holders of a majority in principal amount of the then outstanding Convertible A-7 Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders notice of any continuing default (except a default in payment of principal, interest or Liquidated Damages, if applicable) if it determines that withholding notice is in their interests. The Company must furnish annual compliance certificates to the Trustee. 10. Guarantor. The Convertible Notes are fully and unconditionally guaranteed by GATX Financial Corporation, a Delaware corporation, pursuant to the terms of the Guarantee as specifically described in the Indenture. 11. Trustee Dealings with the Company and the Guarantor. The Trustee or any of its Affiliates, in their individual or any other capacities, may make or continue loans to or guaranteed by, accept deposits from and perform services for the Company or the Guarantor or their respective Affiliates and may otherwise deal with the Company or the Guarantor or their respective Affiliates as if it were not Trustee. 12. No Recourse Against Others. No director, officer, employee, shareholder or Affiliate, as such, of the Company or the Guarantor shall have any liability for any obligations of the Company or the Guarantor under the Convertible Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each holder by accepting a Convertible Note waives and releases all such liability. The waiver and release are part of the consideration for the Convertible Notes. 13. Authentication. This Convertible Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 14. Abbreviations. Customary abbreviations may be used in the name of a holder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by the entireties, JT TEN = joint tenants with right of survivorship and not as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act. 15. Conversion. Subject to and upon compliance with the provisions of the Indenture, the registered holder of this Convertible Note has the right at any time on or before the close of business on the last Trading Day prior to the Maturity Date (or in case this Convertible Note or any portion hereof is subject to a duly completed election for repurchase, on or before the close of business on the Fundamental Change Payment Date (unless the Company defaults in payment due upon repurchase or such holder elects to withdraw the submission of such election to repurchase ) to convert the principal amount hereof, or any portion of such principal amount which is $1,000 or an integral multiple thereof, into that number of fully paid and non-assessable shares of common stock of the Company ("Common Stock") obtained by dividing the principal amount of the Convertible Note or portion thereof to be converted by the conversion price of $34.09 per share, as adjusted from time to time as provided in the Indenture (the "Conversion Price"), upon surrender of this Convertible Note to the Company at the office or agency maintained for such purpose (and at such other offices or agencies designated for such purpose by the Company), accompanied by written notice of conversion duly executed (and if the shares of Common Stock to be issued on conversion are to be issued in any name other than that A-8 of the registered holder of this Convertible Note by instruments of transfer, in form satisfactory to the Company, duly executed by the registered holder or its duly authorized attorney) and, in case such surrender shall be made during the period from the close of business on the Regular Record Date immediately preceding any Interest Payment Date through the close of business on the last Trading Day immediately preceding such Interest Payment Date, also accompanied by payment, in funds acceptable to the Company, of an amount equal to the interest and Liquidated Damages, if any, otherwise payable on such Interest Payment Date on the principal amount of this Convertible Note then being converted. Subject to the aforesaid requirement for a payment in the event of conversion after the close of business on a Regular Record Date immediately preceding an Interest Payment Date, no adjustment shall be made on conversion for interest or Liquidated Damages accrued hereon or for dividends on Common Stock delivered on conversion. The right to convert this Convertible Note is subject to the provisions of the Indenture relating to conversion rights in the case of certain consolidations, mergers, share exchanges or sales or transfers of substantially all the Company's assets. So long as no Event of Default shall have occurred and be continuing, the Company, at its option, instead of delivering shares of Common Stock, may pay cash to the holder of this Convertible Note upon conversion as provided in Article 11 of the Indenture. The Company shall not issue fractional shares or scrip representing fractions of shares of Common Stock upon any such conversion, but shall pay cash in lieu of such fractional shares in the manner described in the Indenture. 16. Registration Agreement. The holder of this Convertible Note is entitled to the benefits of a Registration Agreement, dated as of February 1, 2002, by and among the Company, the Guarantor and the Initial Purchasers (the "Registration Agreement"). Pursuant to the Registration Agreement, the Company has agreed for the benefit of the holders of the Convertible Notes and the Common Stock issued and issuable upon conversion of the Convertible Notes, that (i) it will, at its cost, within 90 days after the Issue Date, file a shelf registration statement (the "Shelf Registration Statement") with the Securities and Exchange Commission (the "Commission") with respect to resales of the Convertible Notes and the Common Stock issuable upon conversion thereof, (ii) the Company will use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the Commission under the Securities Act within 150 days after the Issue Date and (iii) the Company will use its reasonable best efforts to keep such Shelf Registration Statement continuously effective under the Securities Act until the earliest of (a) the second anniversary of the Issue Date or, if later, the second anniversary of the last date on which any Convertible Notes are issued upon exercise of the Initial Purchasers' over-allotment option, (b) the date on which the Convertible Notes or the Common Stock issuable upon conversion thereof may be sold by persons who are not "affiliates" (as defined in Rule 144) of the Company pursuant to paragraph (k) of Rule 144 (or any successor provision) promulgated by the Commission under the Securities Act, (c) the date as of which all of the Convertible Notes or the Common Stock issuable upon conversion thereof have been transferred pursuant to Rule 144 under the Securities Act (or any similar provision then in force) and (d) the date as of which all the Convertible Notes or the Common Stock issuable upon conversion thereof have been sold pursuant to such Shelf Registration Statement. A-9 If the Shelf Registration Statement (i) is not filed with the Commission on or prior to 90 days, or has not been declared effective by the Commission within 150 days, after the Issue Date or (ii) is filed and declared effective but shall thereafter cease to be effective (without being succeeded immediately by a replacement shelf registration statement filed and declared effective) or cease to be usable (including, without limitation, as a result of a Suspension Period as defined below) for the offer and sale of Transfer Restricted Securities (as defined below) for a period of time (including any Suspension Period) which shall exceed 60 days in the aggregate in any 12-month period during the period beginning on the Issue Date and ending on the second anniversary of the Issue Date or, if later, the second anniversary of the last date on which any Convertible Notes are issued upon exercise of the Initial Purchasers' over-allotment option (each such event referred to in clauses (i) and (ii) being referred to herein as a "Registration Default"), the Company will pay liquidated damages ("Liquidated Damages") to each holder of Transfer Restricted Securities which has complied with its obligations under the Registration Agreement. The amount of Liquidated Damages payable during any period in which a Registration Default shall have occurred and be continuing is that amount which is equal to one-quarter of one percent (25 basis points) per annum per $1,000 principal amount of Convertible Notes and $2.50 per annum per 29.334 shares of Common Stock (subject to adjustment from time to time in the event of a stock split, stock recombination, stock dividend and the like) constituting Transfer Restricted Securities for the first 90 days during which a Registration Default has occurred and is continuing and one-half of one percent (50 basis points) per annum per $1,000 principal amount of Convertible Notes and $5.00 per annum per 29.334 shares of Common Stock (subject to adjustment as set forth above) constituting Transfer Restricted Securities for any additional days during which such Registration Default has occurred and is continuing. The Company will pay all accrued Liquidated Damages by wire transfer of immediately available funds or by federal funds check on each Damages Payment Date (as defined in the Registration Agreement), and Liquidated Damages will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Following the cure of a Registration Default, Liquidated Damages will cease to accrue with respect to such Registration Default. "Transfer Restricted Securities" means each Convertible Note and each share of Common Stock issued on conversion thereof until the date on which such Convertible Note or share, as the case may be, (i) has been transferred pursuant to the Shelf Registration Statement or another registration statement covering such Convertible Note or share which has been filed with the Commission pursuant to the Securities Act, in either case after such registration statement has become and while such registration statement is effective under the Securities Act, (ii) has been transferred pursuant to Rule 144 under the Securities Act (or any similar provision then in force), or (iii) may be sold or transferred pursuant to Rule 144(k) under the Securities Act (or any similar provision then in force). Pursuant to the Registration Agreement, the Company may suspend the use of the prospectus which is a part of the Shelf Registration Statement for a period not to exceed 30 days in any three-month period or for three periods not to exceed an aggregate of 60 days in any twelve-month period under certain circumstances (each, a "Suspension Period"); provided that the existence of a Suspension Period will not prevent the occurrence of a Registration Default or otherwise limit the obligation of the Company to pay Liquidated Damages. A-10 The above description of certain provisions of the Registration Agreement is qualified by reference to, and is subject in its entirety to, the more complete description thereof contained in the Registration Agreement. The Company will furnish to any holder upon written request and without charge a copy of the Indenture and the Registration Agreement. Requests may be made to: GATX Corporation, 500 West Monroe Street, Chicago, Illinois 60661-3676, Attention: Treasurer. A-11 FORM OF CONVERSION NOTICE To: GATX CORPORATION The undersigned beneficial owner of the Convertible Note hereby irrevocably exercises the option to convert this Convertible Note, or portion hereof (which is $1,000 or an integral multiple thereof) below designated, into shares of Common Stock of GATX Corporation in accordance with the terms of the Indenture referred to in this Convertible Note, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for fractional shares and Convertible Notes representing any unconverted principal amount hereof, be issued and delivered to the beneficial owner hereof unless a different name has been indicated below. If shares or any portion of this Convertible Note not converted are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest, Liquidated Damages and taxes accompanies this Convertible Note. Dated: Fill in for registration of shares if to be delivered, ---------------------------------------------- and Convertible Notes if to be issued, other than to and in the name of the beneficial owner ---------------------------------------------- (Please Print): ---------------------------------------------- Signature(s) Principal amount to be converted (if less than - ------------------------------------------------------ all); (Name) ---------------------------------------------- $___,000 - ------------------------------------------------------ (Street Address) ---------------------------------------------- Social Security or other Taxpayer Identification - ------------------------------------------------------ Number (City, State and Zip Code)
