UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported) April
4, 2007
AMERICAN
REAL ESTATE PARTNERS, L.P.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
1-9516
|
|
13-3398766
|
|
|
(State
of Incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
767
Fifth Avenue, Suite 4700
New
York, New York 10153
(Address
of principal executive offices)(Zip code)
(212)
702-4300
(Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4 (c))
Section
1 - Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive Agreement
Section
2 - Financial Information
Item
2.03 Creation of Direct Financial Obligation or an Obligation under an
Off- Balance
Sheet Arrangement of Registrant
On
April
4, 2007, American
Real Estate Partners, L.P. (“AREP”) entered
into a Securities Purchase Agreement with Portside Growth and Opportunity Fund,
an investment fund managed by Ramius Capital Group, LLC (“Ramius Capital”), and
an investment fund managed by Highbridge Capital Management, LLC (“Highbridge”
and, together with Ramius Capital, the “Initial Buyers”) to sell an aggregate of
$200 million of Variable Rate Senior Convertible Notes due 2013 (the “Notes”) in
a private placement pursuant to Section 4(2) of the U.S. Securities Act of
1933
(the “Securities Act”). The Notes will bear interest at a rate of LIBOR minus
125 basis points, but no less than 4.0% nor higher than 5.5%, payable quarterly,
and will be convertible into Depositary Units of AREP at a conversion price
of
$132.595 per share, subject to adjustments in certain
circumstances.
Under
the
terms of the Securities Purchase Agreement, the Initial Buyers will have the
option until April 13, 2007 to purchase up to an additional $400 million of
Notes in the aggregate (the “Additional Notes”). In the event that the Initial
Buyers do not purchase the full amount of such Additional Notes, AREP will
have
the right, until May 5, 2007, to place such unpurchased Additional Notes with
other investors, subject to an option granted to the Initial Buyers to purchase
up to an aggregate of $100 million of such unpurchased Additional Notes on
or
before April 25, 2007.
The
sale
of the initial Notes is expected to close on April 5, 2007. The Notes (including
the Additional Notes) have not been and will not be registered under the
Securities Act and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements
of
the Securities Act.
In
connection with the sale of the Notes, AREP
and
the Initial Buyers have entered into a Registration Rights Agreement, pursuant
to which AREP has agreed to file one or more shelf registration statements
with
respect to resales of Depositary Units issuable upon conversion of the
Notes.
Section
3 - Securities and Trading Markets
Item
3.02 Unregistered Sale of Equity Securities
The
information provided in Item 2.03 regarding the issuance and terms of the
Variable Rate Senior Convertible Notes is hereby incorporated by reference.
The
Notes
are being issued in a private placement pursuant to Section 4(2) of the
Securities Act.
Section
8 - Other Events
Item
8.01 Other
Events
On
April
5, 2007, the Company issued a press release, a copy of which is furnished as
Exhibit 99.1.
Section
9 - Financial Statements and Exhibits
Item
9.01. Financial
Statements and Exhibits
(d)
Exhibits
Exhibit
10.41- Securities
Purchase Agreement, dated April 4, 2007, by and among AREP and the Initial
Buyers
Exhibit
10.42 - Registration
Rights Agreement, dated April 4, 2007, by and among AREP and the Initial
Buyers
Exhibit
10.43 - Form
of
Indenture, dated April 5, 2007, by and among the Company, American Real Estate
Finance Corp., American Real Estate Holdings Limited Partnership, and Wilmington
Trust Company, as Trustee
Exhibit
99.1
- Press
release dated April 5, 2007
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
AMERICAN
REAL ESTATE PARTNERS,
L.P. (Registrant)
|
||
| |
|
|
| Date: April 5, 2007 | By: |
AMERICAN
PROPERTY
INVESTORS, INC.,
its
General Partner
|
| By: | /s/ Keith A Meister | |
|
Keith A. Meister |
||
| Principal Executive Officer | ||
Exhibit
10.41
SECURITIES
PURCHASE AGREEMENT
SECURITIES
PURCHASE AGREEMENT
(the
"Agreement"),
dated
as of April 4, 2007, by and among American Real Estate Partners, L.P., a
Delaware limited partnership with headquarters located at 767 Fifth Avenue,
Suite 4700, New York, New York 10153 (the "Company"),
and
the investors listed on the Schedule of Buyers attached hereto, as such Schedule
of Buyers may be amended to add additional investors upon executing any Joinder
Agreements (as defined herein) pursuant to Section 1(b) hereof (individually,
a
"Buyer"
and
collectively, the "Buyers").
WHEREAS:
A. The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Rule 144A and
Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"),
and
Rule 506 of Regulation D ("Regulation D")
as
promulgated by the United States Securities and Exchange Commission (the
"SEC")
under
the 1933 Act.
B. The
Company has authorized the issuance of up to $600,000,000 of Senior Convertible
Notes due 2013 (the "Notes"),
which
shall be issued pursuant to and by the provisions of an Indenture dated as
of
the Initial Closing Date (as defined below) between the Company and Wilmington
Trust Company, as trustee (the "Trustee"),
in
substantially the form attached hereto as Exhibit
A
(the
"Indenture").
The
Notes will be in the form attached to the Indenture as Exhibit A attached
thereto and shall be convertible into the depositary units representing limited
partnership units of the Company (the "Units"
and as
issued upon conversion of the Notes, the "Conversion
Units")
in
accordance with the terms thereof and of the Indenture.
C. Each
Buyer listed as an Initial Buyer on the Schedule of Buyers attached hereto
(individually, an "Initial
Buyer"
and
collectively, the "Initial
Buyers")
wishes
to purchase, and the Company wishes to sell, upon the terms and conditions
stated in this Agreement, at the Initial Closing (as defined below) $100,000,000
principal amount of Notes (which aggregate amount for both Initial Buyers shall
be $200,000,000 in the aggregate) (collectively, the "Initial Notes").
D. Subject
to the terms and conditions set forth in this Agreement, each Initial Buyer
shall have the right, from the Initial Closing Date until 5:00 p.m. New York
City time on April 13, 2007 (the "First
Option Period"),
to
purchase, and require the Company to sell, up to $200,000,000 principal amount
of Notes (which aggregate amount for both Initial Buyers shall not exceed
$400,000,000) (collectively, the "Additional
Notes").
E. Subject
to the terms and conditions set forth in this Agreement, to the extent an
Initial Buyer’s portion of the First Option was not exercised in full by such
Initial Buyer, each Initial Buyer shall have the right from and after the
expiration of the First Option Period until 5:00 p.m. New York City time on
April 25, 2007 (the "Second
Option Period"),
to
purchase, and require the Company to sell, up to a principal amount of
Additional Notes equal to the lesser of (i) $50,000,000 and (ii) the difference
calculated by subtracting (A) the aggregate principal amount of Additional
Notes
purchased by such Initial Buyer at the First Additional Closing from
(B)
$200,000,000
(which aggregate amount, for both Initial Buyers, when combined with the
principal amount of Additional Notes purchased by both Initial Buyers at the
First Additional Closing shall not exceed $400,000,000).
F. Subject
to the terms and conditions set forth in this Agreement, after the expiration
of
the First Additional Closing Date until 5:00 p.m. New York City time on May
5,
2007 (the "Third
Option Period"),
the
Company shall have the right to permit one or more additional parties (each
of
which shall become a party to this Agreement as a Buyer by executing a Joinder
Agreement) to purchase, and require the Company to sell any Additional Notes
not
previously purchased hereunder by the Initial Buyers, up to a maximum aggregate
principal amount of Additional Notes equal to $400,000,000, provided,
that,
until the expiration of the Second Option Period, the Company may not sell
any
Additional Notes for which the Initial Buyers have an option to purchase
pursuant to the Second Option.
G. Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in
the
form attached hereto as Exhibit
B
(as
amended or modified from time to time, the "Registration
Rights Agreement"),
pursuant to which the Company has agreed to provide certain registration rights
with respect to the Conversion Units under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities
laws.
H. The
Notes
and the Conversion Units collectively are referred to herein as the
"Securities".
NOW,
THEREFORE,
the
Company and each Buyer hereby agree as follows:
1. PURCHASE
AND SALE OF NOTES.
(a) Purchase
of Initial Notes. Subject to the satisfaction (or waiver) of the conditions
set
forth in Sections 5(a) and 6(a) below, the Company shall issue and sell to
each
Initial Buyer, and each Initial Buyer severally, but not jointly, agrees to
purchase from the Company on the Initial Closing Date (as defined below)
$100,000,000 principal amount of Notes (the "Initial
Closing").
(b) Purchase
of Additional Notes.
(i) Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 5(b)
and
6(b) below, the Company agrees to sell to each Initial Buyer, and each Initial
Buyer shall have the right to purchase (the "First
Option")
on the
First Additional Closing Date (as defined below), up to an aggregate of
$200,000,000 principal amount of Additional Notes (the "First
Additional Closing").
To
exercise the First Option, an Initial Buyer must so notify the Company in
writing (the "First
Option Exercise Notice"),
prior
to 5:00 p.m. New York City time on April 13, 2007, which First Option Exercise
Notice shall specify the principal amount of Additional Notes such Initial
Buyer
elects to purchase pursuant to the First Option.
(ii) Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 5(b)
and
6(b) below, the Company agrees to sell to each Initial Buyer, and each Initial
Buyer shall have the right to purchase (the "Second
Option")
on the
Second
-2-
Additional
Closing Date (as defined below), up to a principal amount of Additional Notes
equal to the lesser of (i) $50,000,000 and (ii) the difference calculated
by subtracting (A) the aggregate principal amount of Additional Notes purchased
by such Initial Buyer at the First Additional Closing from (B) $200,000,000
(the
"Second
Additional Closing").
To
exercise the Second Option, an Initial Buyer must so notify the Company in
writing (the "Second
Option Exercise Notice")
on or
before the expiration of the Second Option Period, which Second Option Exercise
Notice shall specify the principal amount of Additional Notes such Initial
Buyer
elects to purchase pursuant to the Second Option.
(iii) From
and
after the expiration of the First Option Period, until the expiration of the
Third Option Period, to the extent that the Initial Buyers have not elected
to
purchase the entire $400,000,000 aggregate principal amount of Additional Notes
pursuant to the First Option and the Second Option, the Company, directly or
through a placement agent, shall be entitled to place (the "Third
Additional Closing,"
and
when referred to with the First Additional Closing and the Second Additional
Closing, each an "Additional
Closing"
and
together, the "Additional
Closings")
with
other investors (such investors, "Other
Buyers"),
such
amount of the Additional Notes not previously purchased by the Initial Buyers
on
the same terms and conditions as the Initial Buyers received at the Initial
Closing, the First Additional Closing and the Second Additional Closing;
provided,
that
until the expiration of the Second Option Period, the Company may not sell
any
Additional Notes for which the Initial Buyers have an option to purchase
pursuant to the Second Option. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 5(b) and 6(b) below, the Company agrees to
sell
to each Other Buyer, and each Other Buyer shall purchase, such amount of
Additional Notes as such Other Buyer has elected to purchase. At or prior to
the
end of the Third Option Period, each Other Buyer shall execute and deliver
to
the Company a joinder agreement in the form attached hereto as Exhibit
C
indicating the principal amount of Additional Notes to be purchased by such
Other Buyer, which the Company shall acknowledge and agree to in writing (each,
a "Joinder
Agreement").
(iv) Upon
the
execution and delivery of a Joinder Agreement by an Other Buyer and the Company,
(A) the Company shall become obligated to sell to such Other Buyer, and such
Other Buyer shall become obligated to purchase from the Company, such principal
amount of Additional Notes specified in the Joinder Agreement on the Third
Additional Closing Date and (ii) each such Other Buyer shall be deemed to be
a
"Buyer" hereunder, entitled to all rights, and subject to all obligations,
of a
Buyer. Upon consummation of each Additional Closing, the parties agree that
the
Schedule of Buyers shall be amended to reflect additional Buyers and/or the
Additional Notes purchased at each such Additional Closing. Each Other Buyer
and
each Initial Buyer that delivers an Option Exercise Notice is referred to herein
as an "Additional
Buyer"
and,
collectively, the "Additional
Buyers."
As
used herein "Business
Day"
means
any day other than a Saturday, Sunday or other day on which commercial banks
in
The City of New York are authorized or required by law to remain
closed.
(c) Closing.
The Initial Closing and the Additional Closing are each referred to in this
Agreement as a "Closing."
Each
Closing shall occur on the applicable Closing Date (as defined
-3-
below)
at
the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New
York 10022. Subject to the satisfaction (or waiver by the Initial Buyers and
the
Company, as applicable) of the conditions set forth in Sections 5(a) and 6(a)
below, the date and time of the Initial Closing (the "Initial Closing
Date")
shall
be 10:00 a.m., New York City time, on April 5, 2007 (or such other date as
is
mutually agreed to by the Company and each Buyer). Subject to the satisfaction
(or waiver by the applicable Buyers and the Company, as applicable) of the
conditions to the First Additional Closing set forth in Section 5(b) and 6(b),
the date and time of the First Additional Closing (the "First
Additional Closing Date")
shall
be 10:00 a.m., New York City time, on April 16, 2007 (or such other date(s)
as
is mutually agreed to by the Company and the applicable Buyers). Subject to
the
satisfaction (or waiver by the applicable Buyers and the Company, as applicable)
of the conditions to the Second Additional Closing set forth in Section 5(b)
and
6(b), the date and time of the Second Additional Closing (the "Second
Additional Closing Date"),
shall
be 10:00 a.m., New York City time, on April 26, 2007 (or such other date(s)
as
is mutually agreed to by the Company and the applicable Buyers). Subject to
the
satisfaction (or waiver by the applicable Buyers and the Company, as applicable)
of the conditions to the Third Additional Closing set forth in Section 5(b)
and
6(b), the date and time of the Third Additional Closing (the "Third
Additional Closing Date,"
and
when referred to with the First Additional Closing Date and the Second
Additional Closing Date, each, an "Additional
Closing Date"
and
together, the "Additional
Closing Dates")
shall
be 10:00 am New York City time, on May 7, 2007 (or such other date(s) as is
mutually agreed to by the Company and the applicable Buyers).
(d) Purchase
Price. The purchase price for the Initial Notes to be purchased by each Initial
Buyer at the Initial Closing (the "Initial
Notes Purchase
Price")
shall
be $100,000,000. If purchased by an Additional Buyer at an Additional Closing,
Additional Notes shall be sold at a purchase price of $1.00 for each $1.00
of
principal amount of Additional Notes to be purchased by such Additional Buyer
at
such Additional Closing Date, plus, in each case, accrued interest on such
Additional Notes from the preceding interest payment date, or if no interest
has
been paid on the Additional Notes, from the Initial Closing Date.
(e) Form
of
Payment. On each Closing Date, (i) each Buyer shall pay its applicable purchase
price contemplated pursuant to Section 1(d) above to the Company for the Notes
to be issued and sold to such Buyer at such Closing, by wire transfer of
immediately available funds in accordance with the Company's written wire
instructions, and (ii) the Company shall deliver or caused to be delivered
to each Buyer the Notes (for the account of such Buyer as such Buyer shall
instruct) which such Buyer is then purchasing, duly executed on behalf of the
Company and registered in the name of such Buyer or its designee.
2. BUYER'S
REPRESENTATIONS AND WARRANTIES.
Each
Buyer, severally and not jointly, represents and warrants, as of the date hereof
and as of the Initial Closing Date with respect to each Initial Buyer, and
as of
the date of each Additional Closing Date with respect to each Additional Buyer
purchasing Additional Notes on such Additional Closing Date, that:
(a) No
Public
Sale or Distribution. Such Buyer is (i) acquiring the Notes and (ii) upon
conversion of the Notes, will acquire the Conversion Units issuable upon
conversion of the Notes, in each case, for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the 1933
Act;
-4-
provided,
however, that by making the representations herein, such Buyer does not agree
to
hold any of the Securities for any minimum or other specific term and reserves
the right to dispose of the Securities at any time in accordance with or
pursuant to a registration statement or an exemption under the 1933 Act. Such
Buyer acknowledges that it is not purchasing the Notes as a result of any
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television,
or
any seminar or meeting whose attendees have been invited by general solicitation
or general advertising. Such Buyer further acknowledges, to its knowledge,
that
it is not purchasing the Notes as a result of any general solicitation or
general advertising, as such terms are used in Regulation D under the 1933
Act.
Such Buyer is acquiring the Securities hereunder in the ordinary course of
its
business. Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities.
As
used in this Agreement, "Person"
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(b) Accredited
Investor Status. Such Buyer is an "accredited investor" as that term is defined
in Rule 501(a) of Regulation D and a "qualified institutional buyer" within
the
meaning of Rule 144A under the 1933 Act.
(c) Reliance
on Exemptions. Such Buyer understands that the Securities are being offered
and
sold to it in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such Buyer's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire
the
Securities.
(d) Information.
Such Buyer and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities which have been requested
by
such Buyer. Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors,
if
any, or its representatives shall modify, amend or affect such Buyer's right
to
rely on the Company's representations and warranties contained herein. Such
Buyer understands that its investment in the Securities involves a high degree
of risk. Such Buyer has sought such accounting, legal and tax advice as it
has
considered necessary to make an informed investment decision with respect to
its
acquisition of the Securities.
(e) No
Governmental Review. Such Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
(f) Validity;
Enforcement. This Agreement and the Registration Rights Agreement have been
duly
and validly authorized, executed and delivered on behalf of such Buyer and
shall
constitute the legal, valid and binding obligations of such Buyer enforceable
against such Buyer in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.
-5-
other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.
(g) No
Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the Registration Rights Agreement and the consummation by such
Buyer of the transactions contemplated hereby and thereby will not (i) result
in
a violation of the organizational documents of such Buyer or (ii) conflict
with,
or constitute a default (or an event which with notice or lapse of time or
both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of
any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the enforceability of this Agreement or the Registration
Rights Agreement or ability of such Buyer to perform its obligations hereunder
or thereunder.
(h) Residency.
Such Buyer is a resident of that jurisdiction specified below its address on
the
Schedule of Buyers.
(i) No
Short
Positions. No Initial Buyer purchasing Initial Notes, and no Additional Buyer
purchasing Additional Notes, has any direct or indirect short position in the
Units or any type of direct or indirect forward contracts, options, puts, swaps,
"put equivalent positions" (as such term is defined in Rule 16a-1(h) of the
1934
Act) or similar arrangements with respect to the Units.
