EXHIBIT 10.30
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
AMONG
MAGNA ENTERTAINMENT CORP.
AND
BMO XXXXXXX XXXXX CORP.
AND
CIBC WORLD MARKETS CORP.
DATED AS OF DECEMBER 2, 2002
REGISTRATION RIGHTS AGREEMENT dated as of December 2, 2002, between
Magna Entertainment Corp., a Delaware corporation (together with any successor
entity, herein referred to as the "COMPANY"), and BMO Xxxxxxx Xxxxx Corp. and
CIBC World Markets Corp. (together, the "INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement dated
November 18, 2002, among the Company and the Initial Purchasers (the "PURCHASE
AGREEMENT"). The Initial Purchasers have agreed to purchase from the Company
$75,000,000 in aggregate principal amount of the Company's 7 1/4% Convertible
Subordinated Notes due December 15, 2009 (the "NOTES"). The Notes will be
convertible into fully paid, nonassessable shares of the Company's Class A
Subordinate Voting Stock, par value $0.01 per share (the "CLASS A SUBORDINATE
VOTING STOCK"), on the terms, and subject to the conditions, set forth in the
Indenture (as defined herein). To induce the Initial Purchasers to purchase the
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement pursuant to Section 6(o) of the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized
terms shall have the following meanings:
ACTION: As defined in Section 6(c) hereof.
ADDITIONAL INTEREST: As defined in Section 3(a) hereof.
ADVICE: As defined in Section 4(c)(ii) hereof.
AFFILIATE: As such term is defined in Rule 405 under the Securities
Act.
AGREEMENT: This Registration Rights Agreement.
BLUE SKY APPLICATION: As defined in Section 6(a) hereof.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: A day other than a Saturday or Sunday or any federal
holiday in the United States or any holiday in the Province of Ontario, Canada.
CLASS A SUBORDINATE VOTING STOCK: As defined in the preamble hereto.
CLOSING DATE: The date of this Agreement.
COMMISSION: The Securities and Exchange Commission.
COMPANY: As defined in the preamble hereto.
EFFECTIVENESS PERIOD: As defined in Section 2(a)(iii) hereof.
EFFECTIVENESS TARGET DATE: As defined in Section 2(a)(ii) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
FILING DEADLINE: As defined in Section 2(a)(i) hereof.
HOLDER: A Person who owns, beneficially or of record, Transfer
Restricted Securities.
INDEMNIFIED HOLDER: As defined in Section 6(a) hereof.
INDENTURE: The Indenture dated as of December 2, 2002, among the
Company and The Bank of New York, as trustee (the "TRUSTEE"), pursuant to which
the Notes are to be issued, as such Indenture is amended, modified or
supplemented from time to time in accordance with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereto.
INTEREST PAYMENT DATE: As defined in the Indenture. For purposes of
this Agreement, if no Notes are outstanding, "Interest Payment Date" shall mean
each June 15th and December 15th.
MAJORITY OF HOLDERS: Holders holding more than 50% in aggregate
principal amount of the Notes outstanding at the time of determination;
PROVIDED, HOWEVER, that, for purposes of this definition, a holder of shares of
Class A Subordinate Voting Stock that constitute Transfer Restricted Securities
that were previously issued upon conversion of Notes shall be deemed to hold an
aggregate principal amount of Notes (in addition to the principal amount of
Notes held by such holder) equal to the product of (x) the number of such shares
of Class A Subordinate Voting Stock held by such holder and (y) the conversion
price, at the time such Notes were converted, as determined in accordance with
Article 4 of the Indenture.
NASD: National Association of Securities Dealers, Inc.
NOTES: As defined in the preamble hereto.
NOTICE AND QUESTIONNAIRE: The Selling Securityholder Notice and
Questionnaire in substantially the form attached as EXHIBIT A hereto.
PAYING AGENT: As defined in the Indenture.
PERSON: An individual, partnership, limited liability company,
corporation, unincorporated organization, trust, joint venture or a government
or agency or political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
PURCHASE AGREEMENT: As defined in the preamble hereto.
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RECORD HOLDER: With respect to any Interest Payment Date, each Person
who is a Holder on the record date with respect to such Interest Payment Date.
In the case of a Holder of shares of Class A Subordinate Voting Stock issued
upon conversion of the Notes, "Record Holder" shall mean each Person who is a
Holder of shares of Class A Subordinate Voting Stock that constitute Transfer
Restricted Securities on the June 1st or December 1st immediately preceding such
Interest Payment Date.
REGISTRATION DEFAULT: As defined in Section 3(a) hereof.
REGISTRATION STATEMENT: As defined in Section 2(a)(i) hereof.
RULE 144: Rule 144 promulgated under the Securities Act.
RULE 144A: Rule 144A promulgated under the Securities Act.
SECURITIES ACT: The Securities Act of 1933, as amended.
SUSPENSION PERIOD. As defined in Section 4(b)(i) hereof.
TIA: The Trust Indenture Act of 1939, as amended to date, and as in
effect on the date the Indenture is qualified under the TIA.