Signature Guarantee: - -------------------------------------------- Signatures must be guaranteed by an eligible Guarantor Institution (banks, brokers, dealers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or Convertible Notes are to be delivered, other than to and in the name of the registered holder(s). A-12 ASSIGNMENT FORM To assign this Convertible Note, fill in the form below: (I) or (we) assign and transfer this Convertible Note to - -------------------------------------------------------------------------------- (Insert assignee's social security or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint ____________________________________ agent to transfer this Convertible Note on the books of the Company. The agent may substitute another to act for him. Your Signature: _______________________________________________ (Sign exactly as your name appears on the other side of this Convertible Note) Date: ________________________________ Medallion Signature Guarantee: _____________________________________ [FOR INCLUSION ONLY IF THIS CONVERTIBLE NOTE BEARS A RESTRICTED SECURITIES LEGEND] In connection with any transfer of any of the Convertible Notes evidenced by this certificate which are "restricted securities" (as defined in Rule 144 (or any successor thereto) under the Securities Act), the undersigned confirms that such Convertible Notes are being transferred: CHECK ONE BOX BELOW (1) [_] to the Company; or (2) [_] pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or (3) [_] pursuant to and in compliance with Regulation S under the Securities Act of 1933; or (4) [_] pursuant to an exemption from registration under the Securities Act of 1933 provided by Rule 144 thereunder. A-13 Unless one of the boxes is checked, the Registrar will refuse to register any of the Convertible Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (3) or (4) is checked, the Trustee may require, prior to registering any such transfer of the Convertible Notes, such certifications and other information, and if box (4) is checked such legal opinions, as the Company has reasonably requested in writing, by delivery to the Trustee of a standing letter of instruction, to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933; provided that this paragraph shall not be applicable to any Convertible Notes which are not "restricted securities" (as defined in Rule 144 (or any successor thereto) under the Securities Act). Your Signature: ----------------------------------------------------- (Sign exactly as your name appears on the other side of this Convertible Note) Date: ------------------------ Medallion Signature Guarantee: ------------------------------ A-14 OPTION OF HOLDER TO ELECT REPURCHASE If you wish to have this Convertible Note repurchased by the Company pursuant to Section 4.6 of the Indenture, check the Box: [ ] If you wish to have a portion of this Convertible Note purchased by the Company pursuant to Section 4.6 of the Indenture, state the amount (in multiples of $1,000): $_____. Date: Your Signature: ------------ -------------------------------------------- (Sign exactly as your name appears on the other side of this Convertible Note) Medallion Signature Guarantee: -------------------------------------------------- A-15 EXHIBIT B FORM OF RESTRICTED COMMON STOCK LEGEND "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT." B-1 EXHIBIT C FORM OF TRANSFER CERTIFICATE FOR TRANSFER OF RESTRICTED COMMON STOCK (Transfers pursuant to Section 11.11(c) of the Indenture) [NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT] Re: GATX Corporation 7.5% Convertible Notes due 2007 (the "Convertible Notes") Reference is hereby made to the Indenture dated as of February 1, 2002 (the "Indenture") by and among GATX Corporation, GATX Financial Corporation and JPMorgan Chase Bank, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture. This letter relates to shares of Common Stock represented by the accompanying certificate(s) that were issued upon conversion of Convertible Notes and which are held in the name of [name of transferor] (the "Transferor") to effect the transfer of such Common Stock. In connection with the transfer of such shares of Common Stock, the undersigned confirms that such shares of Common Stock are being transferred: CHECK ONE BOX BELOW (1) [ ] to the Company; or (2) [ ] pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or (3) [ ] pursuant to and in compliance with Regulation S under the Securities Act of 1933; or (4) [ ] pursuant to an exemption from registration under the Securities Act of 1933 provided by Rule 144 thereunder. C-1 Unless one of the boxes is checked, the transfer agent will refuse to register any of the Common Stock evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (3) or (4) is checked, the transfer agent may require, prior to registering any such transfer of the Common Stock such certifications and other information, and if box (4) is checked such legal opinions, as the Company has reasonably requested in writing, by delivery to the transfer agent of a standing letter of instruction, to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. [Name of Transferor], By -------------------------------- Name: ----------------------------- Title: ---------------------------- Dated: C-2 EX-4.5 4 dex45.txt REGISTRATION RIGHTS AGREEMENT Exhibit 4.5 GATX CORPORATION 7.5% Convertible Senior Notes due 2007 Fully and Unconditionally Guaranteed by GATX Financial Corporation REGISTRATION RIGHTS AGREEMENT New York, New York February 1, 2002 Salomon Smith Barney Inc. J.P. Morgan Securities Inc. As Representatives of the Initial Purchasers Named in Schedule I to the Purchase Agreement c/o Salomon Smith Barney Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: GATX Corporation, a New York corporation (the "Company"), proposes to issue and sell (such issuance and sale, the "Initial Placement") to the several parties named in Schedule I to the Purchase Agreement (the "Initial Purchasers") for whom you (the "Representatives") are acting as representatives, upon the terms set forth in a purchase agreement dated January 28, 2002 (the "Purchase Agreement"), $150,000,000 aggregate principal amount (plus up to an additional $25,000,000 aggregate principal amount to cover over-allotments, if any) of its 7.5% Convertible Senior Notes due 2007 (the "Notes"). GATX Financial Corporation, a Delaware corporation (the "Guarantor"), will fully and unconditionally guarantee the Notes (the "Guarantee" and, together with the Notes, the "Securities"). The Securities will be convertible into shares of Common Stock (as defined herein), at the conversion price set forth in the Offering Memorandum (as defined herein), as the same may be adjusted from time to time pursuant to the Indenture (as defined herein). As an inducement to you to enter into the Purchase Agreement and in satisfaction of a condition to your obligations thereunder, the Issuers (as defined herein) agree with you, (i) for your benefit and (ii) for the benefit of the holders from time to time of the Securities and the Common Stock issuable upon conversion of the Notes (including you), as follows: 1. Definitions. Capitalized terms used herein without definition shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following capitalized terms shall have the following meanings: "Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. "Affiliate" of any specified person means any other person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities or by agreement or otherwise. "Broker-Dealer" means any broker or dealer registered as such under the Exchange Act. "Business Day" has the meaning set forth in the Indenture. "Closing Date" means February 1, 2002. "Common Stock" means the common stock, par value $.625 per share, of the Company, as it exists on the date of this Agreement and any other shares of capital stock or other securities of the Company into which such Common Stock may be reclassified or changed, together with any and all other securities which may from time to time be issuable upon conversion of Notes. "Damages Payment Date" means, with respect to the Securities or the Common Stock issuable upon conversion of the Notes, as applicable, each Interest Payment Date; and in the event that any Security, or portion thereof, is surrendered for purchase by the Company and not withdrawn pursuant to a Fundamental Change Offer (as defined in the Indenture), the relevant Fundamental Change Payment Date (as defined in the Indenture), as the case may be, shall also be a Damages Payment Date with respect to such Security, or portion thereof, unless the Indenture provides that accrued and unpaid interest on the Security (or portion thereof) to be repurchased, as the case may be, is to be paid to the person who was the Record Holder thereof on a record date prior to such Fundamental Change Payment Date, as the case may be, in which case the relevant Damages Payment Date shall be the date on which interest is payable to such Record Holder. "Default Rate" means the rate of interest payable with respect to overdue amounts on the Securities pursuant to Section 4.1 of the Indenture. "DTC" means The Depository Trust Company. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. "Final Maturity Date" means February 1, 2007. "Holder" means a person who is a holder or beneficial owner (including the Initial Purchasers) of any Securities or shares of Common Stock issued upon conversion of Notes; -2- provided that, unless otherwise expressly stated herein, only registered holders of Securities or Common Stock issued on conversion of the Notes shall be counted for purposes of calculating any proportion of holders entitled to take any action or give notice pursuant to this Agreement. "Indenture" means the Indenture relating to the Securities dated as of February 1, 2002, among the Company, the Guarantor and JPMorgan Chase Bank, as trustee, as the same may be amended from time to time in accordance with the terms thereof. "Initial Placement" has the meaning set forth in the preamble hereto. "Initial Purchasers" has the meaning set forth in the preamble hereto. "Interest Payment Date" shall mean February 1 and August 1. "Issuers" means, collectively, the Company and the Guarantor. "Liquidated Damages" has the meaning set forth in Section 2(e) hereof. "Losses" has the meaning set forth in Section 5(d) hereof. "Majority Holders" means the Holders of a majority of the then outstanding aggregate principal amount of Securities registered under a Shelf Registration Statement; provided that Holders of Common Stock issued upon conversion of Notes shall be deemed to be Holders of the aggregate principal amount of Securities from which such Common Stock was converted; and provided, further, that Securities or Common Stock which have been sold or otherwise transferred pursuant to the Shelf Registration Statement shall not be included in the calculation of Majority Holders. "Majority Underwriting Holders" means, with respect to any Underwritten Offering, the Holders of a majority of the then outstanding aggregate principal amount of Securities registered under any Shelf Registration Statement whose Securities are or are to be included in such Underwritten Offering; provided that Holders of Common Stock issued upon conversion of the Notes shall be deemed to be Holders of the aggregate principal amount of Securities from which such Common Stock was converted. "Managing Underwriters" means the Underwriter or Underwriters that shall administer an Underwritten Offering. "NASD" has the meaning set forth in Section 3(i) hereof. "Notice and Questionnaire" means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Exhibit A