REGISTRATION RIGHTS AGREEMENT
Exhibit
10.42
REGISTRATION
RIGHTS AGREEMENT
(this
"Agreement"),
dated
as of April 4, 2007, by and among American Real Estate Partners, LP, a Delaware
limited partnership with headquarters located at 000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, Xxx Xxxx 00000 (the "Company"),
the
undersigned buyers (the "Initial
Buyers")
and
the investors that have executed one or more Joinder Agreements (as defined
in
the Securities Purchase Agreement) pursuant to Section 1(b) of the Securities
Purchase Agreement (together with the Initial Buyers, each, a "Buyer",
and
collectively, the "Buyers").
WHEREAS:
A. The
Company has authorized the issuance of up to $600,000,000 of Senior Convertible
Notes due 2013 pursuant to the Indenture dated of even date herewith, between
the Company and Wilmington Trust Company, as Trustee (as the same may be amended
from time to time, the "Indenture").
B. In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the "Securities
Purchase Agreement"),
the
Company has agreed, upon the terms and subject to the conditions set forth
in
the Securities Purchase Agreement, to issue and sell, at an Initial Closing
(as
defined in the Securities Purchase Agreement), to the Initial Buyers an
aggregate of $200,000,000 principal amount of the Notes (the "Initial
Notes")
which
will, among other things, be convertible into Units (as defined below) (as
converted, the "Initial
Conversion Units"),
in
accordance with the terms of the Initial Notes.
C. In
connection with the Securities Purchase Agreement, the Initial Buyers shall
have
the right to participate in one or more Additional Closings (as defined in
the
Securities Purchase Agreement) in order to purchase, and require the Company
to
sell up to an additional $400,000,000 in aggregate principal amount of Notes
(the "Additional
Notes,"
and
together with the Initial Notes, the "Notes")
which
will, among other things, be convertible into Units (as converted, collectively,
the "Additional
Conversion Units,"
and
together with the Initial Conversion Units, the "Conversion
Units").
D. In
connection with the Securities Purchase Agreement, the Company may permit one
or
more additional parities (each of which shall become a party to the Securities
Purchase Agreement and this Agreement by executing a Joinder Agreement) to
purchase and require the Company to sell any Additional Notes not previously
sold to the Initial Buyers.
E. To
induce
the Initial Buyers to execute and deliver the Securities Purchase Agreement
and
each Additional Buyer to execute a Joinder Agreement, the Company has agreed
to
provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "1933
Act"),
and
applicable state securities laws.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and each of the Buyers hereby agree as
follows:
1. Definitions.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"1933
Act"
has the
meaning set forth in the preamble of this Agreement.
"1934
Act"
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC promulgated thereunder.
"Additional
Effectiveness Date"
means
the date the Additional Shelf Registration Statement is declared effective
by
the SEC.
"Additional
Effectiveness Deadline"
means
the date (i) in the event that the Additional Shelf Registration Statement
is
not subject to a full review by the SEC, sixty (60) calendar days after the
Additional Filing Date or (ii) in the event that the Additional Shelf
Registration Statement is subject to a full review by the SEC, ninety (90)
calendar days after the Additional Filing Date, in each case subject to any
Suspension Period pursuant to Section 2(e) hereof.
"Additional
Filing Date"
means
the date on which the Additional Shelf Registration Statement is filed with
the
SEC.
"Additional
Filing Deadline"
means
the later of (i) the date sixty (60) days after the date substantially all
of
the Transfer Restricted Securities registered
under the immediately preceding Shelf Registration Statement are
sold
and (ii)
the date six (6) months from the Initial Effective Date or the last Additional
Effective Date, as applicable, in each case subject to any Suspension Period
pursuant to Section 2(e) hereof.
"Additional
Interest"
has the
meaning set forth in Section 2(f) hereof.
"Additional
Interest Payment Date"
means
each January 15, April 15, July 15 and October 15.
"Additional
Required Registration Amount"
means
any Cutback Units not previously included on a Shelf Registration Statement;
provided,
however,
that
such amount shall not exceed a number of Units equal to one third (1/3) of
an
amount equal to the non-affiliate public float of the Company's Units immediate
preceding the consummation of the transactions contemplated by the Securities
Purchase Agreement, without regard to any limitations on conversions of the
Notes.
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"Additional
Shelf Registration Statement"
means
any "shelf" registration statement of the Company filed pursuant to the
provisions of Section 2(b) hereof which covers the Additional Transfer
Restricted Securities on Form S-3 or on another appropriate form (as determined
by the Company) for an offering to be made on a delayed or continuous basis
pursuant to Rule 415 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.
"Additional
Transfer Restricted Securities"
means,
(i) any Cutback Units not previously included on a Shelf Registration Statement
and (ii) any securities of the Company issued or issuable with respect to the
Cutback Units as a result of any split, dividend, recapitalization, exchange
or
similar event or otherwise, without regard to any limitations on conversions
of
the Notes, until the earliest of the date on which such Cutback Units, or any
security issued with respect thereto upon any dividend, split or similar event,
as the case may be: (i) has been transferred pursuant to a Shelf Registration
Statement or another registration statement covering such Conversion Units
which
has been filed with the SEC pursuant to the 1933 Act, in either case after
such
registration statement has become effective and while such registration
statement is effective under the 1933 Act; (ii) has been transferred pursuant
to
Rule 144; (iii) may be sold or transferred pursuant to Rule 144(k); or (iv)
ceases to be outstanding.
"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.
"Business
Day"
means
any day other than Saturday, Sunday or any other day on which commercial banks
in The City of New York are authorized or required by law to remain
closed.
"Buyers"
has the
meaning set forth in the preamble of this Agreement.
"Company"
has the
meaning set forth in the preamble of this Agreement.
"Conversion
Units"
has the
meaning set forth in the preamble of this Agreement.
"Cutback
Units"
means
any Transfer Restricted Securities not included on a Shelf Registration
Statement previously declared effective hereunder.
"Effective
Date"
means
the Initial Effective Date and the Additional Effective Date, as
applicable.
"Effectiveness
Deadline"
means
the Initial Effectiveness Deadline and the Additional Effectiveness Deadline,
as
applicable.
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"Filing
Date"
means
the Initial Filing Date and the Additional Filing Date, as applicable.
"Filing
Deadline"
means
the Initial Filing Deadline and the Additional Filing Deadline, as
applicable.
"Holder"
means a
Person who is a holder or beneficial owner of any Notes or Conversion Units
(including, without limitation, Notes or Conversion Units received pursuant
to a
transfer).
"Holder
Information"
with
respect to any Holder means information with respect to such Holder required
to
be included in any Shelf Registration Statement or the related Prospectus
pursuant to the 1933 Act and which information is included therein in reliance
upon and in conformity with information furnished to the Company in writing
by
such Holder specifically for inclusion therein, including information provided
by such Holder in its Notice and Questionnaire.
"Indenture"
has the
meaning set forth in the preamble of this Agreement.
"Initial
Closing Date"
means
the date of the closing of the sale of the Initial Notes as contemplated by
the
Securities Purchase Agreement.
"Initial
Effective Date"
means
the date the Initial Shelf Registration Statement has been declared effective
by
the SEC.
"Initial
Effectiveness Deadline"
means
the date (i) in the event that the Initial Shelf Registration Statement is
not
subject to a full review by the SEC, one-hundred and eighty (180) calendar
days
after the Initial Closing Date or (ii) in the event that the Initial Shelf
Registration Statement is subject to a full review by the SEC, two-hundred
and
seventy (270) calendar days after the Initial Closing Date, in each case subject
to any Suspension Period pursuant to Section 2(e) hereof.
"Initial
Filing Date"
means
the date on which the Initial Shelf Registration Statement is filed with the
SEC.