TRANSFER RESTRICTED SECURITIES: Each Note and each share of Class A
Subordinate Voting Stock issued upon conversion of Notes until the earliest to
occur of:
(i) the date on which such Note or such share of Class A Subordinate
Voting Stock issued upon conversion thereof has been effectively registered for
resale under the Securities Act and disposed of in accordance with the
Registration Statement;
(ii) the date on which such Note or such share of Class A Subordinate
Voting Stock issued upon conversion thereof (A) has been transferred in
compliance with Rule 144 or (B) may be sold or transferred pursuant to Rule 144
without regard to the volume limitations thereof (or any other similar provision
then in force); and
(iii) the date on which such Note or such share of Class A Subordinate
Voting Stock issued upon conversion thereof ceases to be outstanding (whether as
a result of redemption, repurchase and cancellation, conversion or otherwise).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. REGISTRATION.
(a) The Company shall:
(i) not later than 60 days after the Closing Date (the "FILING
DEADLINE"), cause a registration statement to be filed pursuant to
Rule 415 under the Securities Act (the "REGISTRATION STATEMENT"),
which Registration Statement
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shall provide for resales of all Transfer Restricted Securities held
by Holders that have provided the information required pursuant to the
terms of Section 2(b) hereof;
(ii) use commercially reasonable efforts to cause the
Registration Statement to be declared effective by the Commission as
promptly as is practicable, but in no event later than 120 days after
the Closing Date (the "EFFECTIVENESS TARGET DATE"); and
(iii) use commercially reasonable efforts to keep the
Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 4(b) hereof to the
extent necessary to ensure that: (A) it is available for resales by
the Holders of Transfer Restricted Securities entitled to the benefit
of this Agreement and (B) conforms with the requirements of this
Agreement and the Securities Act and the rules and regulations of the
Commission promulgated thereunder as announced from time to time, for
a period (the "EFFECTIVENESS PERIOD") of:
(1) two years from the date of this Agreement; or
(2) such shorter period that will terminate on the
first date that none of the Notes or the shares of Class
A Subordinate Voting Stock issued on conversion of the
Notes are Transfer Restricted Securities;
PROVIDED that, for greater certainty, the Company shall not be obligated to file
a prospectus with the securities commission or similar regulatory authority in
any of the provinces or territories of Canada.
(b) The Company shall, at least 12 Business Days prior to the date on
which the Registration Statement becomes effective, provide written notice to
each Holder (which notice shall be accompanied by a copy of a Notice and
Questionnaire to be completed by such Holder) that the Company has filed the
Registration Statement pursuant to this Agreement and that the Holder must
complete and return the enclosed Notice and Questionnaire in accordance with
this Section 2(b) in order to be named as a selling securityholder in the
Registration Statement and Prospectus. Each Holder agrees that if such Holder
wishes to sell Transfer Restricted Securities pursuant to the Registration
Statement and Prospectus, it will deliver a Notice and Questionnaire as promptly
as practicable upon receipt of such notice from the Company but in no event
later than the second Business Day immediately preceding the date on which the
Registration Statement is declared effective by the Commission. Any Holder that
does not complete a Notice and Questionnaire and deliver it to the Company as
required above shall not be named as a selling securityholder in the
Registration Statement or the Prospectus; PROVIDED, HOWEVER, that if a Holder
does not receive written notice directly from the Company as required by this
Section 2(b) within the time period required by this Section 2(b), then, if any
such Holder furnishes a Notice and Questionnaire to the Company at least five
(5) Business Days prior to any intended distribution of Transfer Restricted
Securities under the Registration Statement, such Holder shall be named in the
Registration Statement and the related Prospectus as a selling securityholder by
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way of a post-effective amendment to the Registration Statement and a supplement
to the Prospectus to be filed in accordance with the provisions of this Section
2(b) below. The Company shall include in the Registration Statement at the time
it is first declared effective, the name of each Holder that provided a Notice
and Questionnaire to the Company in accordance with this Section 2(b), and from
and after the date the Registration Statement is initially declared effective,
the Company shall use commercially reasonable efforts to file with the
Commission, as promptly as practicable after the date a Notice and Questionnaire
is delivered to the Company, if required by this Section 2(b) or by applicable
law, a post-effective amendment to the Registration Statement or prepare and, if
required by this Section 2(b) or by applicable law, file a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other document required under the Securities
Act so that the Holder delivering such Notice and Questionnaire is named as a
selling securityholder in the Registration Statement and the Prospectus in such
a manner as to permit such Holder to deliver such Prospectus to purchasers of
the Transfer Restricted Securities in accordance with applicable law. If the
Company files a post-effective amendment to the Registration Statement, the
Company shall use commercially reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable. Any Holder who, subsequent to the date the Registration Statement
is declared effective, provides a Notice and Questionnaire required by this
Section 2(b) pursuant to the provisions of this Section (whether or not such
Holder has supplied the Notice and Questionnaire at the time the Registration
Statement was declared effective) shall be named as a selling securityholder in
the Registration Statement and Prospectus in accordance with the requirements of
this Section 2(b); PROVIDED, HOWEVER, that the Company shall not be obligated to
file more than one (1) post-effective amendment or supplement in any twenty-five
(25) day period following the date the Registration Statement is declared
effective for the purpose of naming Holders as selling securityholders who are
not named in such Registration Statement at the time of effectiveness. Each
Holder as to which the Registration Statement is being effected agrees to
furnish promptly to the Company all information required to be disclosed in
order to make information previously furnished to the Company by such Holder not
materially misleading.