(j) Manipulation
of Price. No Initial Buyer purchasing Initial Notes, and no Additional Buyer
purchasing Additional Notes, has, and to its knowledge no one acting on its
behalf has, taken, directly or indirectly, any action designed to cause or
to
result in the stabilization or manipulation of the price of any security of
the
Company in connection with the purchase or any resale of any of the Securities
by such Buyer.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Initial Buyers, as of the date
hereof and as of the Initial Closing Date, and to each Additional Buyer as
of
the date of each Additional Closing Date on which such Additional Buyer is
purchasing Additional Notes, that:
(a) Organization
and Qualification. The Company is duly organized and validly existing and in
good standing under the laws of the State of Delaware, and has the requisite
power and authorization to own its properties and to carry on its business
as
now being conducted. The Company is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which its ownership
of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not reasonably be expected to have a Material Adverse
Effect. As used in this Agreement, "Material
Adverse Effect"
means
any material adverse effect on the business, properties, assets, operations,
results of operations or condition (financial or otherwise) of the Company
and
its subsidiaries, taken as a whole, or on the transactions contemplated hereby
or in the other Transaction Documents (as defined
-6-
below)
or
by the agreements and instruments to be entered into in connection herewith
or
therewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents.
(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to
enter into and perform its obligations under this Agreement, the Indenture,
the
Notes and the Registration Rights Agreement (collectively, the "Transaction
Documents")
and to
issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Notes and the reservation
for
issuance and the issuance of the Conversion Units issuable
upon conversion of the Notes have been duly authorized by its general partner
and (other than the filing with the SEC of one or more Registration Statements
in accordance with the requirements of the Registration Rights Agreement) no
further authorization is required by the Company, its general partner or its
equityholders. This Agreement and the other Transaction Documents of even date
herewith have been duly executed and delivered by the Company, and constitute
the legal, valid and binding obligations of the Company, enforceable against
the
Company in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating
to,
or affecting generally, the enforcement of applicable creditors' rights and
remedies.
(c) Issuance
of Securities. As of each Closing, a number of Units shall have been duly
authorized and reserved for issuance, free of pre-emptive rights, sufficient
for the purpose of enabling the
Company
to satisfy all obligations to issue the Conversion Units upon
conversion of all of the Notes. Upon conversion in accordance with the
Indenture, the Conversion Units will be validly issued and free from all
preemptive or similar rights, taxes, liens and charges with respect to the
issue
thereof, with the holders being entitled to all rights accorded to a holder
of
Units. Assuming the accuracy of the representations of the Buyers contained
in
Section 2 hereof and their compliance with the agreements set forth therein,
the
issuance by the Company of the Notes pursuant to this Agreement, and the
issuance by the Company of the Conversion Units upon conversion of the Notes
in
accordance with the terms of the Notes and the Indenture, are exempt from
registration under the 1933 Act.
(d) No
Conflicts. The execution, delivery and performance of the Transaction Documents
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance
of
the Notes and reservation for issuance and issuance of the Conversion Units)
will not (i) result in a violation of the Certificate of Limited Partnership
or
the Company's Limited Partnership Agreement (each as defined in Section 3(x))
or
any equity securities of the Company or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to
which
the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and the rules and regulations
of the New York Stock Exchange (the "Principal
Market"))
applicable to the Company or by which any property or asset of the Company
is
bound or affected, except, in the case of clauses (ii) and (iii), as would
not
reasonably be expected to have a Material Adverse Effect.
-7-
(e) Consents.
The Company is not required to obtain any consent, authorization or order of,
or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by
the
Transaction Documents, in each case in accordance with the terms hereof or
thereof, except for any such consent, authorization, order, filing or
registration the failure to obtain or make would not reasonably be expected
to
have a Material Adverse Effect. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to each Closing
Date, and the Company and its Subsidiaries are unaware of any facts or
circumstances which might prevent the Company from obtaining or effecting any
of
the registration, application or filings pursuant to the preceding
sentence.
(f) Acknowledgment
Regarding Buyer's Purchase of Securities. The Company acknowledges that no
Buyer
is acting as a financial advisor or fiduciary of the Company or any of its
subsidiaries (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with
the
Transaction Documents and the transactions contemplated hereby and thereby
is
merely incidental to such Buyer's purchase of the Securities. The Company
further represents to each Buyer that the Company's decision to enter into
the
Transaction Documents has been based solely on the independent evaluation by
the
Company and its representatives.
(g) No
General Solicitation. Neither the Company nor any Person acting on its behalf,
has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offer or sale of the
Securities.
(h) No
Integrated Offering. Neither the Company nor any Person acting on its behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of any of the Securities under the 1933 Act or cause this offering
of the Securities to be integrated with prior offerings by the Company for
purposes of the 1933 Act or any applicable equityholder approval provisions,
including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company
are
listed or designated.
(i) Form
S-3
Eligibility. The Company is eligible to register the Conversion Units for resale
by the Buyers using Form S-3 promulgated under the 1933 Act.
(j) Rule
144A. The Notes satisfy the requirements set forth in Rule l44A(d)(3) under
the
1933 Act.
(k) Trust
Indenture Act. Assuming the accuracy of the representations of the Buyers
contained in Section 2 hereof and their compliance with the agreements set
forth
therein, it is not necessary in connection with the offer, sale and delivery
of
the Securities in the manner contemplated by this Agreement to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "TIA").
(l) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion
Units issuable upon conversion of the Notes will increase in certain
circumstances. The Company further acknowledges that its obligation to issue
Conversion Units upon
-8-
conversion
of the Notes in accordance with this Agreement, the Indenture and the Notes,
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other equityholders of the
Company.
(m) Application
of Takeover Protections; Poison Pill. The Company and its general partner have
taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Certificate of Limited Partnership, the Company's Limited Partnership Agreement
or the laws of the State of Delaware which is or could become applicable to
any
Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company's issuance of the Securities and any Buyer's
ownership of the Securities. The Company has not adopted a poison pill or
similar arrangement relating to accumulations of beneficial ownership of Units
or a change in control of the Company.
(n) SEC
Documents; Financial Statements. During the two (2) years up to and including
the date hereof, the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the foregoing filed during
the 12 months prior to the applicable Closing Date, including all documents
incorporated by reference therein being hereinafter referred to as the
"SEC
Documents").
As of
their respective dates, the SEC Documents complied in all material respects
with
the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in
the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with
respect thereto. Such financial statements have been prepared in accordance
with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal year-end audit adjustments).
(o) Absence
of Certain Changes. Except as disclosed in the SEC Documents or in Schedule
3(o), since December 31, 2006, there has been no material adverse change and
no
material adverse development in the business, assets, properties, operations,
condition (financial or otherwise) or results of operations of the Company
or
its subsidiaries, taken as a whole. The Company has not has taken any steps
to
seek protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company and its subsidiaries, on a
consolidated basis, are not as of the date hereof, and after giving effect
to
the transactions contemplated hereby to occur at each Closing, will not be
Insolvent (as defined below). For purposes of this Section 3(o), "Insolvent"
means,
with respect to any Person (i) the present fair saleable value of the such
Person's assets is less than the amount required to pay such Person's total
Indebtedness (as defined in Section 3(v)), (ii) such Person is unable to pay
its
debts and liabilities, subordinated,
-9-
contingent
or otherwise, as such debts and liabilities become absolute and matured, (iii)
such Person intends to incur or believes that it will incur debts that would
be
beyond its ability to pay as such debts mature or (iv) such Person has
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be
conducted.
(p) Conduct
of Business; Regulatory Permits. The Company is not in violation of any term
of
or in default under its Certificate of Limited Partnership or Limited
Partnership Agreement. The Company is not in violation of any judgment, decree
or order or any statute, ordinance, rule or regulation applicable to the
Company, except for possible violations which would not, individually or in
the
aggregate, reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of
any
of the rules, regulations or requirements of the Principal Market except for
violations which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Since December 31, 2004 (i) the
Units has been designated for quotation on the Principal Market, (ii) trading
in
the Units has not been suspended by the SEC or the Principal Market and (iii)
the Company has received no written communication from the SEC or the Principal
Market regarding the suspension or delisting of the Units from the Principal
Market.
(q) Foreign
Corrupt Practices. Neither the Company, nor any director, officer, agent,
employee or other Person acting on behalf of the Company, in the course of
its
actions for, or on behalf of, the Company, has (i) used any partnership funds
for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
partnership funds; (iii) violated or is in violation of any provision of the
U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
(r) Money
Laundering. The operations of the Company are and have been conducted at all
times in compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as
amended, applicable money laundering statutes and applicable rules and
regulations thereunder (collectively, the "Money
Laundering Laws"),
and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(s) OFAC.
Neither the Company nor, to the knowledge of the Company, any director, officer,
agent or employee of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC");
and
the Company will not, directly or indirectly, use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered
by
OFAC.
(t) Sarbanes-Oxley
Act. There is and has been no failure on the part of the Company, the Company's
general partner or any of the Company's directors or officers, in their
capacities as such, to comply in all material respects with any provision of
the
Sarbanes-Oxley Act of
-10-
2002,
as
in effect at the applicable time, and the rules and regulations promulgated
in
connection therewith (the "Sarbanes-Oxley
Act"),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(u) Internal
Accounting and Disclosure Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset and liability accountability, (iii)
access to assets or incurrence of liabilities is permitted only in accordance
with management's general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any difference. The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the 1934 Act) that
are
effective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the
rules and forms of the SEC, including, without limitation, controls and
procedures designed in to ensure that information required to be disclosed
by
the Company in the reports that it files or submits under the 1934 Act is
accumulated and communicated to the Company's management, including its
principal executive officer or officers and its principal financial officer
or
officers, as appropriate, to allow timely decisions regarding required
disclosure. Except as set forth on Schedule 3(u), during the twelve months
prior
to the date hereof, the Company has not received any notice or correspondence
from its independent accountant relating to any potential material weakness
in
any part of the system of internal accounting controls of the
Company.
(v) Equity
Capitalization. As of the date hereof, the authorized equity securities of
the
Company consists of (i) 69,358,353 Units, of which as of the date hereof,
61,856,830 are issued and outstanding, 1,137,200 Units are issued and held
as
treasury units, no Units are reserved for issuance pursuant to the Company's
option and purchase plans and no Units are reserved for issuance pursuant to
securities (other than the Notes) exercisable or exchangeable for, or
convertible into, Units and (ii) 12,100,000 preferred units, of which as of
the
date hereof, 11,907,073 of which is issued and outstanding or reserved for
issuance. The Conversion Units shall have those rights, preferences, privileges
and restrictions governing the Units as set forth in the Limited Partnership
Agreement. All of such outstanding Units have been validly issued. Except as
disclosed in Schedule 3(v): (i) none of the Company's equity securities is
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into,
or
exercisable or exchangeable for, any equity securities of the Company, or
contracts, commitments, understandings or arrangements by which the Company
is
or may become bound to issue additional equity securities of the Company or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into,
or
exercisable or exchangeable for, any equity securities of the Company; (iii)
there are no agreements or arrangements under which the Company is obligated
to
register the sale of any of its equity securities under the 1933 Act (except
pursuant to the Registration Rights Agreement); (iv) there are no outstanding
equity securities of the Company which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company is or may become bound to redeem an equity
security of the Company; (v) there are no equity securities containing
anti-dilution or similar provisions that will be triggered by the issuance
of
the Securities; and (vi) the
-11-
Company
does not have any stock appreciation rights or "phantom stock" or "phantom
equity" plans or agreements or any similar plan or agreement.
(w) Absence
of Litigation. Except as set forth in Schedule 3(w) and as set forth in the
"Risk Factors" and "Legal Proceedings" sections of the Company's Annual Report
on Form 10-K/A for the fiscal year ended December 31, 2006, there is no action,
suit, proceeding, inquiry or investigation before or by the Principal Market,
any court, public board, government agency, self-regulatory organization or
body
pending or, to the knowledge of the Company, threatened against or affecting
the
Company, the Units or any of the Company's officers or directors in their
capacities as such, whether of a civil or criminal nature of otherwise which
could reasonably be expected to have a Material Adverse Effect.
(x) Tax
Status. The Company (i) has made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject except where the failure to so file could not reasonably
be expected to have a Material Adverse Effect, (ii) has paid all taxes and
other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith except where failure to pay such taxes could
not
reasonably be expected to have a Material Adverse Effect and (iii) to the extent
required by GAAP, has set aside on its books provision reasonably adequate
for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company have not received written notice of any such
claim.
(y) Ranking
of Notes. Except as set forth on Schedule 3(y), no Indebtedness of the Company
is expressly senior to the Notes in right of payment, whether with respect
of
payment of redemptions, interest, damages or upon liquidation or dissolution
or
otherwise.
(z) Independent
Accountants. Grant Thornton LLP, who have certified the consolidated financial
statements of the Company as of December 31, 2006, are independent public
accountants within the meaning of the 1933 Act.
(aa) Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other
relationship between the Company and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise would be reasonably likely
to
have a Material Adverse Effect.
(bb) Investment
Company. The Company is not and, after giving effect to the offering and sale
of
the Securities and the application of the proceeds thereof, will not become
an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for an investment company, within the meaning of the Investment
Company Act of 1940, as amended.
(cc) Manipulation
of Price. The Company has not, and to its knowledge no one acting on its behalf
has, taken, directly or indirectly, any action designed to cause or to result
in
the stabilization or manipulation of the price of any security of the Company
to
facilitate the sale or resale of any of the Securities.
-12-
(dd) Transfer
Taxes. On each applicable Closing Date, all stock transfer or other taxes (other
than income or similar taxes) which are required to be paid in connection with
the sale and transfer of the Securities to be sold to each Buyer hereunder
will
be, or will have been, fully paid or provided for by the Company, and all laws
imposing such taxes will be or will have been complied with.
(ee) Disclosure.
All disclosure provided to the Buyers regarding the Company and its
Subsidiaries, their business and the transactions contemplated hereby,
considered as a whole, including the Schedules to this Agreement, furnished
by
or on behalf of the Company is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or its business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed.
(ff) MLP
Status. The Company met for the taxable year ended December 31, 2005, and the
Company expects to meet for the taxable years ending December 31, 2006 and
December 31, 2007, the gross income requirements of Section 7704(c)(2) of the
Code, and accordingly the Company does not reasonably expect to be, taxed as
a
corporation for U.S. federal income tax purposes or for applicable tax purposes.
The Company indicated in the Form K-1 for the year ended December 31, 2006,
that
its equityholders may be subject to state income taxes in the jurisdictions
set
forth on Schedule 3(ff) attached hereto.
4. COVENANTS.
(a) Best
Efforts. Each party shall use its best efforts timely to satisfy each of the
conditions to be satisfied by it as provided in Sections 5 and 6 of this
Agreement.
(b) Form
D
and Blue Sky. The Company agrees to file a Form D with respect to the Securities
as required under Regulation D. The Company shall, on or before each Closing
Date, take such action as the Company shall reasonably determine is necessary
in
order to obtain an exemption for or to qualify the Securities for sale to the
Buyers at such Closing pursuant to this Agreement under applicable securities
or
"Blue Sky" laws of the states of the United States (or to obtain an exemption
from such qualification). The Company shall make all filings and reports
relating to the offer and sale of the Securities required under applicable
securities or "Blue Sky" laws of the states of the United States following
the
applicable Closing Date.
(c) Financial
Information. For so long as any Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the 1933
Act,
the Company will, during any period in which it is not subject to Section 13
or
15(d) under the 1934 Act, make available to each Buyer and any holder of
Securities in connection with any sale thereof and any prospective purchaser
of
Securities and securities analysts, in each case upon request, the information
specified in, and meeting the requirements of, Rule 144A(d)(4) under the 1933
Act (or any successor thereto).
(d) Fees
and
Expenses.
(i) The
Company shall be responsible for the payment of any placement agent's fees
or
commissions, financial advisory fees, or broker's commissions
-13-
(other
than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney's fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment. In addition to the foregoing (and
without duplication), the Company agrees to pay Portside Growth &
Opportunity Fund (an Initial Buyer) ("Portside") or
its
designee(s) for all reasonable costs and expenses, not to exceed $275,000,
incurred in connection with the transactions contemplated by the Transaction
Documents (including all reasonable legal fees and disbursements in connection
therewith, documentation and implementation of the transactions contemplated
by
the Transaction Documents and due diligence in connection therewith), which
amount may be withheld by Portside from its Initial Notes Purchase Price at
the
Initial Closing. Except as otherwise set forth in the Transaction Documents,
each party to this Agreement shall bear its own expenses in connection with
the
sale of the Securities to the Buyers.
(ii) Whether
or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, the Company shall pay or cause to be paid all costs
and
expenses incident to the performance of its obligations hereunder, including
without limitation, all fees, costs and expenses (A) incident to the
preparation, issuance, execution, authentication and delivery of the Securities,
including any expenses of the Trustee, (B) incurred in connection with the
registration or qualification and determination of eligibility for investment
of
the Securities under the laws of such jurisdictions as the Buyers may reasonably
designate, (C) in connection with the admission for trading of the Notes on
any
securities exchange or inter-dealer quotation system (as well as in connection
with the admission of the Notes for trading in the Private Offerings, Resales
and Trading through Automatic Linkages ("PORTAL")
system
of the National Association of Securities Dealers, Inc. ("NASD") or
any
appropriate market system) and (D) in connection with satisfying its obligations
under Section 4(b).
(e) Pledge
of
Securities. The Company acknowledges and agrees that the Securities may be
pledged by a Holder (as defined in the Registration Rights Agreement) in
connection with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and no Buyer effecting a pledge of Securities shall be required to provide
the
Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document. The Company hereby
agrees to execute and deliver such documentation as a pledgee of the Securities
may reasonably request in connection with a pledge of the Securities to such
pledgee by a Buyer.
(f) Disclosure
of Transactions and Other Material Information. On or before 8:30 a.m., New
York
Time, on April
5,
2007, the Company shall issue a press release (the "Initial
Press Release")
and
file a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934
Act
and attaching the Transaction Documents as exhibits to such filing (including
all attachments, the "Initial
8-K Filing").