"Initial
Filing Deadline"
means
ninety (90) calendar days after the Initial Closing Date, subject to any
Suspension Period pursuant to Section 2(e) hereof.
"Initial
Required Registration Amount"
means
the number of Conversion Units (including, without limitation, any Make-Whole
Units issuable upon conversion of the Notes) issued or issuable pursuant to
the
Notes as of the trading day immediately preceding the applicable date of
determination; provided,
however,
that
such number of Conversion Units shall not exceed one third (1/3) of an amount
equal to the non-affiliate public float of the Company’s Units immediately
preceding the consummation of the transactions contemplated by the Securities
Purchase Agreement, without regard to any limitations on conversions of the
Notes.
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"Initial
Shelf Registration Statement"
means
any "shelf" registration statement of the Company filed pursuant to the
provisions of Section 2(a) hereof which covers the Initial Transfer Restricted
Securities on Form S-3 or on another appropriate form (as determined by the
Company) for an offering to be made on a delayed or continuous basis pursuant
to
Rule 415 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.
"Initial
Transfer Restricted Securities"
means
the Conversion Units (including, without limitation, any Make-Whole Units
issuable upon conversion of the Notes) issued and issuable upon conversion
of
the Notes (and any security issued with respect thereto upon any dividend,
split
or similar event) until the earliest of the date on which such Conversion Units,
or any security issued with respect thereto upon any dividend, split or similar
event, as the case may be: (i) has been transferred pursuant to a Shelf
Registration Statement or another registration statement covering such
Conversion Units which has been filed with the SEC pursuant to the 1933 Act,
in
either case after such registration statement has become effective and while
such registration statement is effective under the 1933 Act; (ii) has been
transferred pursuant to Rule 144; (iii) may be sold or transferred pursuant
to
Rule 144(k); or (iv) ceases to be outstanding.
"Legal
Counsel"
means
one firm or counsel designated by the Company (and reasonably acceptable to
the
Buyers acting on behalf of the Holders) to act as counsel for the Holders in
connection therewith, which firm shall be Xxxxxxx Xxxx & Xxxxx
LLP.
"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
Notes being registered under a Shelf Registration Statement; provided that
Holders of the Units issued upon conversion of Notes shall be deemed to be
Holders of the aggregate principal amount of Notes from which such Unit was
converted; and provided further, that Notes or Units which have been sold or
otherwise transferred pursuant to the Shelf Registration Statement shall not
be
included in the calculation of Majority Holders.
"NASD"
means
the National Association of Securities Dealers, Inc.
"Notes"
has the
meaning set forth in the preamble hereto.
"Notice
and Questionnaire"
means a
Selling Securityholder Notice and Questionnaire substantially in the form of
Exhibit
A
attached
hereto.
"Notice
Holder"
means
any Holder of Transfer Restricted Securities that has delivered a properly
completed and signed Notice and Questionnaire to the Company in accordance
with
Section 2(c) hereof.
"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 1933 Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Notes or Conversion Units 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.
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"Questionnaire
Deadline"
has the
meaning set forth in Section 2(c) hereof.
"Record
Holder"
means
each Person who is registered on the books of the registrar as the holder of
Notes at the close of business on each January 1, April 1, July 1 and October
1
immediately preceding each Additional Interest Payment Date.
"Registration
Delay Event"
has the
meaning set forth in Section 2(f) hereof.
"Required
Registration Amount"
means
the Initial Required Registration Amount and the Additional Required
Registration Amount, as applicable.
"Rule
144"
means
Rule 144 under the 1933 Act (or any similar provision promulgated by the
SEC).
"Rule
144A"
means
Rule 144A under the 1933 Act (or any successor provision promulgated by the
SEC).
"Rule
144(k)"
means
Rule 144(k) under the 1933 Act (or any successor provision promulgated by the
SEC).
"Rule
415"
means
Rule 415 under the 1933 Act (or any successor provision promulgated by the
SEC).
"SEC" means
the
Securities and Exchange Commission.
"Securities
Purchase Agreement"
has the
meaning set forth in the preamble of this Agreement.
"Shelf
Registration"
means a
registration effected pursuant to Section 2 hereof.
"Shelf
Registration Period"
has the
meaning set forth in Section 2(d) hereof.
"Shelf
Registration Statement"
means
the Initial Shelf Registration Statement and the Additional Shelf Registration
Statement, as applicable.
"Suspension
Period"
has the
meaning set forth in Section 2(e) hereof.
"Transfer
Restricted Securities"
means
the Initial Transfer Restricted Securities and the Additional Transfer
Restricted Securities, as applicable.
"Trustee"
means
the trustee with respect to the Notes under the Indenture.
"Units"
means
the depositary units representing limited partner interests of the Company,
as
it exists on the date of this Agreement and any other equity capital or other
securities of the Company into which such Units may be reclassified or changed,
together with any and all other securities which may from time to time be
issuable upon conversion of Notes.
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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 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 1934 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
Company shall, at its expense, prepare and, as soon as practicable but
in no
event later than the Initial Filing Deadline, file with the SEC the Initial
Shelf Registration Statement with respect to resales of the Initial Transfer
Restricted Securities by the Holders from time to time on a delayed or
continuous basis pursuant to Rule 415 and in accordance with the methods
of
distribution set forth in such Initial Shelf Registration Statement and
thereafter shall use its reasonable best efforts to cause such Initial
Shelf
Registration Statement to be declared effective under the 1933 Act as soon
as
possible, but no later than the Initial Effectiveness Deadline. The Initial
Shelf Registration Statement prepared pursuant hereto shall register for
resale
at least a number of Initial Transfer Restricted Securities equal to the
Initial
Required Registration Amount determined as of date the Initial Shelf
Registration Statement is initially filed with the SEC. The Shelf Registration
Statement shall contain the "Selling
Securityholders"
and
"Plan
of Distribution"
sections in substantially the form attached hereto as Exhibit
B.
The
Company shall supplement or amend the Initial Shelf Registration Statement
if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for the Initial Shelf Registration
Statement, or by the 1933 Act, the 1934 Act or the SEC. By 9:30 a.m., New
York
City time, on the date following the Initial Effective Date, the Company
shall
file with the SEC in accordance with Rule 424 under the 1933 Act the final
Prospectus to be used in connection with sales pursuant to such Initial
Shelf
Registration Statement.
b. The
Company shall, at its expense, prepare and, as soon as practicable but
in no
event later than the Additional Filing Deadline, file with the SEC the
Additional Shelf Registration Statement with respect to resales of the
Additional Transfer Restricted Securities by the Holders from time to time
on a
delayed or continuous basis pursuant to Rule 415 and in accordance with
the
methods of distribution set forth in such Additional Shelf Registration
Statement and thereafter shall use its reasonable best efforts to cause
such
Additional Shelf Registration Statement to be declared effective under
the 1933
Act as soon as possible, but no later than the Additional Effectiveness
Deadline. The Additional Registration Statement
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prepared
pursuant hereto shall register for resale at least a number of Additional
Transfer Restricted Securities equal to the Additional Required Registration
Amount determined as of date the Additional Shelf Registration Statement
is
initially filed with the SEC. To the extent the all of the Transfer Restricted
Securities have not been registered on an effective Shelf Registration
Statement, the Company shall file Additional Shelf Registration Statements
successively trying to register on each such Additional Registration Statement
the maximum number of remaining Additional Registrable Securities until
all of
the Transfer Restricted Securities have been registered with the SEC. The
Shelf
Registration Statement shall contain the "Selling
Securityholders"
and
"Plan
of Distribution"
sections in substantially the form attached hereto as Exhibit
B.