3. ADDITIONAL INTEREST.
(a) If:
(i) the Registration Statement is not filed with the
Commission prior to or on the Filing Deadline;
(ii) the Registration Statement has not been declared
effective by the Commission prior to or on the Effectiveness Target
Date;
(iii) subject to the provisions of Section 4(b)(i) hereof, the
Registration Statement is filed and declared effective but, during the
Effectiveness Period, thereafter ceases to be effective or fails to be
usable for its intended purpose without being succeeded within three
Business Days by a post-effective amendment to the Registration
Statement or within five Business Days by a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
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Exchange Act that cures such failure and, in the case of a
post-effective amendment, is itself, within two Business Days of
filing, declared effective; or
(iv) after the 60th consecutive day in any 90-day period or
the 105th day in any 365-day period, as the case may be, of any
Suspension Period, the suspension referred to in Section 4(b)(i)
hereof has not been terminated,
(each such event referred to in foregoing clauses (i) through (iv), a
"REGISTRATION DEFAULT"), the Company hereby agrees to make additional payments
("ADDITIONAL INTEREST") with respect to the Transfer Restricted Securities to
the Record Holders thereof from and including the day on which the Registration
Default occurs to but excluding the day on which the Registration Default has
been cured. Additional Interest shall accrue to each Record Holder on the
Transfer Restricted Securities during such period at a rate of 0.5% per annum on
the amount of Transfer Restricted Securities (such amount determined as
described below).
(b) The amount of Transfer Restricted Securities shall be determined
as follows (x) with respect to the Notes, the aggregate principal amount of all
such Notes outstanding, (y) with respect to the shares of Class A Subordinate
Voting Stock into which the Notes have been converted, the aggregate number of
such shares of Class A Subordinate Voting Stock outstanding multiplied by the
Conversion Price (as defined in the Indenture) at the time such Notes were
converted, and (z) with respect to combinations thereof, the sum of (x) and (y)
for the relevant Transfer Restricted Securities.
(c) All accrued Additional Interest shall be paid in cash in arrears
to Record Holders by the Company on each Interest Payment Date by way of a
deposit of immediately available funds, sufficient to pay such accrued
Additional Interest, with the Paying Agent. The rate of accrual of the
Additional Interest with respect to any period shall not exceed 0.5% per annum
notwithstanding the occurrence of multiple concurrent Registration Defaults.
Following the cure of all Registration Defaults relating to any Transfer
Restricted Securities, the accrual of Additional Interest with respect to such
Transfer Restricted Securities shall cease.
Additional Interest shall cease to accrue on any Transfer Restricted
Security at the time said security ceases to be a Transfer Restricted Security;
PROVIDED that all obligations of the Company to pay Additional Interest accrued
prior to such time as set forth in this Section 3 shall survive until such time
as all such obligations with respect to such Transfer Restricted Security have
been satisfied in full.
The Additional Interest set forth above shall be the exclusive
monetary remedy available to the Holders of Transfer Restricted Securities for
Registration Defaults.
4. REGISTRATION PROCEDURES.
(a) In connection with the Registration Statement, the Company shall
comply with all the provisions of Section 4(b) hereof and shall use commercially
reasonable efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof, and pursuant thereto and in accordance with
Section 2(a) hereof, shall prepare and file with the Commission a
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Registration Statement relating to the registration on any appropriate form
under the Securities Act.
(b) In connection with the Registration Statement and any Prospectus
required by this Agreement to permit the sale or resale of Transfer Restricted
Securities, the Company, at its own expense, shall:
(i) Subject to any notice by the Company in accordance with
this Section 4(b) of the existence of any fact or event of the kind
described in Section 4(b)(iii)(D), use commercially reasonable efforts
to keep the Registration Statement continuously effective during the
Effectiveness Period; upon the occurrence of any event that would
cause the Registration Statement or the Prospectus contained therein
(A) to contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading or (B) to not
be effective or usable for the resale of Transfer Restricted
Securities during the Effectiveness Period, file promptly an
appropriate amendment to the Registration Statement or a report filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or
(B), use commercially reasonable efforts to cause such amendment to be
declared effective and the Registration Statement and the related
Prospectus to become usable for their intended purposes as soon as
practicable thereafter. Notwithstanding the foregoing, the Company may
suspend the availability of the Registration Statement, without being
required to pay any Additional Interest, upon written notice to the
Holders (which notice shall be accompanied by an instruction to
suspend the use of the Prospectus), for one or more periods not to
exceed 60 consecutive days in any 90-day period, and not to exceed, in
the aggregate, 105 days in any 365-day period (each such period, a
"SUSPENSION PERIOD") if:
(x) an event occurs and is continuing that, in the
Company's good faith judgment, would require the Company to make
changes in the Registration Statement or the Prospectus in order
that the Registration Statement or the Prospectus does not
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 (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading;
and
(y) the Company reasonably determines that the
disclosure of such event at such time would have a material
adverse effect on the business of the Company (and its
subsidiaries, if any, taken as a whole).