On or
before 8:30 a.m., New York City Time, on the first Business Day following each
Additional Closing Date, the Company shall issue a press release (each an
"Additional
Press Release",
and
together with the Initial Press Release the "Press
Releases")
and
file a Current Report on Form 8-K with the SEC describing the
-14-
transactions
to be consummated pursuant thereto (the "Additional
8-K Filing,"
and
together with the Initial 8-K Filing, the "8-K
Filings").
The
Company shall not, and shall cause its officers, directors, employees and
agents, not to, provide any Buyer with any material, nonpublic information
regarding the Company or any of its subsidiaries from and after the filing
of
the Initial 8-K Filing with the SEC without the express written consent of
such
Buyer. Subject to the foregoing, neither the Company, its Subsidiaries nor
any
Buyer shall issue any press releases or any other public statements with respect
to the transactions contemplated hereby; provided, however, that the Company
shall be entitled, without the prior approval of any Buyer, to make any press
release or other public disclosure with respect to such transactions (i) in
substantial conformity with the 8-K Filings and contemporaneously therewith
and
(ii) as is required by applicable law and regulations (provided that in the
case
of clause (i) each Buyer shall be consulted by the Company in connection with
any such press release or other public disclosure prior to its release). Without
the prior written consent of any applicable Buyer, other than in the 8-K Filings
and the Press Releases (which shall be subject to the reasonable approval of
the
Initial Buyers), neither the Company nor any of its subsidiaries or affiliates
shall disclose the name of such Buyer in any public filing, public announcement,
press release or similar public disclosure, unless such disclosure is required
by law, regulation or the Principal Market.
(g) Additional
Notes. For so long as any Notes remain outstanding, the Company will not issue
any Notes under the Indenture other than as contemplated hereby and
thereby.
(h) Reservation
of Units. The Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, free of pre-emptive
rights, after the Initial Closing Date, a number of
Units
sufficient for the purpose of enabling the Company to satisfy all obligations
to
issue the Conversion Units upon
conversion of all of the outstanding Notes.
(i) Regulation
M. The Company will not take any action prohibited by Regulation M under the
1934 Act, in connection with the distribution of the Securities contemplated
hereby.
(j) General
Solicitation. Neither the Company nor any person acting on behalf of the Company
will solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising within the meaning of
Regulation D, including: (i)
any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio;
and
(ii)
any
seminar or meeting whose attendees have been invited by any general solicitation
or general advertising.
(k) Integration.
Neither the Company nor any person acting on behalf of the Company will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of
any
security (as defined in the 1933 Act) which will be integrated with the sale
of
the Securities or the Conversion Units in a manner which would require the
registration under the 1933 Act of the Securities or
require equityholder approval under the rules and regulations of the
Principal
Market.
(l) Lock-Up.
-15-
(i) For
purposes of this Section 4(l), the following definitions shall
apply.
(1) "Convertible
Securities"
means
any stock or securities (other than Options) convertible into or exercisable
or
exchangeable for Units or other equity securities of the Company.
(2) "Options"
means
any rights, warrants or options to subscribe for or purchase Units, other equity
securities of the Company or Convertible Securities.
(3) "Unit
Equivalents"
means,
collectively, Options and Convertible Securities.
(4) From
the
date hereof until the date that is ninety (90) days following the Initial
Closing Date, the Company hereby agrees that, it will not sell, agree to sell,
or contract to sell, any Units or any Unit Equivalents. The foregoing sentence
shall not apply to (A) the sale of the Notes as contemplated by this Agreement
or the issuance of the Conversion Units, (B) in connection with any employee
benefit plan which has been approved by the Board of Directors of the general
partner of the Company, pursuant to which the Company's securities may be issued
to any employee, officer or director for services provided to the Company,
(C)
the issuance by the Company of any Units upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof (provided
that the terms relating to pricing or the number of Units issuable upon exercise
of such options or warrants are not amended or modified in any manner after
the
date hereof) or an option or warrant issued or granted in compliance with this
paragraph, (D) the sale of Units in a bona fide firm commitment
underwritten offering with a nationally recognized underwriter if the price
per
share in such offering exceeds 115% of the Conversion Price (other than an
"at-the-market offering" as defined in Rule 415(a)(4) under the 1933 Act and
"equity lines"); (E) the entry into an agreement to issue and the issuance
of, Units, other equity securities of the Company or Unit Equivalents in
exchange for assets or equity securities of another entity to be acquired by
the
Company, the
primary purpose of which is not to raise equity capital
and (F)
the issuance of preferred units distributed as dividends on preferred units
which are currently outstanding. In addition, the Company agrees to obtain
lock-up agreements with each of its executive officers and directors who own
equity securities of the Company in substantially the form attached hereto
as
Exhibit
G.
5. CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL.
(a) Initial
Closing Date. The obligation of the Company hereunder to issue and sell the
Initial Notes to each Initial Buyer at the Initial Closing is subject to the
satisfaction, at or before the Initial Closing Date, of each of the following
conditions, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Initial Buyer with prior written notice thereof:
(i) Such
Initial Buyer shall have executed each of the Transaction Documents to which
it
is a party and delivered the same to the Company.
-16-
(ii) Such
Initial Buyer and each other Initial Buyer shall have delivered to the Company
the Initial Notes Purchase Price (less any amounts withheld pursuant to Section
4(d)) for the Initial Notes being purchased by such Initial Buyer at the Initial
Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.
(iii) The
representations and warranties of such Initial Buyer shall be true and correct
in all material respects as of the date when made and as of the Initial Closing
Date as though made at that time (except for representations and warranties
that
speak as of a specific date), and such Initial Buyer shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by such Initial Buyer at or prior to the Initial Closing Date.
(b) Additional
Closing Dates. The obligation of the Company hereunder to issue and sell
Additional Notes to each of the applicable Additional Buyers at each Additional
Closing is subject to the satisfaction, at or before the applicable Additional
Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing each Additional Buyer with
prior
written notice thereof:
(i) Such
Additional Buyer and each other applicable Additional Buyer shall have delivered
to the Company the purchase price contemplated pursuant to Section 1(d) for
the
Additional Notes being purchased by such Additional Buyer at such Additional
Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.
(ii) The
representations and warranties of such Additional Buyer shall be true and
correct in all material respects as of the date when made and as of such
Additional Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date), and such Additional Buyer
shall have performed, satisfied and complied in all material respects with
the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by such Additional Buyer at or prior to such
Additional Closing Date.
6. CONDITIONS
TO EACH BUYER'S OBLIGATION TO PURCHASE.
(a) Initial
Closing Date. The obligation of each Initial Buyer hereunder to purchase the
Initial Notes at
the
Initial Closing is subject to the satisfaction, at or before the Initial Closing
Date, of each of the following conditions, provided that these conditions are
for each Initial Buyer's sole benefit and may be waived by such Initial Buyer
at
any time in its sole discretion by providing the Company with prior written
notice thereof:
(i) The
Company shall have executed and delivered to such Initial Buyer (i) each of
the Transaction Documents and (ii) the Initial Notes (for the
-17-
account
of such Initial Buyer as such Initial Buyer shall instruct) being purchased
by
such Initial Buyer at the Initial Closing pursuant to this
Agreement.
(ii) Such
Initial Buyer shall have received the opinion of Proskauer Rose LLP, the
Company's outside counsel, dated as of the Initial Closing Date, in
substantially the form of Exhibit
D
attached
hereto.
(iii) The
Company shall have delivered to such Initial Buyer a certificate evidencing
the
formation and good standing of the Company issued by the Secretary of State
of
Delaware, as of a date within ten (10) days of the Initial Closing
Date.
(iv) The
Company shall have delivered to such Initial Buyer a certificate evidencing
the
Company's qualification as a foreign entity and good standing issued by the
Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business and is required to so qualify, as of a date within
ten
(10) days of the Initial Closing Date.
(v) The
Company shall have delivered to such Initial Buyer a certified copy of the
Certificate of Limited Partnership as certified by the Secretary of State of
the
State of Delaware within ten (10) days of the Initial Closing Date.
(vi) The
Company shall have delivered to such Initial Buyer a certificate, executed
by
the Secretary of the general partner of the Company and dated as of the Initial
Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted
by the Company's general partner in a form reasonably acceptable to such Initial
Buyer, (ii) the Certificate of Limited Partnership and (iii) the Limited
Partnership Agreement, each as in effect at the Initial Closing, in the form
attached hereto as Exhibit E.
(vii) The
representations and warranties of the Company shall be true and correct in
all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Initial Closing
Date as though made at that time (except for representations and warranties
that
speak as of a specific date, which shall be true and correct as of such
specified date) and the Company shall have performed, satisfied and complied
in
all material respects with the covenants, agreements and conditions required
by
the Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to the Initial Closing Date. Such Initial Buyer shall have
received a certificate, executed by the President of the general partner of
the
Company, dated as of the Initial Closing Date, to the foregoing effect in the
form attached hereto as Exhibit
F.
(viii) The
Company shall have delivered to such Initial Buyer a letter from the Company's
transfer agent certifying the number of Units outstanding as of a date within
five (5) days of the Initial Closing Date.
-18-
(ix) The
Units
(i) shall be designated for quotation or listed on the Principal Market and
(ii)
shall not have been suspended, as of the Initial Closing Date, by the SEC or
the
Principal Market from trading on the Principal Market nor shall suspension
by
the SEC or the Principal Market have been threatened, as of the Initial Closing
Date, either (1)
in
writing by the SEC or the Principal Market or (2)
by
falling below the minimum listing maintenance requirements of the Principal
Market.
(x) The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.
(xi) The
Notes
shall have been approved for trading on PORTAL, subject only to notice of
issuance at or prior to the time of purchase.
(xii) The
Company shall have delivered to such Initial Buyer lock-up agreements with
each
of the Company's executive officers and directors who own equity in the Company
in substantially the form attached hereto as Exhibit
G.
(b) Additional
Closing Dates. The obligation of each Additional Buyer hereunder to purchase
the
Additional Notes at each Additional Closing is subject to the satisfaction,
at
or before the applicable Additional Closing Date, of each of the following
conditions, provided that these conditions are for each applicable Additional
Buyer's sole benefit and may be waived by such Additional Buyer at any time
in
its sole discretion by providing the Company with prior written notice
thereof:
(i) The
Company shall have executed and delivered to such Additional Buyer the
Additional Notes (for the account of such Additional Buyer as such Additional
Buyer shall instruct), which are being purchased by such Additional Buyer at
such Additional Closing pursuant to this Agreement.
(ii) Such
Additional Buyer shall have received the opinion of Proskauer Rose LLP, the
Company's outside counsel, dated as of such Additional Closing Date, in
substantially the form of Exhibit
D
attached
hereto.
(iii) The
Company shall have delivered to such Additional Buyer a certificate evidencing
the formation and good standing of the Company issued by the Secretary of State
of Delaware, as of a date within ten (10) days of such Additional Closing
Date.
(iv) The
Company shall have delivered to such Additional Buyer a certificate evidencing
the Company's qualification as a foreign entity and good standing issued by
the
Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business and is required to so qualify, as of a date within
ten
(10) days of such Additional Closing Date.
(v) The
Company shall have delivered to such Additional Buyer a certified copy of the
Certificate of Limited Partnership as certified by the Secretary of State of
the
State of Delaware within ten (10) days of such Additional Closing
Date.
-19-
(vi) The
Company shall have delivered to such Additional Buyer a certificate, executed
by
the Secretary of the general partner of the Company and dated as of such
Additional Closing Date, as to (i) the resolutions consistent with Section
3(b)
as adopted by the Company's general partner in a form reasonably acceptable
to
such Additional Buyer, (ii) the Certificate of Limited Partnership and (iii)
the
Limited Partnership Agreement, each as in effect at such Additional Closing,
in
the form attached hereto as Exhibit
E.
(vii) The
representations and warranties of the Company shall be true and correct in
all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of such Additional
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to such Additional Closing
Date. Such Additional Buyer shall have received a certificate, executed by
the
President of the general partner of the Company, dated as of such Additional
Closing Date, to the foregoing effect in the form attached hereto as
Exhibit
F.
(viii) The
Company shall have delivered to such Additional Buyer a letter from the
Company's transfer agent certifying the number of Units outstanding as of a
date
within five days of such Additional Closing Date.
(ix) The
Units
(I) shall be designated for quotation or listed on the Principal Market and
(II)
shall not have been suspended, as of such Additional Closing Date, by the SEC
or
the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of such Additional
Closing Date, either (A) in writing by the SEC or the Principal Market or (B)
by
falling below the minimum maintenance requirements of the Principal
Market.
(x) The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.
(xi) No
Event
of Default (as defined in the Notes) shall have occurred and be
continuing.
(xii) The
Notes
to be issued at such Additional Closing shall have been approved for trading
on
PORTAL, subject only to notice of issuance at or prior to the time of purchase.
7. TERMINATION.
In
the
event that the Initial Closing shall not have occurred with respect to an
Initial Buyer on or before five (5) Business Days from the date hereof due
to
the Company's or such Initial Buyer's failure to satisfy the conditions set
forth in Sections 5 and 6 above (and the nonbreaching party's failure to waive
such unsatisfied condition(s)), the nonbreaching party shall have the option
to
terminate this Agreement with respect to such breaching party at the close
of
business on such date without liability of any party to any other party;
provided,
however,
that
if
-20-
this
Agreement is terminated pursuant to this Section 8, (a) the Company shall remain
obligated to reimburse the non-breaching Initial Buyers for the expenses
described in Section 4(d) above, and (b) such termination shall not relieve
any
party from any liability it may have resulting from such party's breach of
this
Agreement prior to such termination.
8. MISCELLANEOUS.
(a) Governing
Law; Jurisdiction; Jury Trial. 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,
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.
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 WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature shall be considered due execution
and
shall be binding upon the signatory thereto with the same force and effect
as if
the signature were an original, not a facsimile signature.
(c) Headings.
The headings of this Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Agreement.
(d) Severability.
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.
(e) Entire
Agreement; Amendments. This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between the Buyers, the
Company, their affiliates and Persons acting on their behalf with respect to
the
matters contemplated hereby, and this Agreement, the other Transaction Documents
and the instruments referenced herein and therein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation,
-21-
warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least a majority of the aggregate principal amount
of the Notes issued and issuable hereunder, and any amendment to this Agreement
made in conformity with the provisions of this Section 9(e) shall be binding
on
all Buyers and holders of Notes, as applicable. No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought. No such amendment shall be effective to the extent that
it applies to less than all of the holders of the applicable Securities then
outstanding. No consideration shall be offered or paid to any Person to amend
or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties
to
the Transaction Documents or holders of Notes, as the case may be. The Company
has not, directly or indirectly, made any agreements with any Buyers relating
to
the terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents.
(f) Notices.
Any notices, consents, waivers or other communications required or permitted
to
be given under the terms of this Agreement must be in writing and will be deemed
to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party
and a duplicate copy is sent by electronic mail in PDF format); or (iii) one
Business Day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If
to the
Company:
American
Real Estate Partners, L.P.
767
Fifth
Avenue
New
York,
New York 10153
Telephone:
(914)
614-7077
Facsimile:
(646)
365-2833
Email:
fbuebel@arep.com
Attention:
Felicia
Buebel
Copy
to:
Proskauer
Rose LLP
1585
Broadway
New
York,
New York 10036-8299
Telephone:
(212)
969-3580
Facsimile:
(212)
969-2900
Email:
iblumenstein@proskauer.com
Attention:
Ian
B.
Blumenstein
If
to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
with copies to such Buyer's representatives as set forth on the Schedule of
Buyers,
-22-
with
a
copy (for informational purposes only) to:
Schulte
Roth & Zabel LLP
919
Third
Avenue
New
York,
New York 10022
Telephone:
(212)
756-2000
Facsimile:
(212)
593-5955
Email:
eleazer.klein@srz.com
Attention:
Eleazer
N. Klein, Esq.
or
to
such other address and/or facsimile number and/or to the attention of such
other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
(g) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of
the parties and their respective successors and assigns, including any
purchasers of the Notes. The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the holders
of at least a majority of the aggregate principal amount of the Notes issued
and
issuable hereunder. A Buyer may assign some or all of its rights hereunder
without the consent of the Company (other than any portion of the First Option
and Second Option to purchase Additional Notes, which may only be assigned
to
the investment advisor, or funds managed by the investment advisor or parent
of
the investment advisor, of each Initial Buyer), in which event such assignee
shall be deemed to be a Buyer hereunder with respect to such assigned rights.
(h) No
Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for
the
benefit of, nor may any provision hereof be enforced by, any other
Person.
(i) Survival.
Unless this Agreement is terminated under Section 8, the representations and
warranties of the Company and the Buyers contained in Sections 2 and 3 and
the
agreements and covenants set forth in Sections 4 and 9 shall survive the each
Closing and delivery and exercise of the Securities, as applicable. Each Buyer
shall be responsible only for its own representations, warranties, agreements
and covenants hereunder.
(j) Further
Assurances. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated
hereby.
(k) Indemnification.
ii) In
consideration of each Buyer's execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of
the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect,
-23-
indemnify
and hold harmless each Buyer and each other holder of the Securities and all
of
their stockholders, partners, members, officers, directors, employees and direct
or indirect investors (to the extent the Buyer has transferred Securities to
such investors) and any of the foregoing Persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees"),
as
incurred, from and against any and all actions, causes of action, suits, claims,
losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party
to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to
(a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents, (b) any breach of any covenant, agreement
or obligation of the Company contained in the Transaction Documents or (c)
any
cause of action, suit or claim brought or made against such Indemnitee by a
third party (including for these purposes a derivative action brought on behalf
of the Company) and arising out of or resulting from the execution, delivery,
performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment
and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
(ii) Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the
commencement of any action or proceeding (including any governmental action
or
proceeding) involving an Indemnified Liability, such Indemnitee shall, if a
claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 9(k), deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so
desires, to assume control of the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of
not
more than one counsel for all Indemnitees to be paid by the indemnifying party,
if, in the reasonable opinion of counsel to the Indemnitee, the representation
by such counsel of the Indemnitee and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnitee and any other party represented by such counsel in such proceeding.