The
Company shall supplement or amend the Additional Shelf Registration Statement
if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for the Additional Shelf Registration
Statement, or by the 1933 Act, the 1934 Act or the SEC. By 9:30 a.m., New
York
City time, on the date following the Additional Effective Date, the Company
shall file with the SEC in accordance with Rule 424 under the 1933 Act
the final
Prospectus to be used in connection with sales pursuant to such Additional
Shelf
Registration Statement.
c. (i) The
Company shall name each Holder that delivers a properly completed and signed
Notice and Questionnaire to the Company as a selling security holder in
the
Shelf Registration Statement. A Holder of Transfer Restricted Securities
may
include such securities in the Shelf Registration Statement only if the
Holder
sends by first-class registered mail or by courier with delivery confirmation,
a
properly completed Notice and Questionnaire to the Company. In order to
be
included in the Shelf Registration Statement at the time of its effectiveness,
a
Buyer must deliver to the Company its properly completed Notice and
Questionnaire on or prior to the 20th Business Day of the Initial Closing
Date
(or, in the case of a Holder that is a transferee of Transfer Restricted
Securities, on or prior to the earlier of (x) the fifth Business Day after
the
completion of the transfer of Transfer Restricted Securities to the transferee
and (y) 9:00 a.m., New York time, on the fifth Business Day prior to
effectiveness of the Shelf Registration Statement) (in any case, the
"Questionnaire
Deadline").
The
Company agrees and undertakes that it shall distribute a Notice and
Questionnaire (A) no later than 20 Business Days prior to the expected
effectiveness of each Shelf Registration Statement other than the Initial
Shelf
Registration Statement to each Holder in accordance with Section 6(c) hereof,
and (B) in the case of a Holder that is a transferee of Transfer Restricted
Securities upon the request of such transferee Holder given in accordance
with
Section 6(c) hereof, to such Holder at the address set forth in such
request.
(ii) Following
the effectiveness of the Shelf Registration Statement, upon receipt of
a
completed Notice and Questionnaire from a Holder, the Company will, as
promptly
as practicable, but in any event within five (5) Business Days after its
receipt
thereof, file any amendments to the Shelf Registration Statement or supplements
to the related Prospectus as are necessary to permit the Holder to deliver
the
Prospectus to purchasers of Transfer Restricted Securities (subject to
the right
of the Company to suspend the use of the Prospectus as described in Section
2(e)
hereof). The Company shall use its reasonable best efforts to cause any
such
post-effective amendment to become effective under the 1933 Act as promptly
as
is practicable; provided, that if a Notice and Questionnaire is delivered
to the
Company during a Suspension Period, the Company shall not be obligated
to amend
the Shelf
-8-
Registration
Statement or supplement the Prospectus until the termination of such Suspension
Period.
(iii) Each
Holder as to which the Shelf Registration Statement is being effected agrees
to
furnish promptly to the Company upon reasonable request (x) such other
information as the Company may reasonably request for use in connection
with the
Shelf Registration Statement or Prospectus or in any application to be
filed
with or under state securities laws and (y) all information required to
be
disclosed in order to make the information previously furnished to the
Company
by such Holder not misleading.
d. The
Company shall use its reasonable best efforts to keep the applicable Shelf
Registration Statement continuously effective, supplemented and amended
under
the 1933 Act in order to permit the Prospectus forming a part thereof to
be
usable, subject to Section 2(e) hereof, by all Notice Holders until the
earliest
to occur of: (i) the last date on which the holding period applicable to
sales
of all applicable Transfer Restricted Securities under Rule 144(k) has
expired;
(ii) the date as of which all applicable Transfer Restricted Securities
have
been transferred under Rule 144; and (iii) such date as of which all applicable
Transfer Restricted Securities have been sold pursuant to the applicable
Shelf
Registration Statement (in any such case, such period being called the
"Shelf
Registration Period").
The
Company will, in order to fulfill its obligations and this Section 2(d):
(x)
subject to Section 2(e), 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(e), 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 1933 Act; and (z) comply in all material respects with the provisions
of the
1933 Act with respect to the disposition of all Transfer Restricted Securities
covered by the Shelf Registration Statement during the Shelf Registration
Period.
e. The
Company may suspend the availability of any Shelf Registration Statement
and the
use of any Prospectus, delay the filing of any Shelf Registration Statement
or
delay the effectiveness of any Shelf Registration Statement (the period
during
which the availability of any Shelf Registration Statement and any Prospectus
may be suspended and the filing or effectiveness may be delayed herein
referred
to as the "Suspension
Period"),
without incurring any obligation to pay Additional Interest pursuant to
Section
2(f) for a period not to exceed 60 days in the aggregate during any 12-month
period, in each case only for valid business reasons, to be determined
in good
faith by the Company in its reasonable judgment (which shall not include
the
avoidance of the Company's obligations hereunder), including, without
limitation, the acquisition or divestiture of assets, pending corporate
developments, public filings with the SEC and similar events; provided,
that the
Company promptly thereafter complies with the requirements of Section 3(j)
hereof, if applicable. The first day of any Suspension Period must be at
least
five (5) trading days after the last day of any prior Suspension
Period.
f. The
Company and the Buyers agree that the Holders of Transfer Restricted Securities
will suffer damages, and it would not be feasible to ascertain the extent
of
such damages with precision, if the Company fails to fulfill its obligations
under Section 2 hereof. Accordingly, if: (i) the Shelf Registration Statement
covering all the Transfer Restricted
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Securities
required to be covered thereby and required to be filed by the Company
pursuant
to this Agreement is (A) not filed with the SEC on or before the Filing
Deadline
(subject to any Suspension Period) or (B) not declared effective by the
SEC on
or before the Effectiveness Deadline (subject to any Suspension Period)
or (ii)
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
(including as a result of a Suspension Period) 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 (each
such
event referred to in clauses (i) through (ii), a "Registration
Delay Event");
the
Company shall pay to each Notice Holder (who is also a Record Holder) during
any
period in which a Registration Delay Event has occurred or is continuing,
a
payment (which payment shall be the sole and exclusive remedy available
to such
Notice Holder except for injunctive relief which may include an injunction
to
perform, or refrain from performing, any act contemplated hereunder or
to
accomplish any of the matters set forth herein) in an amount (the "Additional
Interest")
equal
to one third of a percent (0.33%) per 30 day period of such Registration
Delay
Event per $1,000 principal amount of Notes related to the Transfer Restricted
Securities subject to such Shelf Registration Statement for the period
during
which such Registration Delay Event has occurred and is continuing, it
being
understood that all calculations pursuant to this and the preceding sentence
shall be carried out to five decimal places. Following the cure of all
Registration Delay Events, Additional Interest will cease to accrue with
respect
to such Registration Delay Events. All accrued Additional Interest shall
be paid
by the Company on each Additional Interest Payment Date in cash to the
date of
such cure and Additional Interest will be calculated on the basis of a
360-day
year consisting of twelve 30-day months. Notwithstanding anything in the
Agreement to the contrary, Additional Interest shall only be payable to
Notice
Holders. Notwithstanding anything herein or in the Securities Purchase
Agreement
to the contrary, in no event shall the aggregate amount of Additional Interest
(other than Additional Interest payable pursuant to events that are within
the
control of the Company) exceed, in the aggregate, four percent (4%) of
(i) the
Purchase Price (as defined in the Securities Purchase Agreement) of the
Initial
Notes and (ii) the purchase price paid by Buyers for any Additional Notes
purchased, calculated pursuant to Section 1(d) of the Securities Purchase
Agreement. Notwithstanding anything herein or in the Securities Purchase
Agreement to the contrary, the Company shall not be obligated to pay Additional
Interest to an Investor under this Section 2(f) if (i) the Registration
Delay
Event pursuant to which such Additional Interest is due is caused by the
SEC
requiring such Investor to be named as an underwriter in a Registration
Statement, (ii) such Investor refuses to be named as an underwriter therein
and
(iii) the SEC's requirement for an Investor to be named as an underwriter
could
not be obviated, either by reducing the number of Registrable Securities
in such
Registration Statement or other reasonable actions by the Company.
g. All
of
the Company's obligations (including, without limitation, the obligation
to pay
Additional Interest) 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. Notwithstanding the foregoing, no Additional Interest
shall
accrue as to any Transfer Restricted Security from and after the earlier
of: (i)
the date such security is no longer a Transfer Restricted Security; and
(ii) the
expiration of the Shelf Registration Period.