hereto. "Notice Holder" shall mean, on any date, any Holder of Transfer Restricted Securities that has delivered a completed and signed Notice and Questionnaire to the Company on or prior to such date. -3- "Offering Memorandum" means the Final Memorandum as defined in the Purchase Agreement. "Person" has the meaning set forth in the Indenture. "Prospectus" means the prospectus included in any Shelf Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or Common Stock issuable upon conversion of the Notes covered by such Shelf Registration Statement, and all amendments and supplements to such prospectus, including all documents incorporated or deemed to be incorporated by reference in such prospectus. "Purchase Agreement" has the meaning set forth in the preamble hereto. "Record Holder" means (i) with respect to any Damages Payment Date which occurs on an Interest Payment Date, each person who is registered on the books of the registrar as the holder of Securities at the close of business on the record date with respect to such Interest Payment Date and (ii) with respect to any Damages Payment Date relating to the Common Stock issued upon conversion of the Notes, each person who is a holder of record of such Common Stock fifteen days prior to the Damages Payment Date. "Registration Default" has the meaning set forth in Section 2(e) hereof. "Representative" has the meaning set forth in the preamble hereto. "Rule 144" means Rule 144 (or any successor provision) under the Act. "SEC" means the Securities and Exchange Commission. "Securities" has the meaning set forth in the preamble hereto. "Shelf Registration" means a registration effected pursuant to Section 2 hereof. "Shelf Registration Period" has the meaning set forth in Section 2(c) hereof. "Shelf Registration Statement" means a "shelf" registration statement of the Company filed pursuant to the provisions of Section 2 hereof which covers some or all of the Securities and the Common Stock issuable upon conversion of the Notes, as applicable, on Form S-3 or on another appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated or deemed to be incorporated by reference therein. "Suspension Period" has the meaning set forth in Section 2(d) hereof. -4- "Transfer Restricted Securities" means each Security and each share of Common Stock issuable or issued upon conversion of the Notes until the date on which such Security or share of Common Stock, as the case may be, (i) has been transferred pursuant to the Shelf Registration Statement or another registration statement covering such Security or share of Common Stock which has been filed with the SEC pursuant to the Act, in either case after such registration statement has become effective and while such registration statement is effective under the Act, (ii) has been transferred pursuant to Rule 144 under the Act (or any similar provision then in force) or (iii) may be sold or transferred pursuant to Rule 144(k) under the Act (or any successor provision then in force). "Trustee" means the trustee with respect to the Securities under the Indenture. "Underwriter" means any underwriter of the Securities or Common Stock issuable upon conversion of the Notes in connection with an offering thereof under a Shelf Registration Statement. "Underwritten Offering" means an offering in which the Securities or Common Stock issued upon conversion of the Notes are sold to an Underwriter or with the assistance of an Underwriter for reoffering to the public. All references in this Agreement to financial statements and schedules and other information which is "contained", "included", or "stated" in the Shelf Registration Statement, any preliminary Prospectus or Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated or deemed to be incorporated by reference in such Shelf Registration Statement, preliminary Prospectus or Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Shelf Registration Statement, any preliminary Prospectus or Prospectus shall be deemed to mean and include any document filed with the SEC under the Exchange Act, after the date of such Shelf Registration Statement, preliminary Prospectus or Prospectus, as the case may be, which is incorporated or deemed to be incorporated by reference therein. 2. Shelf Registration Statement. ---------------------------- (a) The Issuers shall prepare and file with the SEC within 90 days following the Closing Date a Shelf Registration Statement with respect to resales of the Transfer Restricted Securities by the Holders from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement (subject to Section 3(u)) and thereafter shall use their reasonable best efforts to cause such Shelf Registration Statement to be declared effective under the Act within 150 days after the Closing Date; provided that if any Securities are issued upon exercise of the over-allotment option granted to the Initial Purchasers in the Purchase Agreement and the date on which such Securities are issued occurs after the Closing Date, the Issuers will take such steps, prior to the effective date of the Shelf Registration Statement, to ensure that such Securities and Common Stock issuable upon conversion of the Notes are included in the Shelf Registration Statement on the same terms as the Securities issued on the Closing Date. The Issuers shall supplement or amend the Shelf Registration -5- Statement if required by the rules, regulations or instructions applicable to the registration form used by the Issuers for the Shelf Registration Statement, or by the Act, the Exchange Act or the SEC. (b) (i) Not less than 30 calendar days prior to the effectiveness of the Shelf Registration Statement, the Issuers shall mail the Notice and Questionnaire to the Holders of Transfer Restricted Securities. The Issuers shall take action to name each Holder that is a Notice Holder as of the date that is 10 calendar days prior to the effectiveness of the Shelf Registration Statement so that such Holder is named as a selling security holder in the Shelf Registration Statement at the time of its effectiveness and is permitted to deliver the Prospectus forming a part thereof as of such time to purchasers of such Holder's Transfer Restricted Securities in accordance with applicable law. The Issuers shall be under no obligation to name any Holder that is not a Notice Holder as a selling security holder in the Shelf Registration Statement. (ii) After the Shelf Registration Statement has become effective, the Issuers shall, upon the request of any Holder of Transfer Restricted Securities, promptly send a Notice and Questionnaire to such Holder. From and after the date on which the Shelf Registration Statement has become effective, the Issuers shall (i) as promptly as is practicable after the date a completed and signed Notice and Questionnaire and such other information as the Issuers may reasonably request is delivered to the Issuers, and in any event within five Business Days after such date, prepare and file with the SEC (x) a supplement to the Prospectus or, if required by applicable law, a post-effective amendment to the Shelf Registration Statement and (y) any other document required by applicable law, so that the Holder delivering such Notice and Questionnaire is named as a selling security holder in the Shelf Registration Statement and is permitted to deliver the Prospectus to purchasers of such Holder's Transfer Restricted Securities in accordance with applicable law, and (ii) use their reasonable best efforts to cause any such post-effective amendment to become effective under the Act as promptly as is practicable; provided, however, that if a Notice and Questionnaire is delivered to the Issuers during a Suspension Period, the Issuers shall not be obligated to take the actions set forth in clauses (i) and (ii) until the termination of such Suspension Period. (c) The Issuers shall use their reasonable best efforts to keep the Shelf Registration Statement continuously effective under the Act in order to permit the Prospectus forming a part thereof to be usable, subject to Section 2(d), by all Notice Holders until the earliest of (i) the second anniversary of the Closing Date, (ii) the date on which all the Securities or Common Stock issued or issuable upon conversion of the Notes may be sold by non-affiliates ("affiliates" for such purpose having the meaning set forth in Rule 144) of the Issuers pursuant to paragraph (k) of Rule 144 (or any successor provision) promulgated by the SEC under the Act, (iii) the date as of which all the Securities or Common Stock issued or issuable upon conversion of the Notes have been transferred pursuant to Rule 144 under the Act (or any similar provision then in force) and (iv) such date as of which all the Securities or the Common Stock issued or issuable -6- upon conversion of the Notes have been sold pursuant to the Shelf Registration Statement (in any such case, such period being called the "Shelf Registration Period"). The Issuers will, (x) subject to Section 2(d), prepare and file with the SEC such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary to keep the Shelf Registration Statement continuously effective for the Shelf Registration Period, (y) subject to Section 2(d), cause the related Prospectus to be supplemented by any required supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Act and (z) comply in all material respects with the provisions of the Act with respect to the disposition of all securities covered by the Shelf Registration Statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented. (d) The Issuers may suspend the use of the Prospectus for a period not to exceed 30 days in any three-month period or for three periods not to exceed an aggregate of 60 days in any 12-month period (the "Suspension Period") for valid business reasons, to be determined by the Issuers in their sole reasonable judgment (not including avoidance of the Issuers' obligations hereunder), including, without limitation, the acquisition or divestiture of assets, public filings with the SEC, pending corporate developments and similar events; provided that the Issuers promptly thereafter comply with the requirements of Section 3(j) hereof, if applicable; provided, further, that the existence of a Suspension Period will not prevent the occurrence of a Registration Default or otherwise limit the obligation of the Issuers to pay Liquidated Damages. (e) If (i) the Shelf Registration Statement is not filed with the SEC on or prior to 90 days after the Closing Date, (ii) the Shelf Registration Statement has not been declared effective by the SEC within 150 days after the Closing Date, or (iii) the Shelf Registration Statement is filed and declared effective but shall thereafter cease to be effective (without being succeeded immediately by a replacement shelf registration statement filed and declared effective) or usable for the offer and sale of Transfer Restricted Securities for a period of time (including any Suspension Period) which shall exceed 60 days in the aggregate in any 12 month period during the period beginning on the Closing Date and ending on the second anniversary of the Closing Date or, if later, the second anniversary of the last date on which any Securities are issued upon exercise of the Initial Purchasers' over-allotment option (each such event referred to in clauses (i) through (iii), a "Registration Default"), the Issuers will pay liquidated damages ("Liquidated Damages") to each Holder of Transfer Restricted Securities who has complied with such Holder's obligations under this Agreement. The amount of Liquidated Damages payable during any period in which a Registration Default has occurred and is continuing is the amount which is equal to one quarter of one percent (25 basis points) per annum per $1,000 principal amount of Securities or $2.50 per annum per 29.334 shares of Common Stock (subject to adjustment in the event of a stock split, stock recombination, stock dividend and the like) constituting Transfer Restricted Securities for the first 90 days during which a Registration Default has occurred and is continuing and one-half of one percent (50 basis points) per annum per $1,000 principal amount of Securities or $5.00 per annum per 29.334 shares of Common Stock (subject to adjustment -7- as