Legal counsel referred to in the immediately preceding sentence shall be
selected by the Buyers holding at least a majority of the aggregate principal
amount of the Notes issued and issuable hereunder. The Indemnitee shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Indemnified Liabilities by the indemnifying
party and shall furnish to the indemnifying party all information reasonably
available to the Indemnitee that relates to such action or Indemnified
Liabilities. The indemnifying party shall keep the Indemnitee fully apprised
at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of
any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnitee, which consent shall not be unreasonably
withheld conditioned or delayed, consent to entry of any judgment or enter
into
any settlement or other
-24-
compromise
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee of a release from all liability in
respect to such Indemnified Liabilities or litigation. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made.
The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnitee under this Section 9(k), except to
the
extent that the indemnifying party is prejudiced in its ability to defend such
action.
(iii) The
indemnification required by this Section 9(k) shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as
and
when bills are received or Indemnified Liabilities are incurred.
(iv) The
indemnity agreements contained herein shall be in addition to (x) any cause
of
action or similar right of the Indemnitee against the indemnifying party or
others, and (y) any liabilities the indemnifying party may be subject to
pursuant to the law.
(v) Notwithstanding
the foregoing, in no event shall the Company be liable to any Indemnitee for
any
consequential, special, punitive or other indirect damages.
(l) No
Strict
Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules
of
strict construction will be applied against any party.
(m) 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 and the Company acknowledges that the Buyers are not
acting in concert or as a group, and the Company will not assert any such claim,
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
specifically set forth 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.
[Signature
Page Follows]
-25-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase 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:
|
[Signature
Page to Securities Purchase Agreement]
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
BUYERS:
|
|
PORTSIDE
GROWTH AND OPPORTUNITY FUND
By:
______________________________
Name:
Title:
|
[Signature
Page to Securities Purchase Agreement]
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
BUYERS:
|
|
HIGHBRIDGE
INTERNATIONAL LLC
By:
HIGHBRIDGE CAPITAL MANAGEMENT, LLC
By:
______________________________
Name:
Adam J. Chill
Title:
Managing Director
|
[Signature
Page to Securities Purchase Agreement]
SCHEDULE
OF BUYERS
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(5)
|
|||||
|
Buyer
|
Address
and
Facsimile
Number
|
Aggregate
Principal Amount of
Initial
Notes
|
Purchase
Price
|
Aggregate
Principal Amount of Additional Notes
|
Legal
Representative's
Address
and Facsimile Number
|
|||||
|
Initial
Buyers
|
||||||||||
|
Portside
Growth and Opportunity Fund
|
c/o
Ramius Capital Group, LLC
666
Third Avenue, 26th Floor
New
York, New York 10017
Attention:
Jeffrey Smith
Owen
Littman
Facsimile: (212)
845-7999
Telephone:
(212) 845-7955
Email:
jsmith@ramius.com
olittman@ramius.com
Residence:
Cayman
Islands
|
$100,000,000
|
$100,000,000
|
Schulte
Roth & Zabel LLP
919
Third Avenue
New
York, New York 10022
Attention:
Eleazer Klein, Esq.
Facsimile:
(212) 593-5955
Telephone:
(212) 756-2376
|
||||||
|
Highbridge
International LLC
|
c/o
Highbridge Capital
Management,
LLC
9
West 57th
Street, 27th
Floor
New
York, New York 10019
Attention:
Ari J. Storch
Adam
J. Chill
Facsimile:
(212) 751-0755
Telephone:
(212) 287-4720
Email:
ari.storch@hcmny.com
adam.chill@hcmny.com
Residence:
Cayman Islands
|
$100,000,000
|
$100,000,000
|
|||||||
|
Other
Buyers
|
EXHIBITS
| ExhibitA |
Indenture
|
| ExhibitB |
Registration
Rights Agreement
|
| ExhibitC |
Form
of Joinder Agreement
|
| ExhibitD |
Form
of Outside Company Counsel Opinion
|
| ExhibitE |
Form
of Secretary's Certificate
|
| ExhibitF |
Form
of Officer's Certificate
|
| ExhibitG |
Form
of Lock-Up Agreement
|
SCHEDULES
| Schedule3(o) |
Absence
of Certain Changes
|
| Schedule3(u) |
Internal
Accounting and Disclosure Controls
|
| Schedule3(v) |
Capitalization
|
| Schedule3(w) |
Litigation
|
| Schedule3(y) |
Ranking
|
| Schedule3(ff) |
MLP
Status
|
Exhibit
10.42
REGISTRATION
RIGHTS AGREEMENT
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 767 Fifth Avenue, Suite 4700,
New York, New York 10153 (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.
-2-
"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.
-3-
"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.
-4-
"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 Schulte Roth & Zabel
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.
-5-
"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.
-6-
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
-7-
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
-9-
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.
-10-
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 1933 Act) 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 1933 Act) 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.
767
Fifth
Avenue
New
York,
New York 10153
Telephone:
(914)
614-7077
Facsimile:
(646)
365-2833
Email:
fbuebel@arep.com
Attention:
Felicia
Buebel
With
a
copy to:
Proskauer
Rose LLP
1585
Broadway
New
York,
New York 10036-8299
Telephone:
(212) 969-3580
Facsimile:
(212) 969-2900
Email:
iblumenstein@proskauer.com
Attention:
Ian B. Blumenstein
(iv) if
to
Legal Counsel, to:
Schulte
Roth & Zabel LLP
919
Third
Avenue
New
York,
New York 10022
Telephone:
(212)
756-2000
Facsimile:
(212)
593-5955
Email:
eleazer.klein@srz.com
Attention:
Eleazer
N. Klein, 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:
Adam J. 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
767
Fifth
Avenue, Suite 4700
New
York,
New York 10153
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. Peter A. Cohen, Morgan
B.
Stark, Thomas W. Strauss and Jeffrey M. Solomon are the sole managing members
of
C4S& Co., LLC, the sole managing member of Ramius Capital. As a result,
Messrs. Cohen, Stark, Strauss and Solomon may be considered beneficial
owners of
any units deemed to be beneficially owned by Ramius Capital. Messrs. Cohen,
Stark, Strauss and Solomon 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. Glenn Dubin and Henry Swieca 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, Glenn Dubin and Henry Swieca 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
Exhibit
10.43
AMERICAN
REAL ESTATE PARTNERS, L.P.
AMERICAN
REAL ESTATE FINANCE CORP.
AND
AMERICAN
REAL ESTATE HOLDINGS LIMITED PARTNERSHIP, AS GUARANTOR
VARIABLE
RATE SENIOR CONVERTIBLE NOTES DUE 2013
INDENTURE
Dated
as
of April 5, 2007
WILMINGTON
TRUST COMPANY
Trustee
CROSS-REFERENCE
TABLE*
|
Trust
Indenture
Act
Section
|
Indenture
Section
|
|
310(a)(1)
|
7.10
|
|
(a)(2)
|
7.10
|
|
(a)(3)
|
N.A.
|
|
(a)(4)
|
N.A.
|
|
(a)(5)
|
7.10
|
|
(b)
|
7.10
|
|
(c)
|
N.A.
|
|
311(a)
|
7.11
|
|
(b)
|
7.11
|
|
(c)
|
N.A.
|
|
312(a)
|
2.05
|
|
(b)
|
16.03
|
|
(c)
|
16.03
|
|
313(a)
|
7.06
|
|
(b)(2)
|
7.06;
7.07
|
|
(c)
|
7.06;
12.02
|
|
(d)
|
7.06
|
|
314(a)
|
4.03;16.02;
16.05
|
|
(c)(1)
|
16.04
|
|
(c)(2)
|
16.04
|
|
(c)(3)
|
N.A.
|
|
(e)
|
16.05
|
|
(f)
|
N.A.
|
|
315(a)
|
7.01
|
|
(b)
|
7.05;
16.02
|
|
(c)
|
7.01
|
|
(d)
|
7.01
|
|
(e)
|
6.11
|
|
316(a)
(last sentence)
|
2.09
|
|
(a)(1)(A)
|
6.05
|
|
(a)(1)(B)
|
6.04
|
|
(a)(2)
|
N.A.
|
|
(b)
|
6.07
|
|
(c)
|
2.12
|
|
317(a)(1)
|
6.08
|
|
(a)(2)
|
6.09
|
|
(b)
|
2.04
|
|
318(a)
|
12.01
|
|
(b)
|
N.A.
|
|
(c)
|
16.01
|
N.A.
means not applicable.
*
This
Cross Reference Table is not part of the Indenture.
TABLE
OF
CONTENTS
Page
|
ARTICLE
1
|
||
|
DEFINITIONS
AND INCORPORATION
|
||
|
BY
REFERENCE
|
||
|
Section
1.01
|
Definitions.
|
1
|
|
Section
1.02
|
Other
Definitions.
|
14
|
|
Section
1.03
|
Rules
of Construction.
|
15
|
|
ARTICLE
2
|
||
|
THE
NOTES
|
||
|
Section
2.01
|
Form
and Dating.
|
16
|
|
Section
2.02
|
Execution
and Authentication.
|
17
|
|
Section
2.03
|
Registrar
and Paying Agent.
|
18
|
|
Section
2.04
|
Paying
Agent to Hold Money in Trust.
|
18
|
|
Section
2.05
|
Holder
Lists.
|
18
|
|
Section
2.06
|
Transfer
and Exchange.
|
18
|
|
Section
2.07
|
Replacement
Notes.
|
29
|
|
Section
2.08
|
Outstanding
Notes.
|
29
|
|
Section
2.09
|
Treasury
Notes.
|
30
|
|
Section
2.10
|
Temporary
Notes.
|
30
|
|
Section
2.11
|
Cancellation.
|
30
|
|
Section
2.12
|
Defaulted
Interest.
|
31
|
|
Section
2.13
|
CUSIP
Numbers.
|
31
|
|
ARTICLE
3
|
||
|
INTEREST
|
||
|
Section
3.01
|
Interest
Rate.
|
31
|
|
ARTICLE
4
|
||
|
COVENANTS
|
||
|
Section
4.01
|
Payment
of Notes.
|
32
|
|
Section
4.02
|
Maintenance
of Office or Agency.
|
32
|
|
Section
4.03
|
Reports.
|
33
|
|
Section
4.04
|
Compliance
Certificate.
|
34
|
|
Section
4.05
|
Taxes.
|
34
|
|
Section
4.06
|
Stay,
Extension and Usury Laws.
|
35
|
|
Section
4.07
|
Dividends
Paid on Depositary Units.
|
35
|
|
Section
4.08
|
Transactions
with Affiliates.
|
35
|
|
Section
4.09
|
Corporate
Existence.
|
37
|
|
Section
4.10
|
Compliance
with Law
|
37
|
|
Section
4.11
|
No
Investment Company
|
37
|
|
ARTICLE
5
|
||
|
SUCCESSORS
|
||
|
Section
5.01
|
Merger,
Consolidation, or Sale of Assets.
|
37
|
|
Section
5.02
|
Relief
from Obligation.
|
40
|
-i-
|
ARTICLE
6
|
||
|
DEFAULTS
AND REMEDIES
|
||
|
Section
6.01
|
Events
of Default.
|
40
|
|
Section
6.02
|
Acceleration.
|
42
|
|
Section
6.03
|
Other
Remedies.
|
43
|
|
Section
6.04
|
Waiver
of Past Defaults.
|
43
|
|
Section
6.05
|
Control
by Majority.
|
43
|
|
Section
6.06
|
Limitation
on Suits.
|
44
|
|
Section
6.07
|
Rights
of Holders of Notes to Receive Payment.
|
44
|
|
Section
6.08
|
Collection
Suit by Trustee.
|
44
|
|
Section
6.09
|
Trustee
May File Proofs of Claim.
|
44
|
|
Section
6.10
|
Priorities.
|
45
|
|
Section
6.11
|
Undertaking
for Costs.
|
45
|
|
ARTICLE
7
|
||
|
TRUSTEE
|
||
|
Section
7.01
|
Duties
of Trustee.
|
46
|
|
Section
7.02
|
Rights
of Trustee.
|
47
|
|
Section
7.03
|
Individual
Rights of Trustee.
|
48
|
|
Section
7.04
|
Trustee’s
Disclaimer.
|
48
|
|
Section
7.05
|
Notice
of Defaults.
|
48
|
|
Section
7.06
|
Reports
by Trustee to Holders of the Notes.
|
48
|
|
Section
7.07
|
Compensation
and Indemnity.
|
49
|
|
Section
7.08
|
Replacement
of Trustee.
|
49
|
|
Section
7.09
|
Successor
Trustee by Merger, etc.
|
50
|
|
Section
7.10
|
Eligibility;
Disqualification.
|
50
|
|
Section
7.11
|
Preferential
Collection of Claims Against Company.
|
51
|
|
ARTICLE
8
|
||
|
COVENANT
DEFEASANCE
|
||
|
Section
8.01
|
Company
May Effect Covenant Defeasance.
|
51
|
|
Section
8.02
|
Legal
Defeasance and Discharge.
|
51
|
|
Section
8.03
|
Covenant
Defeasance.
|
51
|
|
Section
8.04
|
Conditions
to Covenant Defeasance.
|
51
|
|
Section
8.05
|
Deposited
Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.
|
52
|
|
Section
8.06
|
Repayment
to Company.
|
53
|
|
Section
8.07
|
Reinstatement.
|
53
|
|
ARTICLE
9
|
||
|
AMENDMENT,
SUPPLEMENT AND WAIVER
|
||
|
Section
9.01
|
Without
Consent of Holders of Notes.
|
54
|
|
Section
9.02
|
With
Consent of Holders of Notes.
|
55
|
|
Section
9.03
|
Revocation
and Effect of Consents.
|
56
|
|
Section
9.04
|
Notation
on or Exchange of Notes.
|
56
|
|
Section
9.05
|
Trustee
to Sign Amendments, etc.
|
57
|
|
Section
9.06
|
Amendments,
Modifications, Revisions or Supplements to Senior Notes
|
57
|
-ii-
|
|
||
|
ARTICLE
10
|
||
|
NOTE
GUARANTEES
|
||
|
Section
10.01.
|
Guarantee.
|
58
|
|
Section
10.02.
|
Limitation
on Guarantor Liability.
|
59
|
|
Section
10.03.
|
Execution
and Delivery of Note Guarantee.
|
59
|
|
Section
10.04.
|
Guarantors
May Consolidate, etc., on Certain Terms.
|
59
|
|
Section
10.05.
|
Releases.
|
60
|
|
ARTICLE
11
|
||
|
SATISFACTION
AND DISCHARGE
|
||
|
Section
11.01
|
Satisfaction
and Discharge.
|
61
|
|
Section
11.02
|
Application
of Trust Money.
|
62
|
|
ARTICLE
12
|
||
|
CONVERSION
|
||
|
Section
12.01
|
Conversion
Privilege.
|
62
|
|
Section
12.02
|
Conversion
Procedure.
|
63
|
|
Section
12.03
|
Company’s
Right to Require Conversion; Notices to Trustee.
|
63
|
|
Section
12.04
|
Selection
of Notes to be Converted
|
65
|
|
Section
12.05
|
Delivery
by Holders of Notes Subject to Forced Conversion
|
65
|
|
Section
12.06
|
Deposit
of Interest and Additional Interest.
|
66
|
|
Section
12.07
|
Delivery
of Depositary Units.
|
66
|
|
Section
12.08
|
No
Fractional Units.
|
66
|
|
Section
12.09
|
Taxes
on Conversion.
|
66
|
|
Section
12.10
|
Company
to Provide Depositary Units.
|
67
|
|
Section
12.11
|
Adjustment
of Conversion Price.
|
67
|
|
Section
12.12
|
No
Adjustment.
|
71
|
|
Section
12.13
|
Notice
of Conversion Price Adjustment
|
71
|
|
Section
12.14
|
Notice
of Certain Transactions
|
72
|
|
Section
12.15
|
Effect
of Reclassification, Consolidation, Merger or Sale on Conversion
Privilege.
|
72
|
|
Section
12.16
|
Trustee’s
Disclaimer.
|
73
|
|
Section
12.17
|
Company
Determination Final.
|
74
|
|
ARTICLE
13
|
||
|
REPURCHASE
UPON A FUNDAMENTAL CHANGE
|
||
|
Section
13.01
|
Repurchase
of Notes at Option of the Holder Upon Fundamental Change.
|
74
|
|
Section
13.02
|
Effect
of Fundamental Change Repurchase Notice
|
76
|
|
Section
13.03
|
Notes
Repurchased in Whole or in Part.
|
77
|
|
Section
13.04
|
Deposit
of Fundamental Change Repurchase Price.
|
77
|
|
Section
13.05
|
Repayment
to the Company.
|
77
|
|
ARTICLE
14
|
||
|
REPURCHASE
REQUIRED BY GAMING AUTHORITIES
|
||
|
Section
14.01
|
Redemption
Pursuant to Gaming Laws
|
78
|
|
Section
14.02
|
Notices
to Trustee
|
79
|
|
Section
14.03
|
Notice
of Redemption
|
79
|
|
Section
14.04
|
Effect
of Notice of Redemption
|
80
|
|
Section
14.05
|
Deposit
of Redemption Price
|
80
|
|
Section
14.06
|
Global
Note Redeemed in Part
|
80
|
-iii-
|
ARTICLE
15
|
||
|
MAKE-WHOLE
PREMIUM
|
||
|
Section
15.01
|
Make-Whole
Premium
|
80
|
|
Section
15.02
|
Adjustment
to the Make-Whole Premium
|
83
|
|
Section
15.03
|
Trustee’s
Disclaimer
|
84
|
|
ARTICLE
16
|
||
|
MISCELLANEOUS
|
||
|
Section
16.01
|
Trust
Indenture Act Controls
|
84
|
|
Section
16.02
|
Notices.
|
84
|
|
Section
16.03
|
Communication
by Holders of Notes with Other Holders of Notes.
|
85
|
|
Section
16.04
|
Certificate
and Opinion as to Conditions Precedent.
|
85
|
|
Section
16.05
|
Statements
Required in Certificate or Opinion.
|
86
|
|
Section
16.06
|
Rules
by Trustee and Agents.
|
86
|
|
Section
16.07
|
No
Personal Liability of Directors, Officers, Employees and
Stockholders.
|
86
|
|
Section
16.08
|
Governing
Law.
|
86
|
|
Section
16.09
|
No
Adverse Interpretation of Other Agreements.
|
87
|
|
Section
16.10
|
Successors.
|
87
|
|
Section
16.11
|
Severability.
|
87
|
|
Section
16.12
|
Counterpart
Originals.
|
87
|
|
Section
16.13
|
Table
of Contents, Headings, etc.
|
87
|
|
Section
16.14
|
Clarity.
|
87
|
|
EXHIBITS
|
||
|
Exhibit
A1
|
FORM
OF NOTE
|
|
|
Exhibit
A2
|
FORM
OF REGULATION S TEMPORARY GLOBAL NOTE
|
|
|
Exhibit
B
|
FORM
OF CERTIFICATE OF TRANSFER
|
|
|
Exhibit
C
|
FORM
OF CERTIFICATE OF EXCHANGE
|
|
|
Exhibit
D
|
FORM
OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
|
|
|
Exhibit
E
|
FORM
OF NOTATION OF GUARANTEE
|
|
|
Exhibit
F
|
FORM
OF NOTICE OF CONVERSION
|
|
|
Exhibit
G
|
FORM
OF FUNDAMENTAL CHANGE REPURCHASE NOTICE
|
|
-iv-
INDENTURE
dated as of April 5, 2007 among American Real Estate Partners, L.P., a Delaware
limited partnership, as issuer (“AREP”),
American Real Estate Finance Corp., a Delaware corporation, as co-issuer
(“AREP
Finance”,
and
together with AREP, the “Company”),
American Real Estate Holdings Limited Partnership, as Guarantor, and Wilmington
Trust Company, as trustee.