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h. Immediately
upon the occurrence or the termination of a Registration Delay Event, the
Company shall give the Trustee, so long as the Notes remain outstanding,
notice
of such commencement or termination of the obligation to pay Additional
Interest
with regard to the Notes, and the amount thereof and of the nature of the
default giving rise to such commencement or the event giving rise to such
termination, as the case may be (such notice to be contained in an Officer's
Certificate (as such term is defined in the Indenture)), and prior to receipt
of
such Officer's Certificate the Trustee and the transfer and paying agent
shall
be entitled to assume that no such commencement or termination has occurred,
as
the case may be.
3. Registration
Procedures.
In
connection with any Shelf Registration Statement, the following provisions
shall
apply:
a. The
Company shall: (i) furnish to the Buyers, within a reasonable period of
time,
but in any event within five (5) Business Days, prior to the filing thereof
with
the SEC to afford the Buyers and their counsel a reasonable opportunity
for
review, a copy of each Shelf Registration Statement, and each amendment
thereof,
and a copy of each Prospectus, and each amendment or supplement thereto
(excluding amendments caused by the filing of a report under the 1934 Act),
and
shall reflect in each such document, when so filed with the SEC, such comments
as the Buyers may reasonably propose therein; and (ii) include information
regarding the Notice Holders and the methods of distribution they have
elected
for their Transfer Restricted Securities provided to the Company in Notice
and
Questionnaires as necessary to permit such distribution by the methods
specified
therein.
b. Subject
to Section 2(e), the Company 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
1933 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 the light of the circumstances under
which
they were made, not misleading; provided that the Company makes no
representation with respect to any Holder Information.
c. The
Company, as promptly as reasonably practicable (but in any event within
two
Business Days), shall notify the Buyers and each Notice Holder:
(i) when
any
Prospectus or any supplement thereto has been filed with the SEC and when
the
Shelf Registration Statement or any post-effective amendment thereto has
become
effective;
(ii) of
the
issuance by the SEC or any other federal or state governmental authority
of any
stop order suspending the effectiveness of the Shelf Registration
-11-
Statement
or of any order preventing or suspending the use of any Prospectus or the
initiation or threat of any proceedings for that purpose;
(iii) of
the
receipt by the Company of any notification with respect to the suspension
of the
qualification or exemption from 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 that purpose;
(iv) of
the
occurrence of, but not the nature of or details concerning, any event or
the
existence of any condition that requires the making of any changes in the
Shelf
Registration Statement or the Prospectus or any document incorporated by
reference therein so that, as of such date, the statements therein are
not
misleading and the Shelf Registration Statement or the Prospectus or any
document incorporated by reference therein, 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 the light of the circumstances under which they were
made)
not misleading;
(v) of
the
Company's determination that a post-effective amendment to the Shelf
Registration Statement is necessary (other than a post-effective amendment
pursuant to Section 2(c)(ii)); and
(vi) of
the
commencement (including as a result of any of the events or circumstances
described in paragraph (ii) above) and termination of any Suspension Period.
d. The
Company shall use its reasonable best efforts to obtain: (i) the withdrawal
of
any order suspending the effectiveness of any Shelf Registration Statement
and
the use of any related Prospectus; and (ii) 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 in which they
have
been qualified for sale, in each case at the earliest possible time, and
shall
provide notice to each Notice Holder and the Buyers of the withdrawal of
any
such orders or suspensions.
e. The
Company shall promptly furnish to the Buyers (and, upon written request
from any
Notice Holder to such Notice Holder), without charge, (i) at least one
copy of
any Shelf Registration Statement and any post-effective amendment thereto,
excluding all documents incorporated or deemed to be incorporated therein
by
reference and all exhibits thereto, (ii) copies of any correspondence from
the
SEC or the staff of the SEC to the Company or its representatives relating
to
any Shelf Registration Statement, (iii) promptly after the same is prepared
and
filed with the SEC, one copy of any Shelf Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor,
and
all exhibits and (iv) upon the effectiveness of any Shelf Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto.
f. The
Company shall, during the Shelf Registration Period, promptly deliver to
the
Buyers and each Notice Holder, without charge, as many copies of the
Prospectus
-12-
(including
each preliminary Prospectus) included in any Shelf Registration Statement,
and
any amendment or supplement thereto, as such person may reasonably request
and
except as provided in Sections 2(e) and 3(p) hereof; and the Company hereby
consents to the use of the Prospectus and any amendment or supplement thereto
by
each of the selling Holders in connection with the offering and sale of
the
Transfer Restricted Securities covered by the Prospectus or any amendment
or
supplement thereto.
g. The
Company shall submit to the SEC, within five (5) Business Days (subject
to any
Suspension Period pursuant to Section 2(e) hereof) after the Company learns
that
no review of a particular Shelf Registration Statement will be made by
the staff
of the SEC or that the staff has no further comments on a particular Shelf
Registration Statement, as the case may be, a request for acceleration
of
effectiveness of such Shelf Registration Statement to a time and date not
later
than 48 hours after the submission of such request.
h. Prior
to
any offering of Transfer Restricted Securities pursuant to any Shelf
Registration Statement, the Company 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 Company will not be required to:
(i)
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; (ii)
take
any action which would subject it to service of process or taxation in
excess of
a nominal dollar amount in any such jurisdiction where it is not then so
subject.
i. If
the
Transfer Restricted Securities are in certificated form, the Company 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, with
respect
of any Notes, in such denominations permitted by the Indenture and registered
in
such names as Holders may request at least two (2) Business Days prior
to
settlement of sales of Transfer Restricted Securities pursuant to such
Shelf
Registration Statement.
j. Subject
to the exceptions contained in (i) and (ii) of Section 3(h) above, the
Company
shall use its 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 Company shall provide
all
such information as may be required by 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.
-13-
k. Upon
the
occurrence of any event described in Section 3(c)(iv) or 3(c)(v) hereof,
the
Company shall promptly 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 material fact required to be stated
therein
or necessary in order to make the statements therein (in the case of the
Prospectus, in the 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 Company's obligations under this paragraph (k) shall
be
suspended if the Company has suspended the use of the Prospectus in accordance
with Section 2(e) hereof and given notice of such suspension to Notice
Holders,
it being understood that the Company's obligations under this Section 3(k)
shall
be automatically reinstated at the end of such Suspension Period.
l. The
Company shall provide, prior to the effective date of any Shelf Registration
Statement hereunder, a CUSIP number for the Transfer Restricted Securities
registered under such Shelf Registration Statement.
m. The
Company shall use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC and shall make generally available to
its
security holders an earnings statement satisfying the provisions of Section
11(a) of the 1933 Act and Rule 158 promulgated by the SEC thereunder (or
any
similar rule promulgated under the 0000 Xxx) for a 12-month period commencing
on
the first day of the first fiscal quarter of the Company commencing after
the
effective date of any Shelf Registration Statement or each post-effective
amendment to any Shelf Registration Statement, which such statements shall
be
made available no later than 45 days after the end of the 12-month period
or 90
days after the end of the 12-month period, if the 12-month period coincides
with
the fiscal year of the Company.