(ii) Prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective during the
Effectiveness Period; cause the
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Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by the Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the selling securityholders set forth in
the Registration Statement or supplement to the Prospectus.
(iii) Advise the underwriter(s), if any, and the Holders
promptly (but in any event within five Business Days) and, if
requested by such Persons, confirm such advice in writing:
(A) when the Registration Statement, the Prospectus or
any amendment, supplement or post-effective amendment thereto has
been filed, and, with respect to the Registration Statement or
any post-effective amendment thereto, when the same has become
effective,
(B) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under
the Securities Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes,
or
(D) of the existence of any fact or the happening of any
event, during the Effectiveness Period, that makes any statement
of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements
therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(iv) If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any
state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification
of the Transfer Restricted Securities under state securities or Blue
Sky laws, use commercially reasonable efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.
(v) Furnish to each of the Initial Purchasers before filing
with the Commission, a copy of the Registration Statement and copies
of any Prospectus
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included therein, which documents will be subject to the review of the
Initial Purchasers, for a period of at least five (5) Business Days,
and the Company will not file the Registration Statement or Prospectus
to which the Initial Purchasers, shall reasonably object within such
five (5) Business Day period without first making revisions that are
reasonably acceptable to the Initial Purchasers. The Company shall
also furnish to each of the Initial Purchasers before filing with the
Commission, if reasonably practicable, or otherwise promptly after
filing with the Commission, copies of any amendments to the
Registration Statement or supplements to the Prospectus, and shall
make the Company's representatives reasonably available for discussion
of such amendments or supplements and make such changes in such
amendments or supplements prior to the filing thereof, if reasonably
practicable, or prepare and file further amendments or supplements, as
the Initial Purchasers, may reasonably request (it being understood
that a request to correct a material misstatement or omission is an
example of one such reasonable request).
(vi) Make available at reasonable times for inspection by one
or more representatives of the selling Holders (designated in writing
by a Majority of Holders whose Transfer Restricted Securities are
included in the Registration Statement), any underwriter participating
in any distribution pursuant to the Registration Statement, and any
attorney or accountant retained by such selling Holders or any of the
underwriter(s), all financial and other records, pertinent corporate
documents and properties of the Company as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the Company's officers, directors,
managers and employees to supply all information reasonably requested
by any such representative or representatives of the selling Holders,
underwriter, attorney or accountant in connection with the
Registration Statement after the filing thereof and before its
effectiveness; PROVIDED, HOWEVER, that (A) each such representative of
the selling Holders, underwriter(s), attorney or accountant will be
required to agree in writing that records and information obtained by
it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in
the securities of the Company unless and until such is made generally
available to the public through no fault of such representative of the
selling Holders, underwriter(s), attorney or accountant or a selling
Holder, and (B) each selling Holder of such Transfer Restricted
Securities will be required further to agree in writing that it will,
upon learning that the disclosure of such records or information is
sought in a court of competent jurisdiction, or in connection with any
action, suit or proceeding, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent
disclosure of the records and information deemed confidential.
(vii) If reasonably requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in the Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may request to have included therein,
including, without limitation: (A) information relating to
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the "Plan of Distribution" of the Transfer Restricted Securities, (B)
information with respect to the principal amount of Notes or number of
shares of Class A Subordinate Voting Stock being sold to such
underwriter(s), (C) the purchase price being paid therefor and (D) any
other terms of the offering of the Transfer Restricted Securities to
be sold in such offering; PROVIDED, HOWEVER, that with respect to any
information requested for inclusion by a selling Holder, this clause
(vii) shall apply only to such information that relates to the
Transfer Restricted Securities to be sold by such selling Holder; and
make all required filings of such Prospectus supplement or
post-effective amendment as soon as reasonably practicable after the
Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
(viii) Furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one conformed copy of
the Registration Statement, as first filed with the Commission, and of
each amendment thereto (without any documents incorporated by
reference therein or exhibits thereto (or exhibits incorporated in
such exhibits by reference) unless requested).
(ix) Deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such Persons may reasonably request; subject
to any notice by the Company in accordance with this Section 4(b) of
the existence of any fact or event of the kind described in Section
4(b)(iii)(D), the Company hereby consents to the use of the Prospectus
and any amendment or supplement thereto by each of the selling Holders
and each of the underwriter(s), if any, in connection with the
offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto.