WHEREAS,
the Company has duly authorized the creation of an issue of its Variable Rate
Senior Convertible Notes Due 2013 (each a “Note”
and
collectively, the “Notes”)
of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS,
all things necessary to make the Notes, when executed by the Company and
authenticated and delivered hereunder and duly issued by the Company, the valid
and legally binding obligations of the Company, and to make this Indenture
a
valid and legally binding agreement of the Company, in accordance with the
terms
of the Notes and the Indenture, have been done. Further, all things necessary
to
duly authorize the issuance of the Depositary Units of the Company initially
issuable upon the conversion of the Notes, and to duly reserve for issuance
the
number of Depositary Units initially issuable upon such conversion, have been
done.
NOW,
THEREFORE,
the
Company, the Guarantor and the Trustee agree as follows for the benefit of
each
other and for the equal and ratable benefit of the Holders (as defined below)
of
the Notes:
ARTICLE
1
DEFINITIONS
AND INCORPORATION
BY
REFERENCE
Section
1.01 Definitions.
“144A
Global Note”
means a
Global Note substantially in the form of Exhibit A1 hereto bearing the Global
Note Legend and the Private Placement Legend and deposited with or on behalf
of,
and registered in the name of, the Depositary or its nominee that will be issued
in a denomination equal to the outstanding principal amount of the Notes sold
in
reliance on Rule 144A.
“2004
Indenture”
means
the Indenture dated as of May 12, 2004 between the Company, AREH, as guarantor,
and Wilmington Trust Company, as Trustee, as amended from time to time, under
which the 8 1/8% Senior Notes are issued and outstanding.
“2005
Indenture”
means
the Indenture dated as of February 7, 2005 between the Company, AREH, as
guarantor, and Wilmington Trust Company, as Trustee, as amended from time to
time, under which the 7 1/8% Senior Notes are issued and
outstanding.
“7
1/8% Senior Notes”
means
the Company’s 7 1/8% Senior Notes due 2013 as amended from time to time issued
pursuant to the 2005 Indenture.
“8
1/8% Senior Notes”
means
the Company’s 8 1/8% Senior Notes due 2012 as amended from time to time issued
pursuant to the 2004 Indenture.
“Additional
Interest”
means
all Additional Interest, as defined in and, then owing pursuant to the
Registration Rights Agreement.
“Additional
Notes”
means
additional Notes (other than the Initial Notes) issued under this Indenture
in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as
the
Initial Notes.
-
1 -
“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 purposes of this definition, “control,” as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct
or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the Voting Stock of a Person will
be
deemed to be control. For purposes of this definition, the terms “controlling,
“controlled by” and “under common control with” have correlative
meanings.
“Agent”
means
any Registrar, co-registrar, Paying Agent, additional paying agent or Conversion
Agent.
“API”
means
American Property Investors, Inc., the general partner of AREP as of the date
of
this Indenture (and not any of its subsidiaries).
“Applicable
Procedures”
means,
with respect to any transfer or exchange of or for beneficial interests in
any
Global Note, the rules and procedures of the Depositary, Euroclear and
Clearstream that apply to such transfer or exchange.
“AREH”
means
American Real Estate Holdings Limited Partnership (and not any of its
subsidiaries).
“AREP”
means
American Real Estate Partners, L.P. (and not any of its
subsidiaries).
“AREP
Finance”
means
American Real Estate Finance Corp.
“AREP
Partnership Agreement”
means
AREP’s Amended and Restated Agreement of Limited Partnership, dated May 12, 1987
as amended February 22, 1995, August 16, 1996, May 9, 2002 and June 27,
2005.
“Bankruptcy
Law”
means
Title 11, U.S. Code or any similar federal or state law for the relief of
debtors.
“Beneficial
Owner”
has the
meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that in calculating the beneficial ownership of any particular
“person” (as that term is used in Section 13(d)(3) of the Exchange Act), such
“person” will be deemed to have beneficial ownership of all securities that such
“person” has the right to acquire by conversion or exercise of other securities,
whether such right is currently exercisable or is exercisable only after the
passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a
corresponding meaning.
“Bloomberg”
means
Bloomberg Financial Markets.
“Board
of Directors”
means:
(1)
with
respect to a corporation, the board of directors of the corporation or any
committee thereof duly authorized to act on behalf of such board;
(2)
with
respect to a partnership, the Board of Directors of the general partner of
the
partnership;
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2 -
(3)
with
respect to a limited liability company, the managing member or members or any
controlling committee of managing members thereof or the Board of Directors
of
the managing member; and
(4)
with
respect to any other Person, the board or committee of such Person serving
a
similar function.
“Broker-Dealer”
means
any broker or dealer registered as such under the Exchange Act.
“Business
Day”
means
any day excluding Saturday, Sunday and any day which is a legal holiday under
the laws of the State of New York or is a day on which banking institutions
located in such jurisdictions are authorized or required by law or other
governmental action to close.
“Capital
Lease Obligation”
means,
at the time any determination is to be made, the amount of the liability in
respect of a capital lease that would at that time be required to be capitalized
on a balance sheet prepared in accordance with GAAP, and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be prepaid
by
the lessee without payment of a penalty.
“Capital
Stock”
means:
(1)
in
the
case of a corporation, corporate stock;
(2)
in
the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;
(3)
in
the
case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and
(4)
any
other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person
but excluding from all of the foregoing any debt securities convertible into
Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.
“Cash
Equivalents”
means:
(1)
United
States dollars;
(2)
securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government
(provided that the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more than one year from
the date of acquisition;
(3)
certificates
of deposit and eurodollar time deposits with maturities of one year or less
from
the date of acquisition, bankers’ acceptances with maturities not exceeding one
year and overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500.0 million and a Thomson Bank
Watch Rating of “B” or better;
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3 -
(4)
repurchase
obligations with a term of not more than seven days for underlying securities
of
the types described in clauses (2) and (3) above entered into with any financial
institution meeting the qualifications specified in clause (3)
above;
(5)
commercial
paper having one of the two highest ratings obtainable from Moody’s Investors
Service, Inc. or Standard & Poor’s Rating Services and, in each case,
maturing within one year after the date of acquisition; and
(6)
money
market funds at least 95% of the assets of which constitute Cash Equivalents
of
the kinds described in clauses (1) through (5) of this definition.
“Change
of Control”
means
the occurrence of any of the following:
(1)
the
sale,
lease, transfer, conveyance or other disposition by AREP or any Guarantor (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of AREP
or
AREH to any “person” (as that term is used in Section 13(d) of the Exchange Act)
other than the Principal or a Related Party; provided,
however,
that
(x) if AREP or AREH receives consideration in Cash Equivalents and marketable
securities with an aggregate Fair Market Value determined at the time of the
execution of each relevant agreement of at least $1.0 billion for such sale,
lease, transfer, conveyance or other disposition of properties or assets, then
such transaction shall not be deemed a Change of Control and (y) any sale,
assignment, transfer or other disposition of Cash Equivalents, including,
without limitation, any investment or capital contribution of Cash Equivalents
or purchase of property, assets or Capital Stock with Cash Equivalents, will
not
constitute a sale, assignment, transfer, conveyance or other disposition of
all
or substantially all of the properties or assets for purposes of this clause
(1);
(2)
the
adoption of a plan relating to the liquidation or dissolution of
AREP;
(3)
the
consummation of any transaction (including, without limitation, any merger
or
consolidation), the result of which is that any “person” (as defined above),
other than the Principal or the Related Parties, becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the Voting Stock of a Controlling
Entity of AREP, measured by voting power rather than number of
shares;
(4)
the
first
day on which a majority of the members of the Board of Directors of the
Controlling Entity are not Continuing Directors; or
(5)
for
so
long as the Company is a partnership, upon any general partner of AREP ceasing
to be an Affiliate of the Principal or a Related Party.
“Clearstream”
means
Clearstream Banking, S.A.
“Company”
means,
collectively AREP and AREP Finance, and any and all successors
thereto.
“Continuing
Directors”
means,
as of any date of determination, any member of the Board of Directors of the
Controlling Entity who:
(1)
was
a
member of such Board of Directors on the date of this Indenture; or
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4 -
(2)
was
nominated for election or elected to such Board of Directors with the approval
of the Principal or any of the Related Parties or with the approval of a
majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election.
“Control”
means
the possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of a Person, whether through the ownership
of Voting Stock, by agreement or otherwise.
“Controlling
Entity”
means
(1) for so long as AREP is a partnership, any general partner of AREP, (2)
if
AREP is a limited liability company, any managing member of AREP or (3) if
AREP
is a corporation, AREP.
“Conversion
Agent”
means
the Trustee or such other office or agency designated by the Company with notice
provided to the Holders where Notes may be presented for conversion.
“Conversion
Price”
means,
as of any Conversion Date or other date of determination, $132.595 subject
to
adjustment as provided herein.
“Conversion
Rate”
means,
as of any Conversion Date or other date of determination, for each $1,000
principal amount of Notes, the quotient of $1,000 divided by the Conversion
Price in effect as of such date.
“Corporate
Trust Office of the Trustee”
will be
at the address of the Trustee specified in Section 16.02 hereof or such other
address as to which the Trustee may give notice to the Company.
“Custodian”
means
the Trustee, as custodian with respect to the Notes in global form, or any
successor entity thereto.
“Default”
means
any event that is, or with the passage of time or the giving of notice or both
would be, an Event of Default.
“Definitive
Note”
means a
certificated Note registered in the name of the Holder thereof and issued in
accordance with Section 2.06 hereof, substantially in the form of Exhibit A1
hereto except that such Note shall not bear the Global Note Legend and shall
not
have the “Schedule of Exchanges of Interests in the Global Note” attached
thereto.
“Depositary”
means,
with respect to the Notes issuable or issued in whole or in part in global
form,
the Person specified in Section 2.03 hereof as the Depositary with respect
to
the Notes, and any and all successors thereto appointed as depositary hereunder
and having become such pursuant to the applicable provision of this
Indenture.
“Depositary
Unit Price”
means
the price paid per Depositary Unit in the transaction constituting the
Fundamental Change, determined as follows: (i) if holders of Depositary Units
receive only cash in the transaction constituting the Fundamental Change, the
Depositary Unit Price shall equal the cash amount paid per Depositary Unit;
and
(ii) in all other cases, the Depositary Unit Price shall equal the arithmetic
average of the VWAP of a Depositary Unit on each of the five (5) Trading Day
period ending on the Trading Day immediately preceding the Effective
Date.
“Depositary
Units”
means
Depositary Units representing limited partnership interests of the Company
listed for trading on the NYSE as they exist on the date of this Indenture
or
any other units of
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5 -
Capital
Stock of the Company into which the Depositary Units shall be reclassified
or
changed or, in the event of a merger, consolidation or other similar transaction
involving the Company that is otherwise permitted hereunder in which the Company
is not the surviving entity, the Equity Interests of such surviving entity
or
its direct or indirect parent entity into which the Notes would become
convertible pursuant to the applicable supplemental indenture.
“Disqualified
Stock”
means
any Capital Stock that, by its terms (or by the terms of any security into
which
it is convertible, or for which it is exchangeable, in each case, at the option
of the holder of the Capital Stock), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder of the Capital Stock,
in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because the holders of
the
Capital Stock have the right to require AREP or any Guarantor to repurchase
such
Capital Stock upon the occurrence of a change of control, event of loss, an
asset sale or other special redemption event will not constitute Disqualified
Stock if the terms of such Capital Stock provide that AREP or any Guarantor
may
not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 of the 2005
Indenture or where the funds to pay for such repurchase was from the net cash
proceeds of such Capital Stock and such net cash proceeds was set aside in
a
separate account to fund such repurchase. Furthermore, any Capital Stock that
would constitute Disqualified Stock solely because the holders of the Capital
Stock have the right to require AREP or any Guarantor to redeem such Capital
Stock, including, without limitation, upon maturity will not constitute
Disqualified Stock if the terms of such Capital Stock provide that AREP or
any
Guarantor may redeem such Capital Stock for other Capital Stock that is not
Disqualified Stock. The amount of Disqualified Stock deemed to be outstanding
at
any time for purposes of this Indenture will be the maximum amount that AREP
and
its Subsidiaries (including any Guarantor) may become obligated to pay upon
the
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends. For the avoidance of doubt,
and by way of example, the Preferred Units, as in effect on the date of this
Indenture, do not constitute Disqualified Stock.
“Eligible
Market”
means
the NYSE, The NASDAQ Global Select Market or The NASDAQ Global
Market.
“Equity
Conditions”
means
that each of the following conditions is satisfied: (i) the Depositary Units
are
designated for quotation on an Eligible Market, no suspension from trading
of
the Depositary Units on such exchange or market shall exist and be continuing,
and neither delisting nor suspension of the Depositary Units by such exchange
or
market shall be threatened or pending, in either case (A) in writing by such
exchange or market or (B) by falling below the minimum listing maintenance
requirements of such exchange or market; and (ii) as it relates to Article
12
and the delivery of a Forced Conversion Notice, either (A) the Registration
Statement filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all remaining Registrable Securities (each
as
defined in the Registration Rights Agreement) in accordance with the terms
of
the Registration Rights Agreement or (B) all Depositary Units issuable upon
conversion of the Notes shall be eligible for resale by the holders without
restriction and without the need for registration under any applicable federal
or state securities laws, including, without limitation, pursuant to Rule 144(k)
under the 1933 Act.
“Equity
Interests”
means
Capital Stock and all warrants, options or other rights to acquire Capital
Stock
(but excluding any debt security that is convertible into, or exchangeable
for,
Capital Stock).
“Euroclear”
means
Euroclear Bank, S.A./N.V., as operator of the Euroclear system.
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6 -
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Excluded
Securities”
means
issuances of (a) any Notes or (b) any Depositary Units (i) pursuant to any
present or future plan providing for the reinvestment of dividends or interest
payable on securities of the Company and the investment of additional optional
amounts in Depositary Units under any plan; (ii) pursuant to any present or
future employee, director or consultant benefit plan or program or employee
equity purchase plan of the Company or any of its Subsidiaries, (iii) pursuant
to any option, warrant, right or exercisable, exchangeable or convertible
security (including, without limitation, the Preferred Units) not described
in
clause (ii) above and outstanding as of the Issuance Date (provided that the
terms of such option, warrant, right or security are not amended or modified
in
any manner after the Issuance Date); (iv) for any Make-Whole Premium described
in Article 14; and (v) upon conversion of any Notes.
“Fair
Market Value” means
the
value that would be paid by a willing buyer to an unaffiliated willing seller
in
a transaction not involving distress or necessity of either party, determined
in
good faith by the Board of Directors of the Controlling Entity (unless otherwise
provided in this Indenture).
“Forced
Conversion Period”
means
the period beginning on the Forced Conversion Notice Date and ending on the
Forced Conversion Date.
“Fundamental
Change”
means
the occurrence of a Change in Control or a Termination of Trading.
“Fundamental
Change Settlement Date”
means
the Effective Date for a Fundamental Change. In respect of any Fundamental
Change Conversion or Fundamental Change Repurchase for which a Notice of
Conversion or Fundamental Change Repurchase Notice, as applicable, has been
delivered after the Effective Date (and during the Fundamental Change
Conversion/Repurchase Period), the Fundamental Change Settlement Date shall
mean
the date that is two Business Days following the end of the Fundamental Change
Conversion/Repurchase Period.
“GAAP”
means
generally accepted accounting principles in the United States set forth in
the
statements and pronouncements of the Financial Accounting Standards Board or
in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the
Issuance Date. For the purposes of this Indenture, the term “consolidated” with
respect to any Person shall mean such Person consolidated with its
Subsidiaries.
“Gaming
Authority”
means
any agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever of the United States or other national
government, any state, province or any city or other political subdivision,
including, without limitation, the State of Nevada, whether now or hereafter
existing, or any officer or official thereof and any other agency with authority
thereof to regulate any gaming operation (or proposed gaming operation) owned,
managed or operated by the Principal, its Related Parties, the Company or any
of
their respective Subsidiaries or Affiliates.
“Gaming
Law”
means
any gaming law or regulation of any jurisdiction or jurisdictions to which
the
Company or any of its Subsidiaries (including AREH) is, or may at any time
after
the issue date be, subject.
“Global
Note Legend”
means
the legend set forth in Section 2.06(f)(2) hereof, which is required to be
placed on all Global Notes issued under this Indenture.
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7 -
“Global
Notes”
means,
individually and collectively, each of the Restricted Global Notes and the
Unrestricted Global Notes deposited with or on behalf of and registered in
the
name of the Depository or its nominee, substantially in the form of Exhibit
A1
hereto and that bears the Global Note Legend and that has the “Schedule of
Exchanges of Interests in the Global Note” attached thereto, issued in
accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4) or 2.06(d)(2).