n. The
Company shall cause all Units issuable upon conversion of the Notes to
be
approved for listing on each securities exchange or quotation system on
which
the Units are then listed no later than the date the applicable Shelf
Registration Statement is declared effective and, shall cause all Units
to be so
listed when issued, and, in connection therewith, to make such filings
as may be
required under the 1934 Act and to have such filings declared effective
as and
when required thereunder.
o. If
reasonably requested in writing in connection with any disposition of Transfer
Restricted Securities pursuant to a Shelf Registration Statement, make
reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Transfer Restricted Securities
and
any broker-dealers, attorneys and accountants retained by such Notice Holders,
all relevant financial and other records, pertinent corporate documents
and
properties of the Company and its subsidiaries, and cause the appropriate
executive officers, directors and designated employees of the Company and
its
subsidiaries to make reasonably available for inspection during normal
business
hours all relevant information reasonably requested by such representative
for
the Notice Holders or any such broker-dealers, attorneys or
-14-
accountants
in connection with such disposition, in each case as is customary for similar
"due diligence" examinations; provided, however, that such Persons shall
enter
into a confidentiality agreement reasonably acceptable to the
Company.
p. 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)(vi), it 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(k)
hereof, or until such Notice Holder is advised in writing by the Company
that
the use of the Prospectus may be resumed or that the relevant Suspension
Period
has been terminated, as the case may be, provided that the foregoing shall
not
prevent the sale, transfer or other disposition of Transfer Restricted
Securities by a Holder in a transaction which is exempt from, or not subject
to,
the registration requirements of the 1933 Act, so long as such 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(q)
shall not prevent the occurrence of a Registration Delay Event or otherwise
limit the obligation of the Company to pay Additional Interest.
q. The
Company shall use its reasonable best efforts to take all other steps necessary
to effect the registration of the Transfer Restricted Securities covered
by the
Shelf Registration Statement contemplated hereby.
4. Registration
Expenses.
The
Company shall bear all fees and 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 the Legal Counsel
in an
amount not to exceed $10,000. Such fees and expenses shall include, without
limitation: (i) all registration and filing fees and expenses; (ii) all
fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing of Prospectuses
and
certificates for the Units to be issued upon conversion of the Notes) and
the
Company's expenses for messenger and delivery services and telephone; (iv)
all
fees and disbursements of counsel to the Company; (v) all application and
filing
fees in connection with listing (or authorizing for quotation) the Units
on a
national securities exchange or automated quotation system pursuant to
the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company. The Company shall bear its
internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal, accounting or other duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company. Notwithstanding the provisions
of this
Section 4, each Holder shall bear the expense of any broker's commission,
agency
fee and underwriter's discount or commission, if any, relating to the sale
or
disposition of such Holder's Transfer Restricted Securities pursuant to
a Shelf
Registration Statement.
-15-
5. Indemnification
and Contribution.
a. The
Company agrees to indemnify and hold harmless each Holder of Transfer Restricted
Securities covered by any Shelf Registration Statement, its directors,
officers,
partners, members and employees and each Person, if any, who controls any
such
Holder within the meaning of either the 1933 Act or the 1934 Act (collectively
referred to for purposes of this Section 5 as a "Holder")
against any losses, claims, damages or liabilities, joint or several, or
actions
in respect thereof, to which any of them may become subject, under the
1933 Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Shelf Registration Statement, or in
any
Prospectus, or 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
necessary to make the statements therein (in the case of any Prospectus,
in the
light of the circumstances under which they were made) not misleading,
and will
reimburse each such party for any legal or other expenses reasonably incurred
by
such party in connection with investigating or defending any such action
or
claim as such expenses are incurred; provided, however, that: (i) the Company
shall not be liable in any such case to the extent that any such loss,
claim,
damage or liability arises out of or is based upon Holder Information;
(ii) such
indemnity agreement shall not apply to any portion of any such loss, claim,
damage, or liability to the extent it has resulted from the gross negligence
or
willful misconduct of such Holder; and (iii) with respect to any untrue
statement or omission of material fact made in any Shelf Registration Statement,
or in any Prospectus, the indemnity agreement contained in this Section
5(a)
shall not inure to the benefit of a Holder from whom the Person asserting
any
such loss, claim, damage or liability purchased the securities concerned,
to the
extent that any such loss, claim, damage or liability of such Holder occurs
under the circumstance where it shall have been established that: (w) the
Company had previously furnished copies of the Prospectus, and any amendments
and supplements thereto, to such Holder; (x) delivery of the Prospectus,
and any
amendment or supplements thereto, was required by the 1933 Act to be made
by
such Holder; (y) the untrue statement or omission of a material fact contained
in the Prospectus was corrected in amendments or supplements thereto; and
(z)
there was not sent or given by such Holder, at or prior to the written
confirmation of the sale of such securities, a copy of such amendments
or
supplements to the Prospectus. This indemnity agreement will be in addition
to
any liability that the Company may otherwise have. This indemnity agreement
will
not apply to any loss, damage, expense, liability or claim arising from
an offer
or sale, occurring during a Suspension Period, of Transfer Restricted Securities
by a Notice Holder who has previously received notice from the Company
of the
commencement of the Suspension Period pursuant to Section 3(c)(vi).
b. Each
Holder, severally and not jointly, agrees to indemnify and hold harmless
the
Company, each of its directors, officers, partners, members, employees
and each
Person, if any, who controls the Company within the meaning of either the
1933
Act or the 1934 Act, to the same extent as the foregoing indemnity from
the
Company to the Holders and agrees to reimburse each such indemnified party,
as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any loss, claim, damage, liability
or
action, but only with reference to Holder Information supplied by such
Holder.
In no event shall any Holder, its directors, officers, partners, members
or
employees or any Person, if any, who controls such Holder be liable or
responsible for any amount in excess of the net proceeds to such Holder
as a
result of the sale of Transfer Restricted Securities pursuant to such
Shelf
-16-
Registration
Statement. This indemnity agreement will be in addition to any liability
that
such Holder may otherwise have.
c. Promptly
after receipt by an indemnified party under this Section 5 of notice of
any
claim or the commencement of any action or proceeding (including any
governmental investigation), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against the indemnifying
party
under Section 5(a) or 5(b) hereof, notify the indemnifying party in writing
of
the commencement thereof; but the omission so to notify the indemnifying
party
will not relieve it from any liability which it may have to any indemnified
party to the extent it is not materially prejudiced as a result thereof
and in
any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In case any such action or
proceeding is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be
entitled to participate therein (jointly with any other indemnifying party
similarly notified), and to the extent that it may elect, by written notice,
delivered to such indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with
counsel
reasonably satisfactory to such indemnified party; provided, however, that
if
the defendants (including any impleaded parties) in 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, the indemnified party or parties shall
have
the right to select separate counsel to defend such action on behalf of
such
indemnified party or parties. Upon receipt of notice from the indemnifying
party
to such indemnified party of its election so to appoint counsel to defend
such
action and approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section 5
for any
legal or other expenses subsequently incurred by such indemnified party
in
connection with the defense thereof unless: (i) the indemnified party shall
have
employed separate counsel in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall
not be
liable for the expense of more than one separate counsel (in addition to
any
local counsel), approved by the Holders in the case of paragraph (a) of
this
Section 5, representing the indemnified parties under such paragraph (a)
who are
parties to such action); (ii) 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 or commencement
of the
action; (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; or
(iv) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest. An indemnifying
party will not, without the prior written consent of the indemnified 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
the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional
release
of each indemnified party from all liability arising out of such claim,
action,
suit or proceeding. Subject to the provisions of the immediately following
sentence, no indemnifying party shall be liable for any settlement, compromise
or the consent to the entry of judgment in connection with any such action
effected without its written consent (which consent shall not be unreasonably
withheld or delayed), but if settled with its written consent or if there
be a
final judgment for the
-17-
plaintiff
in any such action other than a judgment entered with the consent of such
indemnified party, the indemnifying party agrees to indemnify and hold
harmless
any indemnified party from and against any loss or liability by reason
of such
settlement or judgment.