(x) If an underwriting agreement is entered into and the
registration is an Underwritten Registration, the Company shall:
(A) upon request, furnish to each underwriter and, in the
case of clause (1), to each selling Holder, in such substance and
scope as they may reasonably request and as are customarily made
by issuers to underwriters in primary underwritten offerings,
upon the date of closing of any sale of Transfer Restricted
Securities in an Underwritten Registration:
(1) a certificate, dated the date of such closing,
signed by the Chief Financial Officer of the Company
confirming, as of the date thereof, the matters set forth
in Section 6(i) of the Purchase Agreement and such other
matters as such parties may reasonably request;
(2) opinions, each dated the date of such closing,
of counsel to the Company (including the Company's
general counsel) covering such of the matters as are
customarily covered in
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legal opinions to underwriters in connection with primary
underwritten offerings of securities; and
(3) customary comfort letters, dated the date of
such closing, from the Company's independent accountants
(and from any other accountants whose report is contained
or incorporated by reference in the Registration
Statement), in the customary form and covering matters of
the type customarily covered in comfort letters to
underwriters in connection with primary underwritten
offerings of securities;
(B) set forth in full in the underwriting agreement, if
any, indemnification provisions and procedures which provide
rights no less protective than those set forth in Section 6
hereof with respect to all parties to be indemnified by the
Company; and
(C) deliver such other documents and certificates as may
be reasonably requested by such parties to evidence compliance
with clause (A) above and with any customary conditions contained
in the underwriting agreement or other agreement entered into by
the selling Holders pursuant to this clause (x).
(xi) Before any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s), if any, may reasonably request and do any
and all other acts or things necessary or customary to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Registration Statement; PROVIDED, HOWEVER,
that the Company shall not be required (A) to register or qualify as a
foreign corporation or a dealer of securities where it is not now so
qualified or to take any action that would subject it to the service
of process in any jurisdiction where it is not now so subject or (B)
to subject themselves to taxation in any such jurisdiction if they are
not now so subject.
(xii) Cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities
to be sold and not bearing any restrictive legends (unless required by
applicable securities laws) and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as
the Holders or the underwriter(s), if any, may request at least two
Business Days before any sale of Transfer Restricted Securities made
by such Holders or underwriter(s).
(xiii) Subject to Section 4(b)(i) hereof, if any fact or event
contemplated by Section 4(b)(iii)(D) hereof shall exist or have
occurred, use commercially reasonable efforts to prepare a
post-effective amendment to the Registration
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Statement or an amendment or supplement to the related Prospectus or
any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers
of Transfer Restricted Securities, the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(xiv) Provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee with certificates for the Notes and
any Class A Subordinate Voting Stock issued upon conversion thereof
that are in a form eligible for deposit with The Depository Trust
Company.
(xv) Cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence
investigation by any underwriter that is required to be retained in
accordance with the rules and regulations of the NASD.
(xvi) Otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission and all
reporting requirements under the rules and regulations of the Exchange
Act.
(xvii) Cause the Indenture to be qualified under the TIA not
later than the effective date of the Registration Statement required
by this Agreement, and, in connection therewith, cooperate with the
Trustee and the holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA, and execute and use commercially
reasonable efforts to cause the Trustee thereunder to execute all
documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner.
(xviii) Cause all Transfer Restricted Securities (other than the
Notes that have been designated for trading in the PORTALSM Market on
or before the date of this Agreement) covered by the Registration
Statement to be listed or quoted, as the case may be, on each
securities exchange or automated quotation system on which similar
securities issued by the Company are then listed or quoted.
(xix) Provide promptly to each Holder, upon written request,
each document filed with the Commission pursuant to the requirements
of Section 13 and Section 15 of the Exchange Act after the effective
date of the Registration Statement.
(xx) Enter into such customary agreements and take all such
other actions, if any, as Holders of at least 25% in aggregate
principal amount of the Transfer Restricted Securities may reasonably
request in order to facilitate the
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disposition of the Transfer Restricted Securities pursuant to the
Registration Statement.
(c) Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 4(b)(iii)(D) hereof and during any
Suspension Period, such Holder will, and will use commercially reasonable
efforts to cause any underwriter(s) in an Underwritten Offering to, forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
Registration Statement until:
(i) such Holder has received copies of the supplemented or
amended Prospectus contemplated by Section 4(b)(v) hereof; or
(ii) such Holder is advised in writing (the "ADVICE") by the
Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus.
If so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of suspension.
5. REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement shall be borne by the Company
regardless of whether a Registration Statement becomes effective, including,
without limitation:
(i) all registration and filing fees and expenses (including
filings made by the Initial Purchasers, Holders or underwriter(s), if
any, with the NASD);
(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 Class A Subordinate Voting Stock
to be issued upon conversion of the Notes), 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 Class A Subordinate Voting
Stock on a national securities exchange or automated quotation system
pursuant to the requirements hereof;
(vi) all fees and disbursements of independent certified
public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such
performance); and
13
(vii) all fees and expenses of the Initial Purchasers
(including reasonable fees and disbursements of counsel to the Initial
Purchasers) in connection with any amendment, modification or
supplement to this Agreement.