“Government
Securities”
means
securities that are (1) direct obligations of the United States of America
for
the timely payment of which its full faith and credit is pledged or (2)
obligations of a Person controlled or supervised by and acting as an agency
or
instrumentality of the United States of America the timely payment of which
is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at
the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian
with respect to any such Government Security or a specific payment of principal
of or interest on any such Government Security held by such custodian for the
account of the holder of such depository receipt; provided
that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from
any amount received by the custodian in respect of the Government Security
or
the specific payment of principal of or interest on the Government Security
evidenced by such depository receipt.
“Guarantee”
means a
guarantee (other than by endorsement of negotiable instruments for collection
in
the ordinary course of business), direct or indirect, in any manner (including,
without limitation, by way of a pledge of assets or through letters of credit
or
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services,
to
take or pay or to maintain financial statement conditions or
otherwise).
“Guarantor”
means
any Subsidiary of AREP (initially only AREH) that executes a Note Guarantee
in
accordance with the provisions of this Indenture, and their respective
successors and assigns, in each case, until the Note Guarantee of such Person
has been released in accordance with the provisions of this
Indenture.
“Hedging
Obligations”
means,
with respect to any specified Person, the obligations of such Person
under:
(1)
interest
rate swap agreements (whether from fixed to floating or from floating to fixed),
interest rate cap agreements and interest rate collar agreements;
(2)
other
agreements or arrangements designed to manage interest rates or interest rate
risk; and
(3)
other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange rates or commodity prices.
“Holder”
means a
Person in whose name a Note is registered.
“IAI
Global Note”
means a
Global Note substantially in the form of Exhibit A1 hereto bearing the Global
Note Legend and the Private Placement Legend and deposited with or on behalf
of
and registered in the name of the Depositary or its nominee that will be issued
in a denomination equal to the outstanding principal amount of the Notes sold
to
Institutional Accredited Investors.
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8 -
“Indebtedness”
means,
with respect to any specified Person, any indebtedness of such Person (excluding
accrued expenses and trade payables), whether or not contingent:
(1)
in
respect of borrowed money;
(2)
evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);
(3)
in
respect of banker’s acceptances;
(4)
representing
Capital Lease Obligations;
(5)
representing
the balance deferred and unpaid of the purchase price of any property or
services due more than six months after such property is acquired or such
services are completed; or
(6)
representing
any Hedging Obligations,
if
and to
the extent any of the preceding items (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP. In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person.
“Indenture”
means
this Indenture, as amended or supplemented from time to time.
“Indirect
Participant”
means a
Person who holds a beneficial interest in a Global Note through a
Participant.
“Interest
Payment Date”
means
each January 15, April 15, July 15 and October 15, commencing July 15, 2007
and
ending with a final interest payment date on the Maturity Date.
“Initial
Notes”
means
the first $200,000,000 aggregate principal amount of Notes issued under this
Indenture on the date hereof.
“Initial
Purchasers”
means
Portside Growth and Opportunity Fund and Highbridge International
LLC.
“Institutional
Accredited Investor”
means an
institution that is an “accredited investor” as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act, who are not also QIBs.
“Issuance
Date” means
the
closing date for the sale and original issuance of the Notes.
“Legal
Holiday” means
any
day other than a Business Day. If a payment date is a Legal Holiday at a place
of payment, payment may be made at that place on the next succeeding Business
Day, and no interest shall accrue on such payment for the intervening
period.
“LIBOR”
means,
as of the applicable date, the three-month London Interbank Offered Rate for
deposits in U.S. dollars, as shown on such date in The Wall Street Journal
(Eastern Edition) under the caption “Money Rates - London Interbank Offered
Rates (LIBOR)”; or (ii) if The Wall Street Journal does not publish such rate,
the offered one-month rate for deposits in U.S. dollars which appears on
the
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9 -
Reuters
Screen LIBO Page as of 10:00 a.m., New York time, each day, provided
that if
at least two rates appear on the Reuters Screen LIBO Page on any day, the
“LIBOR” for such day shall be the arithmetic mean of such rates.
“Lien”
means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law, including any conditional
sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction.
“Maturity
Date”
when
used with respect to any Note, means the date specified in such Note as the
fixed date on which the principal amount of such Note together with accrued
and
unpaid interest and Additional Interest, if any, is due and
payable.
“Non-U.S.
Person”
means a
Person who is not a U.S. Person.
“Note
Guarantee”
means
the Guarantee by any Subsidiary of AREP of the Company’s obligations under this
Indenture and the Notes, executed pursuant to the provisions of this Indenture;
which initially will only be by AREH.
“Notes”
has the
meaning assigned to it in the preamble to this Indenture. The Initial Notes
and
the Additional Notes shall be treated as a single class for all purposes under
this Indenture, and unless the context otherwise requires, all references to
the
Notes shall include the Initial Notes and any Additional Notes.
“NYSE”
means
the
New York Stock Exchange, Inc.
“Obligations”
means
any principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness.
“Offering”
means a
bona
fide
underwritten public offering (other than an “at-the-market offering” as defined
in Rule 415(a)(4) under the 1933 Act and “equity lines”) by the Company lead
managed by any of the investment banking firms listed on Schedule A hereto
or one of the 10 top-ranked (by dollar amount of lead managed public
offerings of common stock in the United States for the most recently ended
calendar year as such ranking is published in one or more nationally recognized
league tables) investment banking firms, in any such case which
is completed at least 30 days after the date of effectiveness of the Initial
Shelf Registration Statement (as defined in the Registration Rights Agreement)
and that results in aggregate gross proceeds to the Company in excess of $350
million (excluding any portion of such offering sold to (a) officers and
directors of the Company; (b) any Related Party or (c) any Affiliate of any
of
the foregoing).
“Officer”
means,
with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Vice-President of such Person.
“Officers’
Certificate”
means a
certificate signed on behalf of API or AREP Finance, as applicable, by two
Officers (or if AREP is (x) a limited liability company, two Officers of the
managing member of such limited liability company or (y) a corporation, by
two
Officers thereof) of API or AREP Finance, as applicable, one of whom must be
the
principal executive officer, the principal financial
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10 -
officer,
the treasurer or the principal accounting officer of API or AREP Finance, as
applicable, that meets the requirements of Section 16.05 hereof.
“Opinion
of Counsel”
means an
opinion from legal counsel who is reasonably acceptable to the Trustee, that
meets the requirements of Section 16.05 hereof. The counsel may be an employee
of or counsel to the Company, any Subsidiary of the Company or any of its
Affiliates or the Trustee.
“Other
Additional Interest”
means
liquidated damages or additional interest arising from a registration default
under a registration rights agreement with respect to the registration of
subordinated Indebtedness permitted to be incurred under this
Indenture.
“Participant”
means,
with respect to the Depositary, Euroclear or Clearstream, a Person who has
an
account with the Depositary, Euroclear or Clearstream, respectively (and, with
respect to DTC, shall include Euroclear and Clearstream).
“Partners’
Equity”
with
respect to any Person means as of any date, the partners’ equity as of such date
shown on the consolidated balance sheet of such Person and its Subsidiaries
or
if such Person is not a partnership, the comparable line-item on a balance
sheet, each prepared in accordance with GAAP.
“Person”
means
any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other
entity.
“Preferred
Units”
means
AREP’s 5% Cumulative Pay-in-Kind Redeemable Preferred Units payable on or before
March 31, 2010.
“Preferred
Unit Distribution”
means
the scheduled annual Preferred Unit distribution, payable on March 31 of each
year in additional Preferred Units at the rate of 5% of the liquidation
preference of $10.00 per Preferred Unit.
“Principal”
means
Carl Icahn.
“Private
Placement Legend”
means
the legend set forth in Section 2.06(f)(1) hereof to be placed on all Notes
issued under this Indenture except where otherwise permitted by the provisions
of this Indenture.
“QIB”
means a
“qualified institutional buyer” as defined in Rule 144A.
“Record
Date”
for
the
interest payable on any Interest Payment Date means each January 1, April 1,
July 1 and October 1 (whether or not a Business Day) next preceding such
Interest Payment Date.
“Registration
Rights Agreement”
means
the Registration Rights Agreement, dated as of April 4, 2007, among the Company,
AREH and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to
time.
“Regulation
S”
means
Regulation S promulgated under the Securities Act.
“Regulation
S Global Note”
means a
Regulation S Temporary Global Note or Regulation S Permanent Global Note, as
appropriate.
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11 -
“Regulation
S Permanent Global Note”
means a
permanent Global Note in the form of Exhibit A1 hereto bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of
and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Regulation S
Temporary Global Note upon expiration of the Restricted Period.
“Regulation
S Temporary Global Note”
means a
temporary Global Note in the form of Exhibit A2 hereto deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued
in
a denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
“Related
Parties”
means
(1) Carl Icahn, any spouse and any child, stepchild, sibling or descendant
of
Carl Icahn, (2) any estate of Carl Icahn or any person under clause (1), (3)
any
person who receives a beneficial interest in any estate under clause (2) to
the
extent of such interest, (4) any executor, personal administrator or trustee
who
holds such beneficial interest in AREP for the benefit of, or as fiduciary
for,
any person under clauses (1), (2) or (3) to the extent of such interest and
(5)
any corporation, partnership, limited liability company, trust, or similar
entity, directly or indirectly owned or Controlled by Carl Icahn or any other
person or persons identified in clauses (1), (2) or (3).
“Responsible
Officer,”
when
used with respect to the Trustee, means any officer within the Corporate Trust
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is
referred because of his knowledge of and familiarity with the particular
subject.
“Restricted
Definitive Note”
means a
Definitive Note bearing the Private Placement Legend.
“Restricted
Global Note”
means a
Global Note bearing the Private Placement Legend.
“Restricted
Period”
means
the 40-day distribution compliance period as defined in Regulation
S.
“Rule
144”
means
Rule 144 promulgated under the Securities Act.
“Rule
144A”
means
Rule 144A promulgated under the Securities Act.
“Rule
903”
means
Rule 903 promulgated under the Securities Act.
“Rule
904”
means
Rule 904 promulgated under the Securities Act.
“SEC”
means
the United States Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shelf
Registration Statement”
means a
registration statement under the Securities Act registering the Depositary
Units
issuable on conversion of the Notes for resale pursuant to the terms of the
Registration Rights Agreement.
“Significant
Subsidiary”
means
any Subsidiary which would be a “significant subsidiary” as defined in Article
1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act,
as
such regulation is in effect on the Issuance Date.
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12 -
“Stated
Maturity”
means,
with respect to any installment of interest or principal on any series of
Indebtedness, the date on which such payment of interest or principal was
scheduled to be paid in the original documentation governing such Indebtedness,
and shall not include any contingent obligations to repay, redeem or repurchase
any such interest, accreted value, or principal prior to the date originally
scheduled for the payment or accretion thereof.
“Subsidiary”
means,
with respect to any specified Person:
(1)
any
corporation, association or other business entity of which more than 50% of
the
total Voting Stock is at the time owned or Controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person (or
a
combination thereof); and
(2)
any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person
(or
any combination thereof).
For
the
avoidance of doubt, AREH will be deemed to be a Subsidiary of AREP so long
as
AREH remains a Guarantor.
“Tangible
Net Worth”
of any
specified Person as of any date means, the total shareholders’ equity (or if
such Person were not a corporation, the equivalent account) of such Person
and
its Subsidiaries on a consolidated basis determined in conformity with GAAP
less
any and all goodwill and other intangible assets reflected on the consolidated
balance sheet of such Person as of the last day of the fiscal quarter most
recently completed before the date of determination for which financial
statements are then available, but taking into account any change in total
shareholders’ equity (or the equivalent account) as a result of any (x)
Restricted Payments (as defined in the 2005 Indenture) made, (y) asset sales
or
(z) contributions to equity or from the issuance or sale of Equity Interests
(excluding Disqualified Stock) or from the exchange or conversion (other than
to
Disqualified Stock) of Disqualified Stock or debt securities, completed since
such fiscal quarter end.
“Termination
of Trading”
means
that the Depositary Units or other securities into which the Notes are then
convertible are not listed for trading on an Eligible Market.
“TIA”
means
the Trust Indenture Act of 1939, as amended (15 U.S.C.
§§ 77aaa-77bbbb).
“Trading
Day”
means
(a) if the applicable security is listed or admitted for trading on an Eligible
Market, a day on such Eligible Market is open for business or (b) if the
applicable security is not so listed, admitted for trading or quoted, any
Business Day.
“Trustee”
means
Wilmington Trust Company until a successor replaces it in accordance with the
applicable provisions of this Indenture and thereafter means the successor
serving hereunder.
“Unrestricted
Definitive Note”
means a
Definitive Note that does not bear and is not required to bear the Private
Placement Legend.
“Unrestricted
Global Note”
means a
Global Note that does not bear and is not required to bear the Private Placement
Legend.
“U.S.
Person”
means a
U.S. Person as defined in Rule 902(k) promulgated under the Securities
Act.
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13 -
“Voting
Stock”
means,
with respect to any Person that is (a) a corporation, any class or series of
capital stock of such Person that is ordinarily entitled to vote in the election
of directors thereof at a meeting of stockholders called for such purpose,
without the occurrence of any additional event or contingency, (b) a limited
liability company, membership interests entitled to manage, or to elect or
appoint the Persons that will manage the operations or business of the limited
liability company, or (c) a partnership, partnership interests entitled to
elect
or replace the general partner thereof.
“VWAP”
means,
for any security as of any date, the dollar volume-weighted average price for
such security on the principal market or exchange on which such security is
traded during the period beginning at 9:30:01 a.m., New York City time (or
such
other time as such principal market or exchange publicly announces is the
official open of trading), and ending at 4:00:00 p.m., New York City time (or
such other time as such principal market or exchange publicly announces is
the
official close of trading) as reported by Bloomberg through its “Volume at
Price” functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market
on
the electronic bulletin board for such security during the period beginning
at
9:30:01 a.m., New York City time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New
York
City time (or such other time as such market publicly announces is the official
close of trading) as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of
any
of the market makers for such security as reported in the “pink sheets” by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the VWAP cannot
be
calculated for a security on a particular date on any of the foregoing bases,
the VWAP of such security on such date shall be the fair market value as
determined in good faith by the Company, absent manifest error. All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.
Section
1.02 Other
Definitions.
(a) 2005
Indenture. Whenever,
in this Indenture, it is provided that a term will be “as defined in the 2005
Indenture” the relevant 2005 Indenture definition is incorporated herein by
reference and forms a part hereof as if it had been set forth in its
entirety herein and such definition will continue to be applicable in
the event the 2005 Indenture is defeased, discharged or terminated for any
reason.
(b)
Terms Defined Elsewhere in this Indenture.
|
Defined
in
|
||
|
Term
|
Section
|
|
|
“Affiliate
Transaction”
|
4.08
|
|
|
“Application
Date”
|
14.01
|
|
|
“Authentication
Order”
|
2.02
|
|
|
“Calculation
Date”
|
1.01
|
|
|
“Clause
(6) Indebtedness”
|
6.01
|
|
|
“Conversion
Date”
|
12.02
|
|
|
“Covenant
Defeasance”
|
8.03
|
|
|
“Current
Market Price per Depositary Unit”
|
12.11
|
|
|
“Depositary
Unit Delivery Date”
|
12.07
|
|
|
“Depositary
Unit Price Cap”
|
15.01
|
|
|
“Depositary
Unit Price Threshold”
|
15.01
|
|
|
“Dilutive
Issuance”
|
12.11
|
|
|
“DTC”
|
2.03
|
|
|
“Effective
Date”
|
15.1
|
|
|
“Event
of Default”
|
6.01
|
|
|
“Expiration
Date”
|
12.11
|
|
|
“Expiration
Time”
|
12.11
|
|
|
“Forced
Conversion”
|
12.03
|
|
|
“Forced
Conversion Date”
|
12.03
|
|
|
“Forced
Conversion Equity Conditions Failure”
|
12.03
|
|
|
“Forced
Conversion Notice”
|
12.03
|
|
|
“Forced
Conversion Notice Date”
|
12.03
|
|
|
“Fundamental
Change Company Notice
|
13.01
|
|
|
“Fundamental
Change Conversion”
|
12.01
|
|
|
“Fundamental
Change Repurchase”
|
13.01
|
|
|
“Fundamental
Change Repurchase Notice”
|
13.01
|
|
|
“Fundamental
Change Repurchase Period”
|
13.01
|
|
|
“Fundamental
Change Repurchase Price”
|
13.01
|
|
|
“Interest
Rate”
|
3.01
|
|
|
“Make-Whole
Premium”
|
15.01
|
|
|
“Make-Whole
Premium Table
|
15.01
|
|
|
“Notice
of Conversion”
|
12.02
|
|
|
“Paying
Agent”
|
2.03
|
|
|
“Poison
Pill”
|
12.11
|
|
|
“Purchased
Depositary Units
|
12.11
|
|
|
“Registrar”
|
2.03
|
|
|
“Trigger
Event”
|
12.11
|
|
|
“Triggering
Distribution”
|
4.07
|
|
|
“Triggering
Distribution Threshold Amount”
|
4.07
|
Section
1.03 Rules
of Construction.
Unless
the context otherwise requires:
(1)
a
term has the meaning assigned to it;
(2)
an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(3)
“or”
is not exclusive;
(4)
words
in the singular include the plural, and in the plural include the
singular;
(5)
“will” shall be interpreted to express a command;
(6)
provisions apply to successive events and transactions; and
(7)
references to sections of or rules under the Securities Act will be deemed
to
include substitute, replacement of successor sections or rules adopted by the
SEC from time to time.
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14 -
ARTICLE
2
THE
NOTES
Section
2.01 Form
and Dating.
(a) General.
The
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is initially limited to $600,000,000, except for Notes
authenticated and delivered upon registration or transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 2.06. Other than as set
forth in the preceding sentence, the Company shall not issue any Notes under
this Indenture.
The
Notes
shall be known and designated as the “Variable
Rate Senior Convertible Notes Due 2013”
of
the
Company. The principal amount shall be payable at the Maturity Date, or at
the
election of each Holder upon a Fundamental Change as provided for under this
Indenture. The Notes shall rank pari
passu with
all
unsecured and unsubordinated indebtedness of the Company, including, without
limitation, the 8 1/8% Senior Notes and the 7 1/8% Senior Notes.
The
Notes
and the Trustee’s certificate of authentication will be substantially in the
form of Exhibits A1 and A2 hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note will
be
dated the date of its authentication. The Notes shall be in denominations of
$1,000 and integral multiples thereof.