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, each indemnifying party agrees 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")
to
which the indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company from the sale
of the
Notes, on the one hand, and a Holder with respect to the sale by such Holder
of
Transfer Restricted Securities, on the other hand; provided, however, that
in no
case shall an indemnifying party that is a Holder be responsible for any
amount
in excess of the total price at which the Transfer Restricted Securities
are
sold by such Holder to a purchaser. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company
and
such Holder shall contribute in such proportion as is appropriate to reflect
not
only such relative benefits but also the relative fault of the Company
on the
one hand and of such Holder on the other in connection with the statements
or
omissions which resulted in such Losses, as well as any other relevant
equitable
considerations. The relative benefits received by the Company on the one
hand
and such Holder on the other shall be deemed to be in the same respective
proportions as the total net proceeds from the sale of the Notes (before
deducting expenses) received by or on behalf of the Company, on the one
hand,
and the total proceeds received by such Holder with respect to its sale
of
Transfer Restricted Securities under the Shelf Registration Statement,
on the
other hand, bear to the total gross proceeds from the sale of the Notes.
Relative fault shall be determined by reference to, among other things,
whether
any untrue or any alleged untrue statement of a material fact or the omission
or
alleged omission to state a material fact relates to information provided
by the
Company on the one hand or relates to Holder Information supplied by such
Holder, on the other, the intent of the parties and their relative knowledge,
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 pursuant to this paragraph (d) were determined by pro rata
allocation or any other method of allocation that does not take account
of the
equitable considerations referred to above. Notwithstanding the provisions
of
this paragraph (d), no Person guilty of fraudulent misrepresentation (within
the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from
any Person who was not guilty of such fraudulent misrepresentation. For
purposes
of this Section 5(d), each Person who controls a Holder within the meaning
of
either the 1933 Act or the 1934 Act shall have the same rights to contribution
as such Holder, and each Person who controls the Company within the meaning
of
either the 1933 Act or the 1934 Act shall have the same rights to contribution
as the Company, 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 or
the
Company 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.
-18-
f. Rules
144 and 144A.
The
Company covenants that it shall use its reasonable best efforts to file
the
reports required to be filed by it under the 1933 Act and the 1934 Act
in a
timely manner so long as the Transfer Restricted Securities remain outstanding.
If at any time the Company is not required to file such reports, it will,
upon
request of any Holder or beneficial owner of Transfer Restricted Securities,
make available the information specified in Rule 144A(d)(4). The Company
further
covenants that, for as long as any Transfer Restricted Securities remain
outstanding, it will take such further action as any Holder of Transfer
Restricted Securities may reasonably request, all to the extent required
from
time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the 1933 Act within the limitation of the exemptions
provided by Rule 144 and Rule 144A. Upon the written request of any Holder
of
Transfer Restricted Securities, the Company shall deliver to such Holder
a
written statement as to whether it has complied with such
requirements.
6. Miscellaneous.
a. No
Inconsistent Agreements.
The
Company has not, 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. In addition, the Company shall not
grant
to any of its Noteholders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities
in the
Shelf Registration Statement provided for in this Agreement other than
the
Transfer Restricted Securities.
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 be given, unless the Company
consents in writing and the Company has obtained the written consent of
at least
the Majority Holders. Notwithstanding the foregoing, 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.
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
Buyers, initially at their address set forth in the Securities 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 Units (provided that
while
the Notes or the Units 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
forth in its Notice and Questionnaire;
(iii) if
to the
Company, to:
-19-
American
Real Estate Partners, L.P.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone:
(000)
000-0000
Facsimile:
(000)
000-0000
Email:
xxxxxxx@xxxx.xxx
Attention:
Xxxxxxx
Xxxxxx
With
a
copy to:
Proskauer
Rose LLP
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Email:
xxxxxxxxxxxx@xxxxxxxxx.xxx
Attention:
Xxx X. Xxxxxxxxxxx
(iv) if
to
Legal Counsel, to:
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone:
(000)
000-0000
Facsimile:
(000)
000-0000
Email:
xxxxxxx.xxxxx@xxx.xxx
Attention:
Xxxxxxx
X. Xxxxx, Esq.
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
Buyers or the Company 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 thereto, subsequent Holders. The
Company hereby agrees to extend the benefits of this Agreement to any Holder
and
any such Holder 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 under the Indenture, then such successor shall enter into an
agreement, in form and substance reasonably satisfactory to the Buyers,
whereby
such successor shall assume all of the Company's obligations under this
Agreement.
-20-
e. Counterparts.
This
Agreement 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.
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.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that
would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein,
and
hereby irrevocably waives, and agrees not to assert in any suit, action
or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding
is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding
by
mailing a copy thereof to such party at the address for such notices to
it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be
deemed
to limit in any way any right to serve process in any manner permitted
by law.
If any provision of this Agreement shall be invalid or unenforceable in
any
jurisdiction, such invalidity or unenforceability shall not affect the
validity
or enforceability of the remainder of this Agreement in that jurisdiction
or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
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. Notes
Held by the Company, Etc.
Whenever the consent or approval of Holders of a specified percentage of
principal amount of Notes or the Units issuable upon conversion thereof
is
required hereunder, Notes or the Units issued upon conversion thereof held
by
the Company or its Affiliates (other than subsequent Holders of Notes or
the
Units issued upon conversion thereof if such subsequent Holders are deemed
to be
Affiliates solely by reason of their holdings of such Notes) shall not
be
counted in determining whether such consent or approval was given by the
Holders
of such required percentage.
-21-
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(f), 4 or 5.
k. Independent
Nature of Buyers' Obligations and Rights.
The
obligations of each Buyer under any Transaction Document are several and
not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under
any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto,
shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers
are
in any way acting in concert or as a group with respect to such obligations
or
the transactions contemplated by the Transaction Documents. Each Buyer
confirms
that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Except
to
the extent otherwise provided in the Transaction Documents, each Buyer
shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer
to be
joined as an additional party in any proceeding for such purpose.
-22-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first
written
above.
|
COMPANY:
|
|
|
AMERICAN
REAL ESTATE PARTNERS, L.P.
|
|
|
By:
American Property Investors, Inc.,
its
general partner
|
|
|
By:
__________________________________
Name:
Title:
|
|
-23-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first
written
above.
|
BUYERS:
|
|
|
PORTSIDE
GROWTH AND OPPORTUNITY FUND
|
|
|
By:
__________________________________
Name:
Title:
|
|
-24-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first
written
above.
|
BUYERS:
|
|
|
HIGHBRIDGE
INTERNATIONAL LLC
|
|
|
By:
HIGHBRIDGE CAPITAL MANAGEMENT, LLC
|
|
|
By:
__________________________________
Name:
Xxxx X. Chill
Title:
Managing Director
|
|
-25-
EXHIBIT
A
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 Transfer Restricted Securities Listed in Item 3 below are
held:
|
|
(c)
|
Full
Legal Name of DTC participant (if applicable and if not the same
as (b)
above) through which Transfer Restricted Securities listed in
Item 3 below
are held:
|
|
2.
|
Address
for Notices to Selling
Securityholder:
|
Telephone:
Fax:
Contact
Person:
|
3.
|
Beneficial
Ownership of Transfer Restricted
Securities:
|
|
(a)
|
Type
and Principal Amount of Transfer Restricted Securities beneficially
owned:
|
|
(b)
|
CUSIP
No(s). of such Transfer Restricted Securities beneficially
owned:
|
A-1
| 4. |
Beneficial
Ownership of Other Securities of the Company 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 Transfer
Restricted 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.
|
Relationships
with the Company:
|
Except
as set forth below, neither the undersigned nor any of its affiliates,
officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) 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. |
Broker-Dealers
and their Affiliates
|
| (a) |
Is
the Selling Securityholder a broker-dealer or an affiliate of
a
broker-dealer:
|
Yes
____ No
____
If
so,
please answer the remaining question in this section.