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. The Company shall not be required to pay any fees and disbursements of
counsel to the Initial Purchasers or Holders of Transfer Restricted Securities
in connection with the preparation and filing of the Registration Statement or
any amendment or supplement thereto, except as specifically provided herein.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Holder, such
Holder's officers and employees and each person, if any, who controls such
Holder within the meaning of the Securities Act (each Holder and each of its
respective officers, employees and any such control person being an "INDEMNIFIED
HOLDER"), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to resales of the Transfer
Restricted Securities), to which such Indemnified Holder may become subject,
insofar as any such loss, claim, damage, liability or action arises out of, or
is based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Registration Statement or
Prospectus or any amendment or supplement thereto or (B) any blue sky
application or other document or any amendment or supplement thereto
prepared or executed by the Company (or based upon written information
furnished by or on behalf of the Company expressly for use in such
blue sky application or other document or amendment on supplement)
filed in any jurisdiction specifically for the purpose of qualifying
any or all of the Transfer Restricted Securities under the securities
law of any state or other jurisdiction (such application or document
being hereinafter called a "BLUE SKY APPLICATION"); or
(ii) the omission or alleged omission to state therein any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading,
and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or Prospectus or amendment
or supplement thereto or Blue Sky Application in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any Holder
(or its related Indemnified Holder) specifically for use
14
therein or out of the failure by the Indemnified Holder to furnish to any
purchaser of its Restricted Transfer Security of the Prospectus and any
supplement or amendment thereto in the form provided to such Indemnified Holder
by the Company. The foregoing indemnity agreement is in addition to any
liability that the Company may otherwise have to any Indemnified Holder.
(b) Each Holder, severally and not jointly, shall indemnify and hold
harmless the Company, their respective officers and employees, their respective
directors and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company, or any
such director, officer, employee or controlling person may become subject,
insofar as any such loss, claim, damage or liability or action arises out of, or
is based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or Prospectus or
any amendment or supplement thereto or any Blue Sky Application; or
(ii) the omission or the alleged omission to state therein any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall reimburse the Company, and any such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Company, or any such director, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability that any Holder may otherwise have to the Company, or any of their
respective directors, officers, employees or controlling persons and any such
director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 6). In case any such
claim or action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties, other than reasonable costs of
investigation, unless (i) the employment of such counsel shall have been
15
authorized in writing by one of the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have employed
counsel to have charge of the defense of such action within a reasonable time
after notice of commencement of the action or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them that are different from or additional to those available to one or
all of the indemnifying parties (in which case the indemnifying parties shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events the fees and expenses of
one counsel selected by all the indemnified parties to represent them all shall
be borne by the indemnifying parties. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or reasonably
could have been a party and indemnity or contribution may be or could have been
sought hereunder by the indemnified party (an "ACTION"), unless such settlement,
compromise or judgment (x) includes an unconditional release of the indemnified
party from all liability on claims that are the subject matter of such action
and (y) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of the indemnified party. No indemnified
party shall, without the prior written consent of the indemnifying party, effect
any settlement or compromise of, or consent to the entry of judgment with
respect to, any Action.
(d) If the indemnification provided for in this Section 6 shall for
any reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability
(or action in respect thereof) referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof):
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company from the offering and sale
of the Transfer Restricted Securities on the one hand and a Holder
with respect to the sale by such Holder of the Transfer Restricted
Securities on the other; or
(ii) if the allocation provided by clause (6)(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 6(d)(i)
but also the relative fault of the Company on the one hand and the
Holder on the other in connection with the statements or omissions or
alleged statements or alleged omissions that resulted in such loss,
claim, damage or liability (or action in respect thereof), as well as
any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and a Holder on
the other with respect to such offering and such sale shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Notes
(before deducting expenses) received by the Company, on the one hand, bear to
the total proceeds received by such Holder with respect to its sale of Transfer
Restricted Securities on the other. The relative fault of the parties shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the
16
Company on the one hand or the Holders on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, and each Holder agree that
it would not be just and equitable if the amount of contribution pursuant to
this Section 6(d) were determined by PRO RATA allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to in the first sentence of this Section 6(d). The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 6
shall be deemed to include, for purposes of this Section 6, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 6, no Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Transfer Restricted Securities purchased by it were resold exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute as provided in this Section 6(d) are several and not
joint.
7. RULE 144 AND 144A. The Company shall use commercially reasonable
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder, make
publicly available other information so long as necessary to permit sales of
their securities pursuant to Rules 144 and 144A. The Company covenants that it
will take such further action as any Holder 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 Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). Upon the written request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements. The Company will provide a copy of this
Agreement to prospective purchasers of Notes identified to the Company by the
Initial Purchasers upon written request.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any Underwritten Registration hereunder unless such Holder:
(i) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such
arrangements; and
(ii) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up
letters and other documents required under the terms of such
underwriting arrangements.