set forth above) constituting Transfer Restricted Securities for any additional days during which a Registration Default has occurred and is continuing (in each case subject to further adjustment from time to time in the event of a stock split, stock recombination, stock dividend and the like), it being understood that all calculations pursuant to this and the preceding sentence shall be carried out to five decimals. Following the cure of all Registration Defaults, Liquidated Damages will cease to accrue with respect to such Registration Default. Liquidated Damages shall cease to accrue in respect of any Transfer Restricted Security when it shall cease to be such. All accrued Liquidated Damages shall be paid by wire transfer of immediately available funds or by federal funds check by the Issuers on each Damages Payment Date and Liquidated Damages will be calculated on the basis of a 360-day year consisting of twelve 30-day months and the actual number of days elapsed in any partial month. In the event that any Liquidated Damages are not paid when due, then to the extent permitted by law, such overdue Liquidated Damages, if any, shall bear interest until paid at the Default Rate, compounded semi-annually. The parties hereto agree that the Liquidated Damages provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders by reason of a Registration Default. (f) All of the Issuers' obligations (including, without limitation, the obligation to pay Liquidated Damages) set forth in the preceding paragraph which are outstanding or exist with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full. (g) Immediately upon the occurrence or the termination of a Registration Default, the Issuers shall give the Trustee, in the case of notice with respect to the Securities, and the transfer and paying agent for the Common Stock, in the case of notice with respect to Common Stock issued or issuable upon conversion of the Notes, notice of such commencement or termination, of the obligation to pay Liquidated Damages with regard to the Securities and Common Stock and the amount thereof and of the event giving rise to such commencement or termination (such notice to be contained in an Officers' Certificate (as such term is defined in the Indenture)), and prior to receipt of such Officers' Certificate the Trustee and such transfer and paying agent shall be entitled to assume that no such commencement or termination has occurred, as the case may be. (h) All Securities which are purchased or otherwise acquired by the Issuers or any of their subsidiaries or affiliates (as defined in Rule 144 (or any successor provision) under the Act) prior to the Final Maturity Date shall be delivered to the Trustee for cancellation and the Issuers may not hold or resell such Securities or issue any new Securities to replace any such Securities or any Securities that any Holder has converted pursuant to the Indenture. All shares of Common Stock issued upon conversion of the Notes which are repurchased or otherwise acquired by the Issuers or any of their subsidiaries or affiliates (as defined in Rule 144 (or any successor provision) under the Act) at any time while such shares are "restricted securities" within the meaning of Rule 144 shall not be resold or otherwise transferred except pursuant to a registration statement which has been declared effective under the Act. -8- 3. Registration Procedures. In connection with any Shelf Registration Statement, the following provisions shall apply: (a) The Issuers shall: (i) furnish to the Representatives, prior to the filing thereof with the SEC, a copy of any Shelf Registration Statement, and each amendment thereof, and a copy of any Prospectus, and each amendment or supplement thereto (excluding amendments caused by the filing of a report under the Exchange Act), and shall use their reasonable best efforts to reflect in each such document, when so filed with the SEC, such comments as the Representatives reasonably and promptly propose; and (ii) include information regarding the Notice Holders and the methods of distribution they have elected for their Transfer Restricted Securities provided to the Issuers in Notice and Questionnaires as necessary to permit such distribution by the methods specified therein. (b) Subject to Section 2(d), the Issuers shall ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming a part thereof and any amendment or supplement thereto comply in all material respects with the Act and the rules and regulations thereunder, (ii) any Shelf 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) any Prospectus forming a part of any Shelf Registration Statement, and any amendment or supplement to such Prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the Issuers make no representation with respect to information with respect to any Underwriter or any Holder required to be included in any Shelf Registration Statement or Prospectus pursuant to the Act or the rules and regulations thereunder and which information is included therein in reliance upon and in conformity with information furnished to the Issuers in writing by such Underwriter or Holder. (c) The Issuers, as promptly as reasonably practicable, shall advise the Representatives and each Notice Holder and, if requested by you or any such Holder, confirm such advice in writing: (i) when a Shelf Registration Statement and any amendment thereto has been filed with the SEC and when the Shelf Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the SEC following effectiveness of the Shelf Registration Statement for amendments or supplements to the Shelf Registration Statement or the Prospectus or for additional information (other than any such request relating to a review of the Issuers' Exchange Act filings); -9- (iii) of the determination by the Issuers that a post-effective amendment to the Shelf Registration Statement would be appropriate; (iv) of the commencement or termination of (but not the nature of or details concerning) any Suspension Period; (v) of the issuance by the SEC of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for that purpose; (vi) of the receipt by the Issuers of any notification with respect to the suspension of the qualification of the Transfer Restricted Securities included in any Shelf Registration Statement for sale in any jurisdiction or the initiation or threat of any proceeding for such purpose; (vii) of the happening of (but not the nature of or details concerning) any event that requires the making of any changes in the Shelf Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and the Shelf Registration Statement or the Prospectus, as the case may be, does not include 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 (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading; and (viii) of the Issuers' suspension of the use of the Prospectus as a result of any of the events or circumstances described in paragraphs (ii) through (vii) above, and of the termination of any such suspension. (d) The Issuers shall use their reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of any Shelf Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Transfer Restricted Securities for offer or sale in any jurisdiction at the earliest possible time. (e) The Issuers shall promptly furnish to each Notice Holder, without charge, at least one copy of any Shelf Registration Statement and any post-effective amendment thereto, including all exhibits (including those incorporated by reference), financial statements and schedules. (f) The Issuers shall, during the Shelf Registration Period, promptly deliver to each Initial Purchaser, each Notice Holder and any sales or placement agent or underwriters acting on their behalf, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in any Shelf Registration Statement (excluding documents incorporated by reference), and any amendment or supplement thereto, as such person may reasonably request; and, except as provided in Sections 2(d) and 3(s) hereof, the Issuers consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders in connection with the offering and sale -10- of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto. (g) Prior to any offering of Transfer Restricted Securities pursuant to any Shelf Registration Statement, the Issuers shall register or qualify or cooperate with the Notice Holders and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Transfer Restricted Securities for offer and sale, under the securities or blue sky laws of such jurisdictions within the United States as any such Notice Holders reasonably request and shall maintain such qualification in effect so long as required and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Transfer Restricted Securities covered by such Shelf Registration Statement; provided, however, that the Issuers will not be required to (A) qualify generally to do business as a foreign corporation or as a dealer in securities in any jurisdiction where it is not then so qualified or to (B) take any action which would subject it to service of process or taxation in any such jurisdiction where it is not then so subject. (h) The Issuers shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities sold pursuant to any Shelf Registration Statement free of any restrictive legends and in such denominations permitted by the Indenture and registered in such names as Holders may request at least two Business Days prior to settlement of sales of Transfer Restricted Securities pursuant to such Shelf Registration Statement. (i) Subject to the exceptions contained in (A) and (B) of Section 3(g) hereof, the Issuers shall use their reasonable best efforts to cause the Transfer Restricted Securities covered by the applicable Shelf Registration Statement to be registered with or approved by such other federal, state and local governmental agencies or authorities, and self-regulatory organizations in the United States as may be necessary to enable the Holders to consummate the disposition of such Transfer Restricted Securities as contemplated by the Shelf Registration Statement; without limitation to the foregoing, the Issuers shall make all filings and provide all such information as may be required by the National Association of Securities Dealers, Inc. (the "NASD") in connection with the offering under the Shelf Registration Statement of the Transfer Restricted Securities (including, without limitation, such as may be required by NASD Rule 2710 or 2720), and shall cooperate with each Holder in connection with any filings required to be made with the NASD by such Holder in that regard. (j) Upon the occurrence of any event described in Section 3(c)(vii) hereof, the Issuers shall as soon as reasonably practicable prepare and file with the SEC a post-effective amendment to any Shelf Registration Statement or an amendment or supplement to the related Prospectus or any document incorporated therein by reference or file a document which is incorporated or deemed to be incorporated by reference in such Shelf Registration Statement or Prospectus, as the case may be, so that, as thereafter delivered to purchasers of the Transfer Restricted Securities included therein, the Shelf Registration Statement and the Prospectus, in each case as then amended or supplemented, will not include an untrue statement of a material fact or omit to state any -11- material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus in light of the circumstances under which they were made) not misleading and, in the case of a post-effective amendment, use its reasonable best efforts to cause it to become effective as promptly as practicable; provided that the Issuers' obligations under this paragraph (j) shall be suspended if the Issuers have suspended the use of the Prospectus in accordance with Section 2(d) hereof and given notice of such suspension to Notice Holders, it being understood that the Issuers' obligations under this Section 3(j) shall be automatically reinstated at the end of such Suspension Period. (k) The Issuers shall use their reasonable best efforts to provide, on or prior to the first Business Day following the effective date of any Shelf Registration Statement hereunder (i) a CUSIP number for the Transfer Restricted Securities registered under such Shelf