(i) Please
advise whether the Notes or any Transfer Restricted Securities were received
by
the Selling Securityholder as compensation for investment banking services
or as
investment shares, and if so please describe the circumstances.
Note
that in general we may be required to identify any registered broker-dealer
as
an underwriter
in the prospectus.
A-2
(ii) Except
as
set forth below, if the Selling Securityholder is a registered
broker- dealer,
the Selling Securityholder does not plan to make a market in the Transfer
Restricted
Securities. If the Selling Securityholder plans to make a market in the
Transfer
Restricted Securities, please indicate whether the Selling Securityholder
plans
to use
the
prospectus relating to the Transfer Restricted Securities as a market-making
prospectus.
| (b) |
Affiliation
with Broker-Dealers
|
Is
the
Selling Securityholder an affiliate1
of
a
registered broker-dealer?
Yes
____ No
____
If
so,
please answer the remaining question in this section.
| (i) |
Please
describe the affiliation between the Selling Securityholder and
any
registered
broker-dealer.
|
|
(ii)
|
If
the Notes or any Transfer Restricted Securities were purchased
by the
Selling Securityholder other than in the ordinary course of business,
please describe the circumstances.
|
|
(iii)
|
Please
advise whether the Notes or any Transfer Restricted Securities
were
received by the Selling Securityholder as compensation for investment
banking services or as investment shares, and if so please describe
the
circumstances.
|
(iv) If
the
Selling Securityholder, at the time of its purchase of Transfer Restricted
Securities, had any agreements or understandings, directly or indirectly,
with
any person to distribute the Transfer Restricted Securities, please describe
such agreements or undertakings.
Note
that if the Selling Securityholder is an affiliate of a broker-dealer and
did
not purchase its Notes
or
any Transfer Restricted Securities
in
the ordinary course of business or at the time of the purchase had any
agreements or understandings, directly or indirectly, to distribute the
securities, we may be required to identify the Selling Securityholder as
an
underwriter in the prospectus.
| (c) |
Beneficial
Ownership by Natural Persons:
|
Is
the
Selling Securityholder is an entity, does any natural person having voting
or
investing
power over the Transfer Restricted Securities held by the Selling
Securityholder?2
| 1 |
An
"affiliate" of a specified person or entity means a person
or entity that
directly, or indirectly through one or more intermediaries,
controls or is
controlled by, or is under common control with, the person
or entity
specified.
|
A-3
If
so,
please state the person's or persons' name(s):
| 7. |
Beneficial
Ownership by Natural Persons or by a Board or
Committee
|
Is
the
Selling Securityholder a reporting entity with the Securities and Exchange
Commission?
If
the
Selling Securityholder is a majority owned subsidiary of a reporting entity,
identify the
majority securityholder that is a reporting entity.
Yes
____ No
____
If
No,
please answer the remaining questions in this section.
| (i) |
Please
name the natural person or person(s) having voting and/or investment
control
over the Selling Securityholder.3
|
| (ii) |
If
the voting and/or investment control over the Selling Securityholder
is
held by board
or committee, please state the name of the natural person or
person(s) on
such
board or committee.
|
|
8.
|
Plan
of Distribution:
|
Except
as set forth below, the undersigned (including its donees or pledgees)
intends
to distribute the Transfer Restricted Securities listed above in Item 3
pursuant
to the Shelf Registration Statement only as follows (if at all): Such Transfer
Restricted Securities may be sold from time to time directly by the undersigned
or, alternatively, through underwriters, broker-dealers or agents. If the
Transfer Restricted Securities are sold through underwriters, broker-dealers
or
agents, the Selling Securityholder will be responsible for underwriting
discounts or commissions or agents' commissions. Such Transfer Restricted
Securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined
at
the time of sale or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,
| 2 |
Please
answer "Yes" if any natural person, directly or indirectly,
through any
contract, arrangement, understanding, relationship, or otherwise
has or
shares: (a) voting power which includes the power to vote,
or to direct
the voting of, such security; and/or, (b) investment power
which includes
the power to dispose, or to direct the disposition of, the
Transfer
Restricted Securities held by the Selling
Securityholder.
|
|
3
|
Please
include any natural person that, directly or indirectly,
through any
contract, arrangement, understanding, relationship, or otherwise
has or
shares: (a) voting power which includes the power to vote,
or to direct
the voting of, such security; and/or, (b) investment power
which includes
the power to dispose, or to direct the disposition of, the
Transfer
Restricted Securities held by the Selling
Securityholder.
|
A-4
· on
any national securities exchange or quotation service on which the securities
may be listed or quoted at the time of sale;
· in
the over-the-counter market;
· in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
· through
the writing of options, whether such options are listed on an options exchange
or otherwise;
· in
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
· in
block trades in which the broker-dealer will attempt to sell the units
as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;
· in
purchases by a broker-dealer as principal and resale by the broker-dealer
for
its account;
· in
an
exchange distribution in accordance with the rules of the applicable
exchange;
· in
privately negotiated transactions;
· in
short sales;
· in
sales pursuant to Rule 144;
· in
which broker-dealers may agree with the selling securityholders to sell
a
specified number of such units at a stipulated price per unit;
· in
a
combination of any such methods of sale; and
· in
any other method permitted pursuant to applicable law.
State
any
exceptions here:
Note:
In no
event will such method(s) of distribution take the form of an underwritten
offering of the Transfer Restricted Securities without the prior written
agreement of the Company.
A-5
The
undersigned acknowledges its obligation to comply with the provisions of
the
1934 Act and the rules thereunder relating to security manipulation,
particularly Regulation M thereunder (or any successor rules or regulations),
in
connection with any offering of Transfer Restricted Securities pursuant
to the
Registration Rights Agreement. 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
as
set forth therein.
Pursuant
to the Registration Rights Agreement, the Company has agreed under certain
circumstances to indemnify the Selling Securityholder against certain
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 by hand delivery, first class mail or air courier guaranteeing
overnight delivery to the address set forth below.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 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
in connection with the preparation or amendment of the Shelf Registration
Statement and the related prospectus.
Once
this
Notice and Questionnaire is executed by the Selling Securityholder and
received
by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives and assigns of the Company and the Selling
Securityholder with respect to the Transfer Restricted Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above. This
Agreement shall be governed in all respects by the laws of the State of
New
York.
A-6
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice
and Questionnaire to be executed and delivered either in person or by its
duly
authorized agent.
Dated:
_____________________________
Beneficial
Owner: ________________________________
By:
___________________________________________
Name:
_________________________________________
Title:
__________________________________________
PLEASE
RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE
TO AMERICAN REAL ESTATE PARTNERS, LP
American
Real Estate Partners, LP
000
Xxxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
General Counsel
A-7
EXHIBIT
B
SELLING
SECURITYHOLDERS
The
Units
being offered by the selling securityholders are issuable upon conversion
of the
convertible notes. For additional information regarding the issuance of
those
convertible notes, see "Private Placement of Convertible Notes" above.
We are
registering the Units in order to permit the selling securityholders to
offer
the units for resale from time to time. Except for the ownership of the
convertible notes issued pursuant to the Securities Purchase Agreement,
the
selling securityholders have not had any material relationship with us
within
the past three years.
The
table
below lists the selling securityholders and other information regarding
the
beneficial ownership of the Units by each of the selling securityholders.