9. SELECTION OF UNDERWRITERS. The Holders of Transfer Restricted
Securities covered by the Registration Statement who desire to do so may sell
such Transfer Restricted Securities in an Underwritten Offering. In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be
17
selected by a Majority of Holders whose Transfer Restricted Securities are
included in such offering; PROVIDED, HOWEVER, that such investment bankers and
managers must be reasonably satisfactory to the Company.
10. MISCELLANEOUS.
(a) REMEDIES. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Company's obligations under Section 2 hereof. The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) ADJUSTMENTS AFFECTING TRANSFER RESTRICTED SECURITIES. The Company
shall not, directly or indirectly, take any action with respect to the Transfer
Restricted Securities as a class that would adversely affect the ability of the
Holders of Transfer Restricted Securities to include such Transfer Restricted
Securities in a registration undertaken pursuant to this Agreement.
(c) NO INCONSISTENT AGREEMENTS. The Company shall not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that interferes with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Company shall
not grant to any of its security holders (other than the holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Registration Statement provided for in this Agreement other
than the Transfer Restricted Securities.
(d) AMENDMENTS AND WAIVERS. This Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of a Majority of Holders; PROVIDED that the Company and the Initial
Purchasers may amend, modify or supplement this Agreement in any manner that
does not adversely affect the Holders.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing (except if the context expressly
permits otherwise) by hand-delivery, first-class mail (registered or certified,
return receipt requested), telecopier, or air courier guaranteeing overnight
delivery:
(i) if to a Holder, at the address set forth on the records of
the registrar under the Indenture or the transfer agent of the
Class A Subordinate Voting Stock, as the case may be; and
(ii) if to the Company:
Magna Entertainment Corp.
000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, X00 0X0
00
Xxxxxx
Attn: Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Sidley Xxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
X.X.X.
Attn: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All such notices and communications shall be deemed to have been duly
given at: the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
(f) 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 limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; PROVIDED, HOWEVER, that
(i) this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign acquired Transfer Restricted Securities from such Holder and (ii) nothing
contained herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms of the
Purchase Agreement or the Indenture.
(g) COUNTERPARTS. This Agreement may be executed in any number of
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.
(h) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Company or its Affiliates shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
(k) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity,
19
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MAGNA ENTERTAINMENT CORP.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
BMO XXXXXXX XXXXX CORP.
By:
-------------------------------
Name:
Title:
CIBC WORLD MARKETS CORP.
By:
-------------------------------
Name:
Title:
EXHIBIT A
MAGNA ENTERTAINMENT CORP.
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 7-1/4% Convertible Subordinated
Notes due December 15, 2009 (the "Notes") of Magna Entertainment Corp. (the
"Company") or Class A Subordinate Voting Stock, par value $0.01 per share (the
"Class A Subordinate Voting Stock" and, together with the Notes, the
"Registrable Securities"), of the Company, understands that the Company has
filed or intends to file with the Securities and Exchange Commission a
registration statement on an appropriate form for the registration of the resale
under Rule 415 of the Securities Act (the "Shelf Registration Statement") of the
Registrable Securities in accordance with the terms of the Registration Rights
Agreement dated as of December 2, 2002 (the "Registration Rights Agreement"),
among the Company and the initial purchasers party thereto. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below.
Each beneficial owner of Registrable Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Shelf Registration
Statement, a beneficial owner of Registrable Securities generally will be
required to be named as a selling securityholder in the related prospectus,
deliver a prospectus to purchasers of Registrable Securities and be bound by
those provisions of the Registration Rights Agreement applicable to such
beneficial owner (including certain indemnification provisions, as described
below). Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Shelf Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus. Any beneficial owner of Notes wishing to include its
Registrable Securities in the Shelf Registration Statement must deliver to the
Company a properly completed and signed selling securityholder Notice and
Questionnaire.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the "selling securityholder") of
Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities beneficially owned by it and
listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the
Shelf Registration Statement. The undersigned, by signing and returning this
Notice and Questionnaire, understands and agrees that it will be bound by the
terms and conditions of this Notice and Questionnaire and the Registration
Rights Agreement. The undersigned hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
A-1
QUESTIONNAIRE
1. (a) Full legal name of selling securityholder:
------------------------------------------------------------------------
(b) Full legal name of registered Holder (if not the same as (a) above)
through which Registrable Securities listed in (3) below are held:
------------------------------------------------------------------------
(c) Full legal name of The Depository Trust Company participant (if
applicable and if not the same as (b) above) through which Registrable
Securities listed in (3) below are held:
------------------------------------------------------------------------
2. Address for notices to selling securityholder:
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
Telephone (including area code):
Fax (including area code):
Contact Person:
3. Beneficial ownership of Registrable Securities:
(a) Type and Principal Amount of Registrable Securities beneficially owned:
------------------------------------------------------------------------
------------------------------------------------------------------------
(b) CUSIP No(s). of such Registrable Securities beneficially owned:
------------------------------------------------------------------------
------------------------------------------------------------------------
4. Beneficial ownership of the Company securities owned by the selling
securityholder: EXCEPT AS SET FORTH BELOW IN THIS ITEM (4), THE
UNDERSIGNED IS NOT THE BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES
OF THE COMPANY OTHER THAN THE REGISTRABLE SECURITIES LISTED ABOVE IN
ITEM (3). Type and amount of other securities beneficially owned by the
selling securityholder:
------------------------------------------------------------------------
------------------------------------------------------------------------
5. Relationship with the Company:
EXCEPT AS SET FORTH BELOW, NEITHER THE UNDERSIGNED NOR ANY OF ITS
AFFILIATES, OFFICERS, DIRECTORS OR PRINCIPAL EQUITY HOLDERS (5% OR
MORE) HAS HELD ANY POSITION OR OFFICE OR HAS HAD ANY OTHER MATERIAL
RELATIONSHIP WITH THE COMPANY (OR ITS PREDECESSORS OR AFFILIATES)
DURING THE PAST THREE YEARS.