Registration Statement and (ii) global certificates for such Transfer Restricted Securities to the Trustee, in a form eligible for deposit with DTC. (l) The Issuers shall use their best efforts to comply with all applicable rules and regulations of the SEC and shall make generally available to its security holders as soon as practicable but in any event not later than 50 days after the end of a 12-month period (or 105 days, if such period is a fiscal year) after (i) the effective date of the applicable Shelf Registration Statement, (ii) the effective date of each post-effective amendment to any Shelf Registration Statement, and (iii) the date of each filing by the Issuers with the SEC of an Annual Report on Form 10-K that is incorporated by reference or deemed to be incorporated by reference in the Shelf Registration Statement, an earnings statement satisfying the provisions of Section 11(a) of the Act and Rule 158 promulgated by the SEC thereunder. (m) The Issuers shall use their reasonable best efforts to cause the Indenture to be qualified under the TIA (as defined in the Indenture) in a timely manner. (n) The Issuers shall cause all Common Stock issued or issuable upon conversion of the Notes to be listed on each securities exchange or quotation system on which the Common Stock is then listed no later than the date the applicable Shelf Registration Statement is declared effective and, in connection therewith, to make such filings as may be required under the Exchange Act and to have such filings declared effective as and when required thereunder. (o) The Issuers may require each Holder of Transfer Restricted Securities to be sold pursuant to any Shelf Registration Statement to furnish to the Issuers such information regarding the Holder and the distribution of such Transfer Restricted Securities sought by the Notice and Questionnaire and such additional information as may, from time to time, be required by the Act and the rules and regulations promulgated thereunder, and the obligations of the Issuers to any Holder hereunder shall be expressly conditioned on the compliance of such Holder with such request. (p)The Issuers shall, if reasonably requested, use their reasonable best efforts to promptly incorporate in a Prospectus supplement or post-effective amendment to a -12- Shelf Registration Statement (i) such information as the Majority Holders provide or, if Transfer Restricted Securities are being sold in an Underwritten Offering, as the Managing Underwriters or the Majority Underwriting Holders reasonably agree should be included therein and provide to the Issuers in writing for inclusion in the Shelf Registration Statement or Prospectus, and (ii) such information as a Holder may provide from time to time to the Issuers in writing for inclusion in a Prospectus or any Shelf Registration Statement concerning such Holder and the distribution of such Holder's Transfer Restricted Securities and, in either case, shall make all required filings of such Prospectus supplement or post-effective amendment promptly after being notified in writing of the matters to be incorporated in such Prospectus supplement or post-effective amendment, provided that the Issuers shall not be required to take any action under this Section 3(p) that is not, in the reasonable opinion of counsel for the Issuers, in compliance with applicable law. (q) The Issuers shall enter into such customary agreements (including underwriting agreements) and take all other appropriate actions as may be requested in order to expedite or facilitate the registration or the disposition of the Transfer Restricted Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification and contribution provisions and procedures no less favorable than those set forth in Section 5 (or such other reasonable and customary provisions and procedures acceptable to the Majority Underwriting Holders and the Managing Underwriters, if any, with respect to all parties to be indemnified pursuant to Section 5). The plan of distribution in the Shelf Registration Statement and the Prospectus included therein shall permit resales of Transfer Restricted Securities to be made by selling security holders through underwriters, brokers and dealers, and shall also include such other information as the Representative may reasonably request. (r) The Issuers shall if reasonably requested in writing by Majority Holders, by Majority Underwriting Holders or by the Managing Underwriter: (i) make reasonably available for inspection during normal business hours by any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and any attorney, accountant or other agent retained by any such Underwriter all relevant financial and other records, pertinent corporate documents and properties of the Issuers and their subsidiaries as is customary for due diligence examinations in connection with public offerings; (ii) cause the Issuers' officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by any such Underwriter, attorney, accountant or agent in connection with any such Shelf Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is designated in writing by the Issuers, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such Underwriter, attorney, accountant or agent, unless disclosure thereof is made in connection with a court, administrative or regulatory proceeding or required by law, or such information -13- has become available to the public generally through the Issuers or through a third party without an accompanying obligation of confidentiality; (iii) deliver a letter, addressed to the selling Holders and the Underwriters, if any, in which the Company shall make such representations and warranties in form, substance and scope as are customarily made by issuers to Underwriters; (iv) obtain opinions of counsel to the Issuers and updates thereof (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Managing Underwriters, if any) addressed to each selling Holder and the Underwriters, if any, covering such matters as are customarily covered in opinions requested in public offerings; (v) obtain "cold comfort" letters and updates thereof from the current and former independent certified public accountants of the Company and/or the Guarantor (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or the Guarantor or of any business acquired by the Company or the Guarantor for which financial statements and financial data are, or are required to be, included in the Shelf Registration Statement), addressed to each selling Holder (provided such Holder furnishes the accountants, prior to the date such "cold comfort" letter is required to be delivered, with such representations as the accountants customarily require in similar situations) and the Underwriters, if any, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings; and (vi) deliver such documents and certificates as may be reasonably requested by the Majority Holders or, in the case of an Underwritten Offering, the Majority Underwriting Holders, and the Managing Underwriters, if any, including those to evidence compliance with Section 3(j) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company or the Guarantor. The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this Section 3(r) shall be performed at (A) the effectiveness of such Shelf Registration Statement and each post-effective amendment thereto and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder. (s) Each Notice Holder agrees that, upon receipt of notice of the happening of an event described in Sections 3(c)(ii) through and including 3(c)(vii), each Holder shall forthwith discontinue (and shall cause its agents and representatives to discontinue) disposition of Transfer Restricted Securities and will not resume disposition of Transfer Restricted Securities until such Holder has received copies of an amended or supplemented Prospectus contemplated by Section 3(j) hereof, or until such Holder is advised in writing by the Company or the Guarantor that the use of the Prospectus may be resumed or that the relevant Suspension Period has been terminated, as the case may -14- be, provided that, the foregoing shall not prevent the sale, transfer or other disposition of Transfer Restricted Securities by a Notice Holder in a transaction which is exempt from, or not subject to, the registration requirements of the Act, so long as such Notice Holder does not and is not required to deliver the applicable Prospectus or Shelf Registration Statement in connection with such sale, transfer or other disposition, as the case may be; and provided, further, that the provisions of this Section 3(s) shall not prevent the occurrence of a Registration Default or otherwise limit the obligation of the Issuers to pay Liquidated Damages. (t) The Issuers shall in connection with an Underwritten Offering use their reasonable best efforts (i) if the Securities have been rated prior to the initial sale of such Securities, to confirm that such ratings will apply to the Securities covered by the Shelf Registration Statement; or (ii) if the Securities were not previously rated, to cause the Securities covered by the Shelf Registration Statement to be rated with at least one nationally recognized statistical rating agency, if so requested by the Majority Holders or by any Managing Underwriters. (u) In the event that any Broker-Dealer shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the NASD Rules) thereof, whether as a Holder of such Transfer Restricted Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Issuers shall assist such Broker-Dealer in complying with the NASD Rules, including, without limitation, by: (i) if the NASD Rules shall so require, engaging a "qualified independent underwriter" (as defined in the NASD Rules) to participate in the preparation of the Shelf Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by the Shelf Registration Statement is an Underwritten Offering or is made through a placement or sales agent, to recommend the price of such Transfer Restricted Securities; (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of Underwriters provided in Section 5 hereof; and (iii) providing such information to such Broker-Dealer as may be required in order for such Broker-Dealer to comply with the requirements of the NASD Rules. (iv) Anything herein to the contrary notwithstanding, the Issuers will not be required to pay the costs and expenses of, or to participate in the marketing or "road show" presentations of, more than one Underwritten Offering initiated at the request of the Holders of Securities or shares of Common Stock issued or issuable upon conversion of the Notes, or to effect more than one Underwritten Offering at the request of such Holders. The Issuers will not be required to pay the costs and expenses of, or to participate in the marketing or "road show" presentations of, an Underwritten Offering unless Holders of at least the -15- Minimum Amount (as defined below) of Securities and/or Common Stock issued or issuable on conversion of the Notes have requested that such Securities and/or shares of Common Stock be included in such an Underwritten Offering. For purposes of this Agreement, the "Minimum Amount" means 50% of the aggregate principal amount of Notes originally issued under the Indenture; provided that, for purposes of computing the Minimum Amount, Holders of Common Stock issued upon conversion of Notes shall be deemed to be holders of the aggregate principal amount of Notes which were converted into those shares of Common Stock. Only Holders of Securities or shares of Common Stock issued or issuable upon conversion of the Notes which are Transfer Restricted Securities shall be entitled to include such Securities or shares of Common Stock in an Underwritten Offering and only Transfer Restricted Securities shall be included in the computation of the Minimum Amount. The Underwritten Offering initiated by Holders as aforesaid shall include both Securities and Common Stock if so requested by the Holders. Upon receipt by the Company and/or the Guarantor, from Holders of at least the Minimum Amount of Securities and/or Common Stock issued or issuable upon conversion of the Notes, of a request for an Underwritten Offering, the Issuers will, within 10 days thereafter, cause the Company to