The
terms
and provisions contained in the Notes will constitute, and are hereby expressly
made, a part of this Indenture and the Company, the Guarantor and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such
terms
and provisions and to be bound thereby. However, to the extent any provision
of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
The
Notes
shall not have the benefit of a sinking fund.
Except
as
provided in Article 14 hereof, the Notes may not be redeemed or prepaid in
whole
or in part at the option of the Company, at any time prior to the Maturity
Date;
provided, however
that the
Company and/or its Subsidiaries are not prohibited from purchasing Notes in
privately negotiated or open market transactions, by tender offer or
otherwise.
(b) Global
Notes.
Notes
issued in global form will be substantially in the form of Exhibits A1 or A2
attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Notes issued in
definitive form will be substantially in the form of Exhibit A1 hereto (but
without the Global Note Legend thereon and without the “Schedule of Exchanges of
Interests in the Global Note” attached thereto). Each Global Note will represent
such of the outstanding Notes as will be specified therein and each shall
provide that it represents the aggregate principal amount of outstanding Notes
from time to time endorsed thereon and that the aggregate principal amount
of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect conversions, exchanges, redemptions and
repurchases. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) Temporary
Global Notes.
Notes
offered and sold in reliance on Regulation S will be issued initially in the
form of the Regulation S Temporary Global Note, which will be deposited on
behalf of the
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15 -
purchasers
of the Notes represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or the nominee of
the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Company and authenticated by the Trustee
as
hereinafter provided. The Restricted Period will be terminated upon the receipt
by the Trustee of:
(1)
a
written certificate from the Depositary, together with copies of certificates
from Euroclear and Clearstream certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein during the Restricted
Period pursuant to another exemption from registration under the Securities
Act
and who will take delivery of a beneficial ownership interest in a 144A Global
Note or an IAI Global Note bearing a Private Placement Legend, all as
contemplated by Section 2.06(b) hereof); and
(2)
an
Officers’ Certificate from the Company.
Following
the termination of the Restricted Period, beneficial interests in the Regulation
S Temporary Global Note will be exchanged for beneficial interests in the
Regulation S Permanent Global Note pursuant to the Applicable Procedures.
Simultaneously with the authentication of the Regulation S Permanent Global
Note, the Trustee will cancel the Regulation S Temporary Global Note. The
aggregate principal amount of the Regulation S Temporary Global Note and the
Regulation S Permanent Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers of interest
as
hereinafter provided.
(d) Euroclear
and Clearstream Procedures Applicable.
The
provisions of the “Operating Procedures of the Euroclear System” and “Terms and
Conditions Governing Use of Euroclear” and the “General Terms and Conditions of
Clearstream Banking” and “Customer Handbook” of Clearstream will be applicable
to transfers of beneficial interests in the Regulation S Temporary Global Note
and the Regulation S Permanent Global Note that are held by Participants through
Euroclear or Clearstream.
Section
2.02 Execution
and Authentication.
At
least
one Officer must sign the Notes for the Company by manual or facsimile
signature.
If
an
Officer whose signature is on a Note no longer holds that office at the time
a
Note is authenticated, the Note will nevertheless be valid.
A
Note
will not be valid until authenticated by the manual signature of the Trustee.
The signature will be conclusive evidence that the Note has been authenticated
under this Indenture.
The
Trustee will, upon receipt of a written order of the Company signed by two
Officers (an “Authentication
Order”),
authenticate Notes for original issue that may be validly issued under this
Indenture, including any Additional Notes up to the aggregate principal amount
stated in such Authentication Order. The aggregate principal amount of Notes
outstanding at any time may not exceed the aggregate principal amount of Notes
authorized for issuance by the Company pursuant to one or more Authentication
Orders, except as provided in Section 2.07 hereof.
The
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes. An authenticating agent may authenticate Notes whenever
the
Trustee may do so. Each reference
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16 -
in
this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Company.
Section
2.03 Registrar
and Paying Agent.
The
Company will maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (“Registrar”),
an
office or agency where Notes may be presented for payment (“Paying
Agent”)
and an
office or agency where Notes may be presented for conversion. The Registrar
will
keep a register of the Notes and of their transfer, repurchase, redemption,
conversion and exchange. The Company may appoint one or more co-registrars,
one
or more additional paying agents and/or conversion agents. The term “Registrar”
includes any co-registrar, the term “Paying Agent” includes any additional
paying agent and the term “Conversion Agent” includes and additional conversion
agent. The Company may change any Paying Agent or Registrar without notice
to
any Holder. The Company will notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may
act as Paying Agent or Registrar or Conversion Agent.
The
Company initially appoints The Depository Trust Company (“DTC”)
to act
as Depositary with respect to the Global Notes.
The
Company initially appoints the Trustee to act as the Registrar and Paying Agent
and to act as Custodian with respect to the Global Notes.
Section
2.04 Paying
Agent to Hold Money in Trust.
The
Company will require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders
or
the Trustee all money held by the Paying Agent for the payment of principal,
premium or Additional Interest, if any, or interest on the Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to
pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over
to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will
have no further liability for the money. If the Company or a Subsidiary acts
as
Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee will serve
as
Paying Agent for the Notes.
Section
2.05 Holder
Lists.
The
Trustee will preserve in as current a form as is reasonably practicable the
most
recent list available to it of the names and addresses of all Holders and shall
otherwise comply with TIA § 312(a). If the Trustee is not the Registrar,
the Company will furnish to the Trustee at least seven Business Days before
each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Company
shall
otherwise comply with TIA § 312(a).
Section
2.06 Transfer
and Exchange.
(a) Transfer
and Exchange of Global Notes.
A
Global Note may not be transferred except as a whole by the Depositary to a
nominee of the Depositary, by a nominee of the Depositary to the
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17 -
Depositary
or to another nominee of the Depositary, or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
All
Global Notes will be exchanged by the Company for Definitive Notes
if:
(1)
the
Company delivers to the Trustee notice from the Depositary that it is unwilling
or unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary;
(2)
the
Company in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee; provided
that in
no event shall the Regulation S Temporary Global Note be exchanged by the
Company for Definitive Notes prior to (A) the expiration of the Restricted
Period and (B) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or
(3)
there
has occurred and is continuing a Default or Event of Default with respect to
the
Notes.
Upon
the
occurrence of either of the preceding events in (1) or (2) above, Definitive
Notes shall be issued in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part,
as
provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in
this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b) or (c)
hereof.
(b) Transfer
and Exchange of Beneficial Interests in the Global Notes.
The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those
set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more
of
the other following subparagraphs, as applicable:
(1)
Transfer
of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth
in
the Private Placement Legend; provided,
however,
that
prior to the expiration of the Restricted Period, transfers of beneficial
interests in the Regulation S Temporary Global
Note may not be made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchasers). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(1).
(2)
All
Other Transfers and Exchanges of Beneficial Interests in Global
Notes.
In
connection with all transfers and exchanges of beneficial interests that are
not
subject to Section 2.06(b)(1) above, the transferor of such beneficial interest
must deliver to the Registrar either:
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18 -
(A) both:
(i) a
written
order from a Participant or an Indirect Participant given to the Depositary
in
accordance with the Applicable Procedures directing the Depositary to credit
or
cause to be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged;
and
(ii) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase; or
(B) both:
(i) a
written
order from a Participant or an Indirect Participant given to the Depositary
in
accordance with the Applicable Procedures directing the Depositary to cause
to
be issued a Definitive Note in an amount equal to the beneficial interest to
be
transferred or exchanged; and
(ii) instructions
given by the Depositary to the Registrar containing information regarding the
Person in whose name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above; provided
that in
no event shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note prior to (A)
the
expiration of the Restricted Period and (B) the receipt by the Registrar of
any
certificates required pursuant to Rule 903 under the Securities Act. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(g)
hereof.
(3)
Transfer
of Beneficial Interests to Another Restricted Global Note.
A
beneficial interest in any Restricted Global Note may be transferred to a Person
who takes delivery thereof in the form of a beneficial interest in another
Restricted Global Note if the transfer complies with the requirements of Section
2.06(b)(2) above and the Registrar receives the following:
(A) if
the
transferee will take delivery in the form of a beneficial interest in the 144A
Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof;
(B) if
the
transferee will take delivery in the form of a beneficial interest in the
Regulation S Temporary Global Note or the Regulation S Permanent Global Note,
then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if
the
transferee will take delivery in the form of a beneficial interest in the IAI
Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
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19 -
(4)
Transfer and Exchange of Beneficial Interests in a Restricted Global Note for
Beneficial Interests in an Unrestricted Global Note. A beneficial interest
in
any Restricted Global Note may be exchanged by any holder thereof for a
beneficial interest in an Unrestricted Global Note or transferred to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(2) above and the Registrar receives the
following:
(A) if
the
holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof; or
(B) if
the
holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in
the form of a beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof,
and,
in
each such case set forth in this subparagraph (4), if the Registrar so requests
or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions
on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
If
any
such transfer is effected pursuant to subparagraph (4) above at a time when
an
Unrestricted Global Note has not yet been issued, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (4) above.
Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or transferred
to Persons who take delivery thereof in the form of, a beneficial interest
in a
Restricted Global Note.
(c) Transfer
or Exchange of Beneficial Interests for Definitive Notes.
(1)
Beneficial
Interests in Restricted Global Notes to Restricted Definitive
Notes.
If any
holder of a beneficial interest in a Restricted Global Note proposes to exchange
such beneficial interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the following
documentation:
(A) if
the
holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if
such
beneficial interest is being transferred to a QIB in accordance with Rule 144A,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
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20 -
(C) if
such
beneficial interest is being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if
such
beneficial interest is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144,
a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if
such
beneficial interest is being transferred to an Institutional Accredited Investor
in reliance on an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if
such
beneficial interest is being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if
such
beneficial interest is being transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the
Trustee shall cause the aggregate principal amount of the applicable Global
Note
to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company
shall execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a beneficial interest in
a
Restricted Global Note pursuant to this Section 2.06(c) shall be registered
in
such name or names and in such authorized denomination or denominations as
the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Trustee shall deliver such Definitive Notes to the Persons in whose names
such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(1) shall bear the Private Placement Legend and shall be subject to
all
restrictions on transfer contained therein.
(2)
Beneficial
Interests in Regulation S Temporary Global Note to Definitive
Notes.
Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial interest
in
the Regulation S Temporary Global Note may not be exchanged for a Definitive
Note or transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to (A) the expiration of the Restricted Period and (B)
the
receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.
(3)
Beneficial
Interests in Restricted Global Notes to Unrestricted Definitive
Notes.
A holder
of a beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer such
beneficial interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if the Registrar receives the
following:
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21 -
(A) if
the
holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for an Unrestricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(B) if
the
holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in
the form of an Unrestricted Definitive Note, a certificate from such holder
in
the form of Exhibit B hereto, including the certifications in item (4)
thereof;
and,
in
each such case set forth in this subparagraph (3), if the Registrar so requests
or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions
on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
(4)
Beneficial
Interests in Unrestricted Global Notes to Unrestricted Definitive
Notes.
If any
holder of a beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(2) hereof, the Trustee, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, will cause the aggregate principal amount
of the applicable Global Note to be reduced accordingly pursuant to Section
2.06(g) hereof, and the Company will execute and the Trustee will authenticate
and deliver to the Person designated in the instructions a Definitive Note
in
the appropriate principal amount. Any Definitive Note issued in exchange for
a
beneficial interest pursuant to this Section 2.06(c)(4) will be registered
in
such name or names and in such authorized denomination or denominations as
the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons
in
whose names such Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear
the
Private Placement Legend.
(d) Transfer
and Exchange of Definitive Notes for Beneficial Interests.
(1)
Restricted
Definitive Notes to Beneficial Interests in Restricted Global
Notes.
If any
Holder of a Restricted Definitive Note proposes to exchange such Note for a
beneficial interest in a Restricted Global Note or to transfer such Restricted
Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if
the
Holder of such Restricted Definitive Note proposes to exchange such Note for
a
beneficial interest in a Restricted Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications in item (2)(b)
thereof;
(B) if
such
Restricted Definitive Note is being transferred to a QIB in accordance with
Rule
144A, a certificate to the effect set forth in Exhibit B hereto, including
the
certifications in item (1) thereof;
(C) if
such
Restricted Definitive Note is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate
to
the effect set forth in Exhibit B hereto, including the certifications in item
(2) thereof;
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22 -
(D) if
such
Restricted Definitive Note is being transferred pursuant to an exemption from
the registration requirements of the Securities Act in accordance with Rule
144,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if
such
Restricted Definitive Note is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of
the
Securities Act other than those listed in subparagraphs (B) through (D) above,
a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if
such
Restricted Definitive Note is being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if
such
Restricted Definitive Note is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect
set
forth in Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the
Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global
Note,
and in all other cases, the IAI Global Note.
(2)
Restricted
Definitive Notes to Beneficial Interests in Unrestricted Global
Notes.
A Holder
of a Restricted Definitive Note may exchange such Note for a beneficial interest
in an Unrestricted Global Note or transfer such Restricted Definitive Note
to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if the Registrar receives the
following:
(A) if
the
Holder of such Definitive Notes proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a certificate from such Holder in
the
form of Exhibit C hereto, including the certifications in item (1)(c) thereof;
or
(B) if
the
Holder of such Definitive Notes proposes to transfer such Notes to a Person
who
shall take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and,
in
each such case set forth in this subparagraph (2), if the Registrar so requests
or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions
on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
Upon
satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global
Note.
(3)
Unrestricted
Definitive Notes to Beneficial Interests in Unrestricted Global
Notes.
A Holder
of an Unrestricted Definitive Note may exchange such Note for a beneficial
interest in an
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23 -
Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
at
any time. Upon receipt of a request for such an exchange or transfer, the
Trustee, upon receipt of an Authentication Order in accordance with Section
2.02
hereof, will cancel the applicable Unrestricted Definitive Note and increase
or
cause to be increased the aggregate principal amount of one of the Unrestricted
Global Notes.
If
any
such exchange or transfer from a Definitive Note to a beneficial interest is
effected pursuant to subparagraphs (2)(B) or (3) above at a time when an
Unrestricted Global Note has not yet been issued, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive Notes
so
transferred.
(e) Transfer
and Exchange of Definitive Notes for Definitive Notes.
Upon
request by a Holder of Definitive Notes and such Holder’s compliance with the
provisions of this Section 2.06(e), the Registrar will register the transfer
or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar
the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder
or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1)
Restricted
Definitive Notes to Restricted Definitive Notes.
Any
Restricted Definitive Note may be transferred to and registered in the name
of
Persons who take delivery thereof in the form of a Restricted Definitive Note
if
the Registrar receives the following:
(A) if
the
transfer will be made pursuant to Rule 144A, then the transferor must deliver
a
certificate in the form of Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if
the
transfer will be made pursuant to Rule 903 or Rule 904, then the transferor
must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if
the
transfer will be made pursuant to any other exemption from the registration
requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable.
(2)
Restricted
Definitive Notes to Unrestricted Definitive Notes.
Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if the Registrar
receives the following:
(A) if
the
Holder of such Restricted Definitive Notes proposes to exchange such Notes
for
an Unrestricted Definitive Note, a certificate from such Holder in the form
of
Exhibit C hereto, including the certifications in item (1)(d) thereof;
or
(B) if
the
Holder of such Restricted Definitive Notes proposes to transfer such Notes
to a
Person who shall take delivery thereof in the form of an
Unrestricted
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24 -
Definitive
Note, a certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and,
in
each such case set forth in this subparagraph (2), if the Registrar so requests,
an Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the Securities
Act
and that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the
Securities Act.
(3)
Unrestricted
Definitive Notes to Unrestricted Definitive Notes.
A Holder
of Unrestricted Definitive Notes may transfer such Notes to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt
of
a request to register such a transfer, the Registrar shall register the
Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.
(f) Legends.
The
following legends will appear on the face of all Global Notes and Definitive
Notes issued under this Indenture unless specifically stated otherwise in the
applicable provisions of this Indenture.
(1)
Private
Placement Legend.
(A) Except
as
permitted by subparagraph (B) below, each Global Note and each Definitive Note
(and all Notes issued in exchange therefor or substitution thereof) shall bear
the legend in substantially the following form:
“THE
SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND THE SECURITY
EVIDENCED HEREBY AND THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF AMERICAN
REAL ESTATE PARTNERS, L.P.
AND
AMERICAN REAL ESTATE FINANCE CORP. THAT (A) SUCH SECURITY AND THE DEPOSITARY
UNITS ISSUABLE UPON CONVERSION HEREOF MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 (a) (1), (2), (3) OR (7) OF THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
CAN
BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO AMERICAN REAL ESTATE PARTNERS, L.P. THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE
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25 -
SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF AMERICAN REAL ESTATE PARTNERS,
L.P.
SO REQUESTS), (2) TO AMERICAN REAL ESTATE PARTNERS, L.P. OR (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. IF AT ANY TIME THE NEVADA GAMING
COMMISSION FINDS THAT A HOLDER OF THIS SECURITY OR THE DEPOSITARY UNITS ISSUABLE
UPON CONVERSION HEREOF IS UNSUITABLE TO CONTINUE TO OWN THE SECURITY (OR THE
DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF), AMERICAN REAL ESTATE
PARTNERS, L.P. SHALL HAVE THE RIGHT TO REQUIRE SUCH HOLDER TO DISPOSE OF SUCH
SECURITY OR DEPOSITARY UNITS, AS APPLICABLE, AS PROVIDED BY THE GAMING LAWS OF
THE STATE OF NEVADA AND THE REGULATIONS PROMULGATED THEREUNDER. ALTERNATIVELY,
AMERICAN REAL ESTATE PARTNERS, L.P. SHALL HAVE THE RIGHT TO REDEEM THE SECURITY
FROM THE HOLDER AT A PRICE SPECIFIED IN THE INDENTURE GOVERNING THE SECURITY.
NEVADA GAMING LAWS AND REGULATIONS RESTRICT THE RIGHT UNDER CERTAIN
CIRCUMSTANCES: (A) TO PAY OR RECEIVE ANY INTEREST UPON SUCH SECURITY; (B) TO
EXERCISE, DIRECTLY OR THROUGH ANY TRUSTEE OR NOMINEE, ANY VOTING RIGHT CONFERRED
BY SUCH SECURITY; OR (C) TO RECEIVE ANY REMUNERATION IN ANY FORM FROM AMERICAN
REAL ESTATE PARTNERS, L.P., FOR SERVICES RENDERED OR OTHERWISE.”