State any exception here:
------------------------------------------------------------------------
------------------------------------------------------------------------
6. Plan of distribution:
EXCEPT AS SET FORTH BELOW, THE UNDERSIGNED (INCLUDING ITS DONEES OR
PLEDGEES) INTENDS TO DISTRIBUTE THE REGISTRABLE SECURITIES LISTED ABOVE
IN ITEM (3) PURSUANT TO THE SHELF REGISTRATION STATEMENT ONLY AS
FOLLOWS (IF AT ALL). SUCH REGISTRABLE SECURITIES MAY BE SOLD FROM TIME
TO TIME DIRECTLY BY THE UNDERSIGNED OR, ALTERNATIVELY, THROUGH
A-2
UNDERWRITERS, BROKER-DEALERS OR AGENTS. IF THE REGISTRABLE SECURITIES
ARE SOLD THROUGH UNDERWRITERS, BROKER-DEALERS OR AGENTS, THE SELLING
SECURITYHOLDER WILL BE RESPONSIBLE FOR UNDERWRITING DISCOUNTS OR
COMMISSIONS OR AGENT'S COMMISSIONS. SUCH REGISTRABLE SECURITIES MAY BE
SOLD IN ONE OR MORE TRANSACTIONS AT FIXED PRICES, AT PREVAILING MARKET
PRICES AT THE TIME OF SALE, AT VARYING PRICES DETERMINED AT THE TIME OF
SALE, OR AT NEGOTIATED PRICES. SUCH SALES MAY BE EFFECTED IN
TRANSACTIONS (WHICH MAY INVOLVE BLOCK TRANSACTIONS) (i) ON ANY NATIONAL
SECURITIES EXCHANGE OR QUOTATION SERVICE ON WHICH THE REGISTRABLE
SECURITIES MAY BE LISTED OR QUOTED AT THE TIME OF SALE, (ii) IN THE
OVER-THE-COUNTER MARKET, (III) IN TRANSACTIONS OTHER THAN ON SUCH
EXCHANGES OR SERVICES OR IN THE OVER-THE-COUNTER MARKET OR (iv) THROUGH
THE WRITING OF OPTIONS. IN CONNECTION WITH SALES OF THE REGISTRABLE
SECURITIES OR OTHERWISE, THE UNDERSIGNED MAY ENTER INTO HEDGING
TRANSACTIONS WITH BROKER-DEALERS, WHICH MAY IN TURN ENGAGE IN SHORT
SALES OF THE REGISTRABLE SECURITIES AND DELIVER REGISTRABLE SECURITIES
TO CLOSE OUT SUCH SHORT POSITIONS, OR LOAN OR PLEDGE REGISTRABLE
SECURITIES TO BROKER- DEALERS THAT IN TURN MAY SELL SUCH SECURITIES.
State any exceptions here:
------------------------------------------------------------------------
------------------------------------------------------------------------
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Securities Act and the Exchange Act and the
rules thereunder relating to prospectus delivery requirements, stock
manipulation, particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Registrable Securities pursuant
to the Shelf Registration Statement, and the consequences of failing to take
such action. The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction, or fail to take such action, in violation
of such provisions.
The selling securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
under certain circumstances as set forth therein.
Pursuant to the Registration Rights Agreement, the Company has agreed
under certain circumstances to indemnify the selling securityholders 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 at 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) above and
the inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the shelf registration statement and the related prospectus.
A-3
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
Beneficial Owner
By:
-----------------------------------
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE TO:
MAGNA ENTERTAINMENT CORP.
000 XXXXX XXXXX
XXXXXX, XXXXXXX X0X 0X0
XXXXXX
ATTENTION: CORPORATE SECRETARY
TELEPHONE: (000) 000-0000
with a copy to:
SIDLEY XXXXXX XXXXX & XXXX LLP
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
X.X.X.
ATTENTION: XXXXX X. XXXXXXX
TELEPHONE: (000) 000-0000
A-4