The
second column lists the number of Units beneficially owned by each selling
securityholder, based on its ownership of the convertible notes, as of
________,
200_, assuming conversion of all convertible notes held by the selling
securityholders on that date, without regard to any limitations on
conversions.
The
third
column lists the Units being offered by this prospectus by each selling
securityholder.
In
accordance with the terms of a registration rights agreement among the
Company
and the selling securityholders, this prospectus generally covers the resale
of
the notes and the number of Units issued or issuable upon conversion of
the
convertible notes as of the trading day immediately preceding the date
the
registration statement is initially filed with the SEC.
Because
the conversion price of the convertible notes may be adjusted, the number
of
units that will actually be issued may be more or less than the number
of units
being offered by this prospectus. The fourth column assumes the sale of
all of
the units offered by the selling securityholders pursuant to this
prospectus.
Under
the
terms of the convertible notes, a selling securityholder may not convert
the
convertible notes to the extent such conversion would cause such selling
securityholder, together with its affiliates, to beneficially own a number
of
Units which would exceed 2.49% of our then outstanding Units following
such
conversion, excluding for purposes of such determination Units issuable
upon
conversion of the convertible notes which have not been converted. The
number of
units in the second column does not reflect this limitation. The selling
securityholders may sell all, some or none of their units in this offering.
See
"Plan of Distribution."
B-1
|
Name
of Selling Securityholder
|
Number
of Units Owned
Prior
to Offering
|
Maximum
Number of Units to be Sold Pursuant to this
Prospectus
|
Number
of Units Owned
After
Offering
|
|||
|
Portside
Growth & Opportunity Fund (1)
|
0
|
|||||
|
Highbridge
International LLC (2)
|
(1) Ramius
Capital Group, LLC ("Ramius Capital") is the investment adviser of Portside
Growth and Opportunity Fund ("Portside") and consequently has voting control
and
investment discretion over securities held by Portside. Ramius Capital
disclaims
beneficial ownership of the units held by Portside. Xxxxx X. Xxxxx, Xxxxxx
X.
Xxxxx, Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx are the sole managing members
of
C4S& Co., LLC, the sole managing member of Ramius Capital. As a result,
Messrs. Cohen, Stark, Xxxxxxx and Solomon may be considered beneficial
owners of
any units deemed to be beneficially owned by Ramius Capital. Messrs. Cohen,
Stark, Xxxxxxx and Xxxxxxx disclaim beneficial ownership of these
units.
(2) Highbridge
Capital Management, LLC is the trading manager of Highbridge International
LLC
and has voting control and investment discretion over the securities held
by
Highbridge International LLC. Xxxxx Xxxxx and Xxxxx Xxxxxx control Highbridge
Capital Management, LLC and have voting control and investment discretion
over
the securities held by Highbridge International LLC. Each of Highbridge
Capital
Management, LLC, Xxxxx Xxxxx and Xxxxx Xxxxxx disclaims beneficial ownership
of
the securities held by Highbridge International LLC.
B-2
PLAN
OF DISTRIBUTION
We
are
registering the Units issuable upon conversion of the convertible notes
to
permit the resale of these Units by the holders of the convertible notes
from
time to time after the date of this prospectus. We will not receive any
of the
proceeds from the sale by the selling securityholders of the Units. We
will bear
all fees and expenses incident to our obligation to register the
Units.
The
selling securityholders may sell all or a portion of the Units beneficially
owned by them and offered hereby from time to time directly or through
one or
more underwriters, broker-dealers or agents. If the Units are sold through
underwriters or broker-dealers, the selling securityholders will be responsible
for underwriting discounts or commissions or agent's commissions. The Units
may
be sold in one or more transactions at fixed prices, at prevailing market
prices
at the time of the sale, at varying prices determined at the time of sale,
or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions,
| · |
on
any national securities exchange or quotation service on which
the
securities may be listed or quoted at the time of
sale;
|
| · |
in
the over-the-counter market;
|
| · |
in
transactions otherwise than on these exchanges or systems or
in the
over-the-counter market;
|
| · |
through
the writing of options, whether such options are listed on an
options
exchange or otherwise;
|
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| · |
block
trades in which the broker-dealer will attempt to sell the units
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 the broker-dealer
for its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
short
sales;
|
| · |
sales
pursuant to Rule 144;
|
| · |
broker-dealers
may agree with the selling securityholders to sell a specified
number of
such units at a stipulated price per
unit;
|
B-3
| · |
a
combination of any such methods of sale;
and
|
| · |
any
other method permitted pursuant to applicable
law.
|
If
the
selling securityholders effect such transactions by selling Units to or
through
underwriters, broker-dealers or agents, such underwriters, broker-dealers
or
agents may receive commissions in the form of discounts, concessions or
commissions from the selling securityholders or commissions from purchasers
of
the Units for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters,
broker-dealers or agents may be in excess of those customary in the types
of
transactions involved). In connection with sales of the Units or otherwise,
the
selling securityholders may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the Units in the course of hedging
in
positions they assume. The selling securityholders may also sell Units
short and
deliver Units covered by this prospectus to close out short positions and
to
return borrowed units in connection with such short sales. The selling
securityholders may also loan or pledge Units to broker-dealers that in
turn may
sell such units.
The
selling securityholders may pledge or grant a security interest in some
or all
of the Units owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell
the
Units from time to time pursuant to this prospectus or any amendment to
this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933, as amended, amending, if necessary, the list of selling
securityholders to include the pledgee, transferee or other successors
in
interest as selling securityholders under this prospectus. The selling
securityholders also may transfer and donate the Units in other circumstances
in
which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this
prospectus.
The
selling securityholders and any broker-dealer participating in the distribution
of the Units may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions
allowed
to, any such broker-dealer may be deemed to be underwriting commissions
or
discounts under the Securities Act. At the time a particular offering of
the
Units is made, a prospectus supplement, if required, will be distributed
which
will set forth the aggregate amount of Units being offered and the terms
of the
offering, including the name or names of any broker-dealers or agents,
any
discounts, commissions and other terms constituting compensation from the
selling securityholders and any discounts, commissions or concessions allowed
or
reallowed or paid to broker-dealers.
Under
the
securities laws of some states, the Units may be sold in such states only
through registered or licensed brokers or dealers. In addition, in some
states
the Units may not be sold unless such units have been registered or qualified
for sale in such state or an exemption from registration or qualification
is
available and is complied with.
There
can
be no assurance that any selling securityholder will sell any or all of
the
Units registered pursuant to the registration statement, of which this
prospectus forms a part.
B-4
The
selling securityholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act
of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing
of
purchases and sales of any of the Units by the selling securityholders
and any
other participating person. Regulation M may also restrict the ability
of any
person engaged in the distribution of the Units to engage in market-making
activities with respect to the Units. All of the foregoing may affect the
marketability of the Units and the ability of any person or entity to engage
in
market-making activities with respect to the Units.
We
will
pay all expenses of the registration of the Units pursuant to the registration
rights agreement, estimated to be $[ ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance
with
state securities or "blue sky" laws; provided, however, that a selling
securityholder will pay all underwriting discounts and selling commissions,
if
any. We will indemnify the selling securityholders against liabilities,
including some liabilities under the Securities Act, in accordance with
the
registration rights agreements, or the selling securityholders will be
entitled
to contribution. We may be indemnified by the selling securityholders against
civil liabilities, including liabilities under the Securities Act, that
may
arise from any written information furnished to us by the selling securityholder
specifically for use in this prospectus, in accordance with the related
registration rights agreement, or we may be entitled to
contribution.
Once
sold
under the registration statement, of which this prospectus forms a part,
the
Units will be freely tradable in the hands of persons other than our
affiliates.
B-5