mail notice to all Holders of Securities and shares of Common Stock issued upon conversion of the Notes stating that: (1) the Company has received a request from the Holders of the requisite amount of Securities and/or Common Stock issued or issuable on conversion of the Notes to effect an Underwritten Offering on behalf of such Holders; (2) under the terms of this Agreement, all Holders of Securities and shares of Common Stock issued or issuable upon conversion of the Notes which are Transfer Restricted Securities may include their Securities and shares of Common Stock in such Underwritten Offering, subject to the terms and conditions set forth in this Agreement and subject to the right of the Managing Underwriters to reduce, in light of market conditions and other similar factors, the aggregate principal amount of Securities and number of shares of Common Stock included in such Underwritten Offering; (iii) all Holders electing to include Securities or shares of Common Stock in such Underwritten Offering must notify the Issuers in writing of such election (the "Election"), and setting forth an address and facsimile number to which such written elections may be sent and the deadline (which shall be 12:00 midnight on the 10th calendar day after such notice is mailed to Holders or, if not a Business Day, the next succeeding Business Day (the "Deadline")) by which such elections must be received by the Issuers; and (iv) setting forth such other instructions as shall be necessary to enable Holders to include their securities and shares of Common Stock in such Underwritten Offering. No Holder shall be entitled to participate in an Underwritten Offering unless such Holder notifies the Issuers of such Election by the Deadline. Notwithstanding anything to the contrary contained herein, if the Managing Underwriters for an Underwritten Offering to be effected pursuant to this Section 3(u) advise the Holders of the Securities and shares of the Common Stock to be included in such Underwritten Offering that, because of aggregate principal amount of Securities and/or number of shares of Common Stock that such Holders have requested be included in the Underwritten Offering, the -16- success of the offering would likely be materially adversely affected by the inclusion of all of the Securities and shares of Common Stock requested to be included, then the principal amount of Securities and the number of shares of Common Stock to be offered for the accounts of Holders shall be reduced pro rata, according to the aggregate principal amount of Securities and number of shares of Common Stock, respectively, requested for inclusion by each such Holder, to the extent necessary to reduce the size of the offering to the size recommended by the Managing Underwriter. Notwithstanding anything to the contrary contained herein, neither the Issuers nor any Person, other than a Holder of Securities or shares of Common Stock issued or issuable upon conversion of the Notes and only with respect to its Transfer Restricted Securities, shall be entitled to include any securities in the Underwritten Offering. 4. Registration Expenses. The Issuers shall bear all expenses incurred in connection with the performance of its obligations under Sections 2 and 3 hereof and shall reimburse the Holders for the reasonable fees and disbursements of one firm or counsel designated by the Majority Holders to act as counsel for the Holders in connection therewith. Notwithstanding the provisions of this Section 4, each Holder shall bear the expense of any broker's commission, agency fee or Underwriter's discount or commission. 5. Indemnification and Contribution. (a) Each of the Company and the Guarantor, jointly and severally, agrees to indemnify and hold harmless each Holder of Transfer Restricted Securities covered by any Shelf Registration Statement (including each of the Initial Purchasers), the directors, officers, employees and agents of each such Holder and each person who controls any such Holder within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement as originally filed or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by any of them in connection with defending any such loss, claim, damage, liability or action; provided, however, that neither the Company nor the Guarantor will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon (A) any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company or the Guarantor by or on behalf of any such Holder or any Initial Purchaser specifically for inclusion therein, (B) use of a Shelf Registration Statement or the related Prospectus during a period when use of such Prospectus has been suspended pursuant to Section 2(d) or Section 3(s) hereof; -17- provided, further, in each case, that Holders received prior notice of such suspension, or (C) if the Holder fails to deliver a Prospectus, as then amended or supplemented, provided that the Issuers shall have delivered to such Holder such Prospectus, as then amended or supplemented. This indemnity agreement will be in addition to any liability which the Company or the Guarantor may otherwise have. (b) Each Holder of Transfer Restricted Securities covered by a Shelf Registration Statement (including the Initial Purchasers) severally and not jointly agrees to indemnify and hold harmless (i) the Company and the Guarantor, (ii) each of their directors, (iii) each of their officers, and (iv) each person who controls the Company or the Guarantor within the meaning of either the Act or the Exchange Act to the same extent as the foregoing indemnity from the Issuers to each such Holder, but only with reference to written information relating to such Holder furnished to the Issuers by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement shall be in addition to any liability which any such Holder may otherwise have. (c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it was not otherwise notified of such action and such failure results in the forfeiture by the indemnifying party of any rights or defenses. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; -18- (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party and that representation of the indemnified party by counsel chosen by the indemnifying party would be inappropriate due to actual or potential differing interests among the parties represented by such counsel; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. Neither an indemnifying party nor an indemnified party will, without the prior written consent of the other parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not such other parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of such other parties from all liability arising out of such claim, action, suit or proceeding. An indemnifying party shall not be liable for any losses, claims, damages or liabilities by reason of any settlement of any action or proceeding effected without such indemnifying party's prior written consent, which consent will not be unreasonably withheld. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 5 is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party shall have an obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses"), as incurred, to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the Initial Placement and any sales of Transfer Restricted Securities under the Shelf Registration Statement; provided, however, that in no case shall the Initial Purchasers be responsible, in the aggregate, for any amount in excess of the purchase discount or commission applicable to the Securities, as set forth in the Purchase Agreement. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Issuers shall be deemed to be equal to the sum of (x) the total net proceeds from the Initial Placement (before deducting expenses) and (y) the total amount of Liquidated Damages which the Issuers -19- were not required to pay as a result of registering the Transfer Restricted Securities covered by the Shelf Registration Statement which resulted in such Losses. Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions received in connection with the Initial Placement, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Transfer Restricted Securities registered under the Act. Benefits received by any Underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Shelf Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to whether any untrue statement or omission or alleged untrue statement or omission relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 5(d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 5, each person who controls a Holder within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Company or the Guarantor within the meaning of either the Act or the Exchange Act, each officer of the Company who signed the Shelf Registration Statement and each director of the Company or the Guarantor shall have the same rights to contribution as the Company or the Guarantor, and each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each officer and director of each Underwriter shall have the same rights to contribution as such Underwriter, subject in each case to the applicable terms and conditions of this paragraph (d). (e) The provisions of this Section 5 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder, any Underwriter, the Company, the Guarantor or any of the officers, directors or controlling persons referred to in Section 5 hereof, and will survive the sale by a Holder of Transfer Restricted Securities covered by a Shelf Registration Statement. 6. Miscellaneous. (a) No Inconsistent Agreements. Neither the Company nor the Guarantor has, as of the date hereof, entered into nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not -20- be given, unless the Issuers have obtained the written consent of the Majority Holders; provided that with respect to any matter that directly or indirectly affects the rights of the Initial Purchasers hereunder, the Issuers shall obtain the written consent of each of the Initial Purchasers against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Transfer Restricted Securities are being sold pursuant to a Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of the Transfer Restricted Securities being sold rather than registered under such Shelf Registration Statement. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier, or air courier guaranteeing overnight delivery: (i) if to the Representatives, initially at its address set forth in the Purchase Agreement; (ii) if to any other Holder, at the most current address of such Holder maintained by the Registrar under the Indenture or the registrar of the Common Stock (provided that while the Securities or the Common Stock are in book-entry form, notice to the Trustee shall serve as notice to the Holders), or, in the case of the Notice Holder, the address set for in its Notice and Questionnaire; and (iii) if to the Company or the Guarantor, initially at the Company's address set forth in the Purchase Agreement. All such notices and communications shall be deemed to have been duly given when received, if delivered by hand or air courier, and when sent, if sent by first-class mail or telecopier. The Initial Purchasers or the Issuers by notice to the other may designate additional or different addresses for subsequent notices or communications. (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company or the Guarantor thereto, subsequent Holders. The Issuers hereby agree to extend the benefits of this Agreement to any Holder and Underwriter and any such Holder and Underwriter may specifically enforce the provisions of this Agreement as if an original party hereto. In the event that any other person shall succeed to the Company or the Guarantor under the Indenture, then such successor shall enter into an agreement, in form and substance reasonably satisfactory to the Representative, whereby such successor shall assume all of the Company's or Guarantor's obligations, as the case may be, under this Agreement. (c) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so -21- executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. (h) Severability. In the event that any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. (i) Securities Held by the Issuers, etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or the Common Stock issuable upon conversion of the Notes is required hereunder, Securities or the Common Stock issued upon conversion of the Notes held by the Company, the Guarantor or their Affiliates (other than subsequent Holders of Securities or the Common Stock issued upon conversion of the Notes if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (j) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Shelf Registration Period, except for any liabilities or obligations under Section 2(e), 4 or 5 to the extent arising prior to the end of the Shelf Registration Period. [signature page follows] -22- Please confirm that the foregoing correctly sets forth the agreement among the Company, the Guarantor and you. Very truly yours, GATX CORPORATION By: /s/ William J. Hasek ---------------------------------- Name: William J. Hasek Title: Treasurer GATX FINANCIAL CORPORATION By: /s/ Brian A. Kenney ---------------------------------- Name: Brian A. Kenney Title: Vice President and Chief Financial Officer The foregoing Agreement is hereby confirmed and accepted as of the date first above written. SALOMON SMITH BARNEY INC. J.P. MORGAN SECURITIES INC. By: Salomon Smith Barney Inc. By: /s/ Michael S. Canmann ------------------------------ Name: Michael S. Canmann Title: Director -23- FORM OF SELLING SECURITY HOLDER NOTICE AND QUESTIONNAIRE The undersigned beneficial holder of 7.5% Convertible Senior Notes due 2007 (the "Notes") of GATX Corporation ("GATX" or the "Company") or shares of common stock of the Company issuable upon conversion of the Notes (together with the Notes, the "Registrable Securities") of the Company understands that the Company has filed or intends to file with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Registrable Securities in accordance with the terms of the Registration Rights Agreement (the "Registration Rights Agreement") dated as of February 1, 2002 among the Company, GATX Financial Corporation and the initial purchasers named therein. The Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Registration Rights Agreement. Each beneficial owner of Registrable Securities is entitled to the benefits of the Registration Rights Agreement. In order to sell or otherwise dispose of any Registrable Securities pursuant to the Shelf Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a selling securityholder in the related prospectus, deliver a prospectus to purchasers of Registrable Securities and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification provisions as described below). Beneficial owners that do not complete this Notice and Questionnaire and deliver it to the Company as provided below will not be named as selling securityholders in the prospectus and therefore will not be permitted to sell any Registrable Securities pursuant to the Shelf Registration Statement. Beneficial owners are encouraged to complete and deliver this Notice and Questionnaire prior to the effectiveness of the Shelf Registration Statement so that such beneficial owners may be named as selling securityholders in the related prospectus at the time of effectiveness. Upon receipt of a completed Notice and Questionnaire from a beneficial owner following the effectiveness of the Shelf Registration Statement, the Company will, as promptly as practicable but in any event within five business days of such receipt, file such amendments to the Shelf Registration Statement or supplements to the related prospectus as are necessary to permit such holder to deliver such prospectus to purchasers of Registrable Securities. Certain legal consequences may arise from being named as selling securityholders in the Shelf Registration Statement and the related prospectus. Accordingly, holders and beneficial owners 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 Shelf Registration Statement and the related prospectus. Notice The undersigned beneficial owner (the "Selling Securityholder") of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities beneficially owned by it and listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by signing and returning A-1 this Notice and Questionnaire, understands that it will be bound by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement. The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: Questionnaire 1. (a) Full Legal Name of Selling Securityholder: --------------------------------------------------------------------------- (b) Full legal name of Registered Holder (if not the same as (a) above) through which Registrable Securities listed in (3) below are held: --------------------------------------------------------------------------- (c) Full legal name of broker-dealer or other third party through which Registrable Securities listed in (3) below are held: --------------------------------------------------------------------------- (d) Full legal name of DTC Participant (if applicable and if not the same as (b) or (c) above) through which Registrable Securities listed in (3) below are held: --------------------------------------------------------------------------- 2. Address for Notices to Selling Securityholder: --------------------------------------------------------------------------- --------------------------------------------------------------------------- Telephone: ----------------------------------------------------------------- Fax: ---------------------------------------------------------------------- Contact Person ------------------------------------------------------------ 3. Beneficial Ownership of Registrable Securities: (a) Type and Principal Amount of Registrable Securities beneficially owned: --------------------------------------------------------------------------- --------------------------------------------------------------------------- (b) CUSIP No(s). of such Registrable Securities beneficially owned: --------------------------------------------------------------------------- --------------------------------------------------------------------------- Unless otherwise indicated in the space provided below, all Notes and all shares of common stock listed in response to Item (3)(a) above, and all shares of common stock issuable upon conversion of the Notes listed in response to Item (3)(a) above, will be A-2 included in the Shelf Registration Statement. If the undersigned does not wish all such Notes or shares of common stock to be so included, please indicate below the principal amount or the number of shares to be included: --------------------------------------------------------------------------- --------------------------------------------------------------------------- 4. Beneficial Ownership of Company securities owned by the Selling Securityholder: Except as set forth below in this Item (4), the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item (3). (a) Type and Amount of Other Securities beneficially owned by the Selling Securityholder: --------------------------------------------------------------------------- --------------------------------------------------------------------------- (b) CUSIP No(s). of such Other Securities beneficially owned: --------------------------------------------------------------------------- --------------------------------------------------------------------------- 5. Relationship with the Company: Except as set forth below, neither the undersigned nor any of its affiliates, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (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 (including its donees or pledgees) intends to distribute the Registrable Securities listed above in Item (3) pursuant to the Shelf Registration Statement only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned or alternatively through underwriters or broker-dealers or agents. If the Registrable Securities are sold through underwriters or broker-dealers or agents, the Selling Securityholder will be responsible for underwriting discounts or commissions or agent's commissions. 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 A-3 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 Registrable 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 undersigned may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the 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. The Selling Securityholder may pledge or grant a security interest in some or all of the Registrable Securities owned by it and, if it defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell the Registrable Securities from time to time pursuant to the prospectus. The Selling Securityholder also may transfer and donate shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling securityholder for purposes of the prospectus. State any exceptions here: --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- Note: In no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company. The undersigned acknowledges that it understands its obligation to comply with the provisions of the Securities Exchange Act of 1934, as amended, and the rules thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor rules or regulations) and the provisions of the Securities Act of 1933, as amended, relating to prospectus delivery, in connection with any offering of Registrable Securities pursuant to the Shelf Registration Statement. The undersigned agrees that neither it nor any person acting on its behalf will engage in any transaction in violation of such provisions. The Selling Securityholder hereby acknowledges its obligations under the Registration Rights Agreement to indemnify and hold harmless certain persons set forth therein. Pursuant to the Registration Rights Agreement, the Company has agreed under certain circumstances to indemnify the Selling Securityholders against liabilities. In accordance with the undersigned's obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below. A-4 In the event any Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item 3 above after the date on which such information is provided to GATX, the Selling Securityholder will notify the transferee(s) at the time of transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement. By signing below, the undersigned 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 Shelf Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company without independent investigation or inquiry in connection with the preparation or amendment of the Shelf Registration Statement and the related prospectus. 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 authorized agent. Beneficial Owner By: --------------------------------------------- Name: Title: Dated: PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO: GATX Corporation 500 West Madison Street Chicago, Illinois 60661 Attention: Treasurer A-5 EX-5.1 5 dex51.txt OPINION OF MAYER, BROWN, ROWE & MAW Exhibit 5.1 MAYER, BROWN, ROWE & MAW 190 South La Salle Street Chicago, Illinois 60603-3441 MAIN TELEPHONE (312) 782-0600 MAIN FAX (312) 701-7711 June 17, 2002 GATX Corporation 500 West Monroe Street Chicago, Illinois 60661 GATX Financial Corporation 500 West Monroe Street Chicago, Illinois 60661 Ladies and Gentlemen: We have acted as your counsel in connection with the registration of $175,000,000 aggregate principal amount of 7.5% Convertible Senior Notes due 2007 (the "Notes") issued by GATX Corporation, a New York corporation (the "Company"), and the shares of common stock, $.625 par value per share, of the Company into which the Notes may be converted (the "Shares"). The Notes are fully and unconditionally guaranteed (the "Guarantee") by GATX Financial Corporation, a Delaware corporation (the "Guarantor"). The Notes were issued pursuant to an indenture, dated as of February 1, 2002, by and among the Company, the Guarantor and JPMorgan Chase Bank, as trustee. The Notes and the Shares may be sold from time to time by the holders thereof. In rendering the opinions expressed herein, we have examined and relied upon such documents, corporate records, certificates of public officials and certificates as to factual matters executed by officers of the Company and the Guarantor as we have deemed necessary or appropriate. We have assumed the authenticity, accuracy and completeness of all documents, records, and certificates submitted to us as originals, the conformity to the originals of all documents, records and certificates submitted to us as copies and the authenticity, accuracy and completeness of the originals of all documents, records and certificates submitted to us as copies. We have also assumed the legal capacity and genuineness of the signatures of persons signing all documents in connection with which the opinions expressed herein are rendered. Based upon and subject to the foregoing and to the limitations set forth herein, we are of the opinion that: (i) The Notes have been legally issued and are binding obligations of the Company enforceable in accordance with their terms except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws affecting creditors' rights generally and subject to general principles of equity. (ii) The Shares, when issued upon conversion of the Notes, will be legally issued, fully paid and non-assessable. (iii) The Guarantee has been legally issued and is the binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws affecting creditors' rights generally and subject to general principles of equity. We hereby consent to the filing of this opinion letter as an exhibit to the registration statement covering resales of the Notes and the Shares and to the reference to this firm under the caption "Legal Matters" contained therein. Very truly yours, /S/ MAYER, BROWN, ROWE & MAW MAYER, BROWN, ROWE & MAW EX-12.1 6 dex121.txt COMP OF RATIOS - GATX CORPORATION EXHIBIT 12.1 GATX CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Three Months Ended March 31, Year Ended December 31, ------------------ ------------------------------------------- IN MILLIONS, EXCEPT RATIOS 2002 2001 2001 2000 1999 1998 1997 - -------------------------------------------------------------------------------------------------------------------- Earnings available for fixed charges: Income from continuing operations $ 18.9 $ 4.4 $ 7.5 $ 30.8 $126.3 $114.2 $102.6 Add (deduct): Income tax (benefit) provision 12.0 11.3 (1.9) 22.7 82.8 86.0 66.8 Share of affiliates' earnings, net of distributions received (12.7) (9.6) (22.5) (43.2) (41.7) 3.5 (1.0) Interest on indebtedness and amortization of debt discount and expense 55.4 61.0 249.9 242.6 179.9 180.5 164.9 Portion of operating lease expense representative of interest factor (deemed to be one-third) 14.6 16.1 64.9 59.6 51.0 46.5 42.0 - --------------------------------------------------------------------------------------------------------------------- Total earnings available for fixed charges $ 88.2 $ 83.2 $297.9 $312.5 $398.3 $430.7 $375.3 - --------------------------------------------------------------------------------------------------------------------- Preferred stock dividends $ -- $ -- $ .1 $ .1 $ .1 $ .1 $ 6.6 Ratio to convert preferred dividends to pre-tax basis 163% 357% 75% 174% 166% 175% 165% - --------------------------------------------------------------------------------------------------------------------- Preferred dividends on pre-tax basis -- -- .1 .2 .2 .2 7.1 Fixed charges: Interest on indebtedness and amortization of debt discount and expense 55.4 61.0 249.9 242.6 179.9 180.5 164.9 Capitalized interest 3.9 3.5 14.4 10.4 4.3 2.1 1.6 Portion of operating lease expense representative of interest factor (deemed to be one-third) 14.6 16.1 64.9 59.6 51.0 46.5 42.0 - --------------------------------------------------------------------------------------------------------------------- Combined fixed charges and preferred stock dividends $73.9 $80.6 $329.3 $312.8 $235.4 $229.3 $215.6 - --------------------------------------------------------------------------------------------------------------------- Ratio of earnings to combined fixed charges and preferred stock dividends (A) 1.19x 1.03x .90x(1) 1.00x 1.69x 1.88x 1.74x
(A) The ratio of earnings to fixed charges represents the number of times "fixed charges" are covered by "earnings." "Fixed charges" consist of interest on outstanding debt and amortization of debt discount and expense, adjusted for capitalized interest and one-third (the proportion deemed representative of the interest factor) of operating lease expense. "Earnings" consist of consolidated net income before income taxes and fixed charges, less share of affiliates' earnings, net of distributions received. ================================================================================ - ---------- (1) For the year ended December 31, 2001, combined fixed charges and preferred stock dividends exceeded earnings by $31.4 million. EX-12.2 7 dex122.txt COMP OF RATIOS - GATX FINANCIAL CORPORATION EXHIBIT 12.2 GATX FINANCIAL CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Three Months Ended March 31, Year Ended December 31, ------------------ ------------------------------------------ IN MILLIONS, EXCEPT RATIOS 2002 2001 2001 2000 1999 1998 1997 ------ ----- ------ ------ ------ ------ ------ Earnings available for fixed charges: Income from continuing operations $28.2 $16.1 $ 44.1 $ 59.6 $156.6 $150.6 $127.8 Add (deduct): Income tax provision 16.7 11.4 14.2 34.9 100.3 98.9 79.7 Share of affiliates' earnings, net of distributions received (12.7) (9.6) (22.5) (43.1) (41.7) (24.4) (1.2) Interest on indebtedness and amortization of debt discount and expense 52.8 62.3 244.5 238.8 173.3 169.4 155.2 Portion of operating lease expense representative of interest factor (deemed to be one-third) 14.7 15.7 63.8 58.4 50.0 43.8 40.4 - --------------------------------------------------------------------------------------------------------------------------- Total earnings available for fixed charges $99.7 $95.9 $344.1 $348.6 $438.5 $438.3 $401.9 - --------------------------------------------------------------------------------------------------------------------------- Fixed charges: Interest on indebtedness and amortization of debt discount and expense $52.8 $62.3 244.5 238.8 173.3 $169.4 $155.2 Capitalized interest 3.9 3.5 14.4 10.4 4.3 2.0 1.4 Portion of operating lease expense representative of interest factor (deemed to be one-third) 14.7 15.7 63.8 58.4 50.0 43.8 40.4 - --------------------------------------------------------------------------------------------------------------------------- Combined fixed charges and preferred stock dividends $71.4 $81.5 $322.7 $307.6 $227.6 $215.2 $197.0 - --------------------------------------------------------------------------------------------------------------------------- Ratio of earnings to combined fixed charges and preferred stock dividends (A) 1.40x 1.18x 1.07x 1.13x 1.93x 2.04x 2.04x
(A) The ratio of earnings to fixed charges represents the number of times "fixed charges" are covered by "earnings." "Fixed charges" consist of interest onoutstanding debt and amortization of debt discount and expense, adjusted for capitalized interest and one-third (the proportion deemed representative of the interest factor) of operating lease expense. "Earnings" consist of consolidated net income before income taxes and fixed charges, less share of affiliates' earnings, net of distributions received. ================================================================================ EX-23.2 8 dex232.txt CONSENT OF ERNST & YOUNG Exhibit 23.2 Consent of Independent Auditors We consent to the reference to our firm under the caption "Experts" in Amendment No. 1 to the Registration Statement Form S-3 and related Prospectus of GATX Corporation and GATX Financial Corporation for the registration of $175,000,000 of 7.5% Convertible Senior Notes due 2007 and to the incorporation by reference therein of our reports dated January 22, 2002, with respect to the consolidated financial statements and schedules of GATX Corporation and GATX Financial Corporation included in their Annual Reports on Form 10-K for the year ended December 31, 2001, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP Chicago, Illinois June 17, 2002 EX-25.1 9 dex251.txt FORM T-1 OF JPMORGANCHASEBANK Exhibit 25.1 ------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- GATX CORPORATION GATX FINANCIAL CORPORATION (Exact name of obligor as specified in its charter) New York 36-1124040 Delaware 94-1661392 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 500 West Monroe Street Chicago, Illinois 60661 (Address of principal executive offices) (Zip Code) -------------------------------------------- 7.5% Convertible Senior Notes due 2007 (Title of the indenture securities) ------------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor and Guarantors. If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority (see Exhibit 7 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 10/th/ day of June, 2002. JPMORGAN CHASE BANK By /s/ James P. Freeman ---------------------------- James P. Freeman Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2002, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .............................................. $ 22,028 Interest-bearing balances ...................................... 9,189 Securities: Held to maturity securities.......................................... 428 Available for sale securities........................................ 56,159 Federal funds sold and securities purchased under agreements to resell ........................................... Federal funds sold in domestic offices 1,901 Securities purchased under agreements to resell 69,260 Loans and lease financing receivables: Loans and leases held for sale ................................. 13,042 Loans and leases, net of unearned income $165,950 Less: Allowance for loan and lease losses 3,284 Loans and leases, net of unearned income and allowance ...................................................... 162,666 Trading Assets ...................................................... 152,633 Premises and fixed assets (including capitalized leases)............. 5,737 Other real estate owned ............................................. 43 Investments in unconsolidated subsidiaries and associated companies............................................ 366 Customers' liability to this bank on acceptances outstanding .................................................... 306 Intangible assets Goodwill ....................................................... 1,908 Other Intangible assets ........................................ 7,218 Other assets ........................................................ 38,458 TOTAL ASSETS ........................................................ $ 541,342 =========
-4- LIABILITIES Deposits In domestic offices ............................................ $151,985 Noninterest-bearing .......................$ 66,567 Interest-bearing ............................85,418 In foreign offices, Edge and Agreement subsidiaries and IBF's ......................................... 119,955 Noninterest-bearing .......................$ 6,741 Interest-bearing ...........................113,214 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices 12,983 Securities sold under agreements to repurchase 82,618 Trading liabilities ................................................. 94,099 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) ...................... 10,234 Bank's liability on acceptances executed and outstanding ............ 311 Subordinated notes and debentures ................................... 9,679 Other liabilities ................................................... 25,609 TOTAL LIABILITIES ................................................... 507,473 Minority Interest in consolidated subsidiaries ...................... 109 EQUITY CAPITAL Perpetual preferred stock and related surplus ....................... 0 Common stock ........................................................ 1,785 Surplus (exclude aii surplys related to preferred stock) ............ 16,304 Retained earnings ................................................... 16,548 Accumulated other comprehensive income .............................. (877) Other equity capital components ..................................... 0 TOTAL EQUITY CAPITAL ................................................ 33,760 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ............ $541,342 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) ELLEN V. FUTTER ) LAWRENCE A. BOSSIDY ) -5- -----END PRIVACY-ENHANCED MESSAGE-----