(B) Notwithstanding
the foregoing, any Global Note or Definitive Note issued pursuant to
subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), or (e)(3) of
this
Section 2.06 (and all Notes issued in exchange therefor or substitution thereof)
will not bear the Private Placement Legend.
(2)
Global
Note Legend.
Each
Global Note will bear a legend in substantially the following form:
“THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11
OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE PARTNERS,
L.P.
UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM,
THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED
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26 -
IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.”
(3)
Regulation
S Temporary Global Note Legend.
The
Regulation S Temporary Global Note will bear a Legend in substantially the
following form:
“THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS
AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES AND/OR DEPOSITARY
UNITS UPON CONVERSION HEREOF, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST
HEREON.”
(g) Cancellation
and/or Adjustment of Global Notes.
At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased,
converted or canceled in whole and not in part, each such Global Note will
be
returned to or retained and canceled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial interest
in a Global Note is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note
or
for Definitive Notes, or if any amount therein is repurchased, redeemed or
converted, the principal amount of Notes represented by such Global Note will
be
reduced accordingly and an endorsement will be made on such Global Note by
the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly
and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such
increase.
(h) General
Provisions Relating to Transfers and Exchanges.
(1)
To
permit
registrations of transfers and exchanges, the Company will execute and the
Trustee will authenticate Global Notes and Definitive Notes upon receipt of
an
Authentication Order in accordance with Section 2.02 hereof or at the
Registrar’s request.
(2)
No
service charge will be made to a Holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of conversion,
repurchase, transfer or exchange, but the Company may require payment of a
sum
sufficient to cover any transfer tax or similar governmental charge payable
in
connection therewith (other than any such transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to Sections 2.10 and 9.04
and
Article 13 hereof).
(3)
The
Registrar will not be required to register the transfer of or exchange of any
Note selected by the Holder for repurchase in whole or in part upon a
Fundamental Change, except the unpurchased portion of any Note being repurchased
in part.
(4)
All
Global Notes and Definitive Notes issued upon any registration of transfer
or
exchange of Global Notes or Definitive Notes will be the valid obligations
of
the
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27 -
Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(5)
Neither
the Registrar nor the Company will be required:
(A) to
register the transfer of or to exchange any Notes surrendered in whole or in
part for repurchase in connection with a Fundamental Change (and not withdrawn)
except the portion of any such Note being repurchased in part;
(B) to
register the transfer of or to exchange any Note surrendered for conversion
at
the option of the Holder in whole or in part, except the unconverted portion
of
any Note being converted in part;
(C) to
register the transfer of or to exchange any Note selected in connection with
a
Forced Conversion in whole or in part, except the unconverted portion of any
Note being converted in part; or
(D) to
register the transfer of or to exchange a Note between a record date and the
next succeeding interest payment date.
(6)
Prior
to
due presentment for the registration of a transfer of any Note, the Trustee,
any
Agent and the Company may deem and treat the Person in whose name any Note
is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by notice
to
the contrary.
(7)
The
Trustee will authenticate Global Notes and Definitive Notes in accordance with
the provisions of Section 2.02 hereof.
(8)
All
certifications, certificates and Opinions of Counsel required to be submitted
to
the Registrar pursuant to this Section 2.06 to effect a registration of transfer
or exchange may be submitted by facsimile.
Section
2.07 Replacement
Notes.
If
any
mutilated Note is surrendered to the Trustee or the Company and the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of
any
Note, the Company will issue and the Trustee, upon receipt of an Authentication
Order, will authenticate a replacement Note if the Trustee’s requirements are
met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and
the
Company to protect the Company, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Company may charge for its expenses in replacing a Note.
Every
replacement Note is an additional obligation of the Company and will be entitled
to all of the benefits of this Indenture equally and proportionately with all
other Notes duly issued hereunder.
Section
2.08 Outstanding
Notes.
The
Notes
outstanding at any time are all the Notes authenticated by the Trustee except
for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Note
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effected
by the Trustee in accordance with the provisions hereof, and those described
in
this Section 2.08 as not outstanding. Except as set forth in Section 2.09
hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note; however,
Notes
held by the Company or a Subsidiary of the Company shall not be deemed to be
outstanding for purposes of Section 9.02 or Article 12 hereof.
If
a Note
is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held
by
a protected purchaser.
To
the
extent the principal amount of any Note is converted pursuant to Article 12
or
13, it ceases to be outstanding and interest on it ceases to accrue
If
the
principal amount of any Note is considered paid under Section 4.01 hereof,
it
ceases to be outstanding and interest on it ceases to accrue.
If
the
Paying Agent (other than the Company, a Subsidiary or an Affiliate of any
thereof) holds, on a redemption date or maturity date, money sufficient to
pay
Notes payable on that date, then on and after that date such Notes will be
deemed to be no longer outstanding and will cease to accrue
interest.
Section
2.09 Treasury
Notes.
In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Company or
any
Guarantor, or by any Person directly or indirectly controlling or controlled
by
or under direct or indirect common control with the Company or any Guarantor,
will be considered as though not outstanding, except that for the purposes
of
determining whether the Trustee will be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
will be so disregarded.
Section
2.10 Temporary
Notes.
Until
certificates representing Notes are ready for delivery, the Company may prepare
and the Trustee, upon receipt of an Authentication Order, will authenticate
temporary Notes. Temporary Notes will be substantially in the form of
certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders
of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section
2.11 Cancellation.
The
Company at any time may deliver Notes to the Trustee for cancellation. The
Registrar, Paying Agent and Conversion Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange, conversion,
repurchase or payment. The Trustee and no one else will cancel all Notes
surrendered for registration of transfer, exchange, conversion, repurchase,
payment, replacement or cancellation and will destroy canceled Notes (subject
to
the record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Notes will be delivered to the Company. The Company
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.
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Section
2.12 Defaulted
Interest.
If
the
Company defaults in a payment of interest on the Notes, it will pay the
defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing
of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date; provided
that no
such special record date may be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee
in
the name and at the expense of the Company) will mail or cause to be mailed
to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
Section
2.13 CUSIP
Numbers.
In
issuing the Notes, the Company may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices delivered,
and as a convenience, to Holders; provided that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption, repurchase
or conversion and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption, repurchase or conversion
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee of any change in the “CUSIP”
numbers.
ARTICLE
3
INTEREST
Section
3.01 Interest
Rate.
(a) Interest
on the Notes shall be payable quarterly in arrears on each Interest Payment
Date
to Holders of record on the Record Date immediately preceding such Interest
Payment Date. Interest on the Notes shall accrue at a rate (the “Interest
Rate”)
equal
to LIBOR minus one and one-quarter percentage point (1.25%) per annum;
provided,
however,
that
the Interest Rate shall at no time be less than four percent (4%) per annum
nor
greater than five and one half percent (5.5%) per annum. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The
applicable Interest Rate in respect of the Notes shall be determined for each
quarterly interest period on the last Trading Day of the immediately preceding
quarterly period; provided
that
the
initial Interest Rate shall be determined on April 4, 2007. Interest on the
Notes shall accrue from the most recent date to which interest has been paid,
or
if no interest has been paid, from April 5, 2007 until the principal amount
of
the Notes is paid or duly made available for payment.
(b) If
prior
to any Interest Payment Date, Additional Interest has accrued under the
Registration Rights Agreement and not theretofore been paid in full, any such
Additional Interest shall be due and payable on such Interest Payment Date,
and
shall be included in interest payable on such Interest Payment Date and shall
be
paid in the manner provided for herein for the payment of Interest
Payments.
(c) Interest
on any Note that is payable, and is punctually paid or duly provided for, on
any
Interest Payment Date shall be paid to the Person in whose name that Note is
registered at the close of business on the Record Date for such interest at
the
office or agency of the Company maintained for such purpose. Each installment
of
interest on any Note shall be made by check mailed to the address of
the
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30 -
Holder
specified in the register of Notes; provided,
however,
that,
in respect of any Holder with an aggregate principal amount of Notes in excess
of $2,000,000, at the request of such Holder in writing to the Company, interest
on such Holder’s Notes shall be paid by wire transfer in immediately available
funds in accordance with the written wire transfer instruction supplied by
such
Holder from time to time to the Trustee and Paying Agent (if different from
the
Trustee) at least ten (10) days prior to the applicable Interest Payment Date.
In the case of a permanent Global Note, interest payable on any Interest Payment
Date will be paid to the Depositary, in respect of that portion of such
permanent Global Note held for its account by Cede & Co. for the purpose of
permitting such party to credit the interest received by it in respect of such
permanent Global Note to the accounts of the beneficial owners
thereof.
ARTICLE
4
COVENANTS
Section
4.01 Payment
of Notes.
The
Company shall pay or cause to be paid the principal of, premium, if any,
interest and Additional Interest, if any, on, the Notes on the dates and in
the
manner provided in the Notes. Principal, premium, if any, and interest and
Additional Interest, if any, will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m., Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, interest and Additional Interest, if any, then
due.
The Company shall pay all Additional Interest, if any, in the same manner on
the
dates and in the amounts set forth in the Registration Rights Agreement.
The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal at the rate equal to 1% per
annum
in excess of the then applicable interest rate on the Notes to the extent
lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Additional Interest (without regard to any applicable grace period) at the
same
rate to the extent lawful.
Section
4.02 Maintenance
of Office or Agency.
The
Company shall maintain an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company fails to maintain any such required office
or
agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The
Company may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however,
that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or
agency.
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The
Company hereby designates the Corporate Trust Office of the Trustee as one
such
office or agency of the Company in accordance with Section 2.03 hereof.
Section
4.03 Reports.
Whether
or not required by the rules and regulations of the SEC, so long as any Notes
are outstanding, the Company shall furnish to the Holders of Notes or cause
the
Trustee to furnish to the Holders of Notes, within the time periods specified
in
the SEC’s rules and regulations:
(1)
all
quarterly and annual reports that would be required to be filed with the SEC
on
Forms 10-Q and 10-K if the Company were required to file such reports;
and
(2)
all
current reports that would be required to be filed with the SEC on Form 8-K
if
the Company were required to file such reports.
All
such
reports shall be prepared in all material respects in accordance with all of
the
rules and regulations applicable to such reports. Each annual report on Form
10-K shall include a report on the Company’s consolidated financial statements
by the Company’s certified independent accountants. In addition, the Company
shall file a copy of each of the reports referred to in clauses (1) and (2)
above with the SEC for public availability within the time periods specified
in
the rules and regulations applicable to such reports (unless the SEC will not
accept such a filing) and, if the SEC will not accept such a filing, shall
post
the reports on its website within those time periods.
If,
at
any time, the Company is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Company shall nevertheless
continue filing the reports specified in the preceding paragraphs of this
Section 4.03 with the SEC within the time periods specified above unless the
SEC
will not accept such a filing. The Company shall not take any action for the
purpose of causing the SEC not to accept any such filings. If, notwithstanding
the foregoing, the SEC will not accept the Company’s filings for any reason, the
Company shall post the reports referred to in the preceding paragraphs on its
website within the time periods that would apply if the Company were required
to
file those reports with the SEC.
In
addition, the Company agrees that, for so long as any Notes remain outstanding,
if at any time it is not required to file with the SEC the reports required
by
the preceding paragraphs, it shall furnish to the Holders of Notes and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
In
addition, the Company agrees that, for so long as any Notes remain outstanding,
if at any time it is not required to file with the SEC the reports required
by
the preceding paragraphs, it shall furnish to the Holders of Notes and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Delivery
of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers’ Certificates).
So
long
as is required for offers and sales of the Notes to qualify for an exemption
under Rule 144A under the Securities Act, the Corporation shall, upon request,
provide the information required by Rule 144A(d)(4) to each Holder of Notes
and
to each beneficial owner and prospective purchaser of
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32 -
Notes
identified by each Holder of Notes, unless such information is furnished to
the
Commission pursuant to Section 13 or 15(d) of the Exchange Act. For purposes
of
this Section 4.03, the Company will be deemed to have furnished or delivered
reports to the Trustee and the Noteholders if (i) such reports are filed with
the Commission via the EDGAR filing system, (ii) such reports are currently
available, and (iii) the Corporation electronically delivers to the Trustee
a
link to the EDGAR filing each time the Company files such a report.
Section
4.04 Compliance
Certificate.
(a) The
Company and each Guarantor (to the extent that such Guarantor is so required
under the TIA) shall deliver to the Trustee, within 90 days after the end of
each fiscal year, an Officers’ Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal
year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled
its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained
in
this Indenture and is not in default in the performance or observance of any
of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking
or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect
thereto.
(b) So
long
as not contrary to the then current recommendations of the American Institute
of
Certified Public Accountants, the year-end financial statements delivered
pursuant to Section 4.03 above shall be accompanied by a written statement
of
the Company’s independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of Article
4
or Article 5 hereof or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) So
long
as any of the Notes are outstanding, the Company shall comply with the notice
delivery requirements of Section 314(b) of the TIA.
(d) So
long
as any of the Notes are outstanding, the Company shall deliver to the Trustee,
forthwith upon any Officer becoming aware of any Default or Event of Default,
an
Officers’ Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
Section
4.05 Taxes.
The
Company shall pay, and shall cause each of its Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where
the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.
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Section
4.06 Stay,
Extension and Usury Laws.
The
Company and each of the Guarantors covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company
and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it
shall not, by resort to any such law, hinder, delay or impede the execution
of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section
4.07 Dividends
Paid on Depositary Units.
In
case
the Company shall declare a cash dividend or similar cash distribution in
respect of any calendar quarter (a “Triggering
Distribution”)
in
respect of its Depositary Units in an amount in excess of $0.10 per Depositary
Unit (as adjusted for splits, reverse splits and/or stock dividends effected
after the Issue Date
-
any such adjustment to be determined by the Company in good faith, absent
manifest error)
(the
“Triggering
Distribution Threshold Amount”),
it
shall at the same time as it makes such distribution to holders of the
Depositary Units distribute to each Holder in respect of each $1,000 principal
amount of the Notes held by such Holder on the applicable record date for such
Triggering Distribution that amount obtained by multiplying (a) the amount
of
the Triggering Distribution per outstanding Depositary Unit as of such
applicable record date in excess of the Triggering Distribution Threshold Amount
by (b) the Conversion Rate in effect on the Business Day immediately prior
to
the record date for such distribution in respect of the Depositary Units. It
is
expressly understood that a stock buyback, repurchase or similar transaction
or
program shall in no event be considered a Triggering Distribution for purposes
of this Section 4.07.
Section
4.08 Transactions
with Affiliates.
(a) AREP
shall not, and shall not permit any of its Subsidiaries (including any
Guarantor) to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, any Affiliate of
AREP
(each, an “Affiliate Transaction”), unless:
(1)
the
Affiliate Transaction is on terms that are not materially less favorable to
AREP
or the relevant Subsidiary (including any Guarantor) than those that would
have
been obtained in a comparable transaction by AREP or such Subsidiary (including
any Guarantor) with an unrelated Person as determined in good faith by the
Board
of Directors of AREP; and
(2)
AREP
delivers to the Trustee:
(A) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $2.0 million, a resolution of
the
Board of Directors of AREP set forth in an Officers’ Certificate certifying that
such Affiliate Transaction complies with this Section 4.08 and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of AREP; and
(B) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, an opinion
as
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34 -
to
the
fairness to AREP or such Subsidiary (including any Guarantor) of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal
or
investment banking firm of recognized standing.
(b) The
following items shall not be deemed to be Affiliate Transactions and, therefore,
shall not be subject to the provisions of Section 4.08(a):
(1)
any
employment agreement, employee benefit plan, officer or director indemnification
agreement or any similar arrangement entered into by AREP or any of its
Subsidiaries (including any Guarantor) in the ordinary course of business and
payments pursuant thereto including payments or reimbursement of payments by
API
with respect to any such agreement, plan or arrangement entered into by API
with
respect to or for the benefit of officers or directors of API (other than any
such agreements, plans or arrangements entered into by AREP or any of its
Subsidiaries (including AREH) with Carl Icahn (other than employee benefit
plans
and officer or director indemnification agreements generally applicable to
officers and directors of API, AREP or its Subsidiaries (including
AREH)));
(2)
transactions
between or among AREP, any Guarantor and/or their respective Subsidiaries
(except any Subsidiaries of which Carl Icahn or Affiliates of Carl Icahn (other
then AREP, AREH or their Subsidiaries) own more than 10% of the Voting
Stock);
(3)
payment
(or reimbursement of payments by API) of directors’ fees to Persons who are not
otherwise Affiliates of AREP;
(4)
any
issuance of Equity Interests (other than Disqualified Stock) and Preferred
Unit
Distributions of AREP to Affiliates of AREP;
(5)
Restricted
Payments as defined in the 2005 Indenture that do not violate Section 4.07
thereof (and after the 2005 Indenture shall have been defeased, which would
not
have violated the 2005 Indenture if made on the day immediately preceding such
defeasance);
(6)
transactions
between AREP and/or any of its Subsidiaries (including any Guarantor), on the
one hand, and other Affiliates, on the other hand, for the provision of goods
or
services in the ordinary course of business by such other Affiliates;
provided
that
such other Affiliate is in the business of providing such goods or services
in
the ordinary course of business to unaffiliated third parties and the terms
and
pricing for such goods and services overall are not less favorable to AREP
and/or its Subsidiaries (including AREH) than the terms and pricing upon which
such goods and services are provided to unaffiliated third parties;
(7)
the
provision or receipt of accounting, financial, management, information
technology and other ancillary services to or from Affiliates, provided
that
AREP or its Subsidiaries (including any Guarantor) in the case of the provision
of such services, are paid a fee not less than its out of pocket costs and
allocated overhead (including a portion of salaries and benefits) and in the
case of the receipt of such services, paid a fee not more than such Person’s
out-of-pocket costs and allocated overhead (including a portion of salaries
and
benefits), in each case, as determined by AREP in its reasonable
judgment;
(8)
the
license of a portion of office space pursuant to (x) a license agreement entered
into in July 2005, between AREP and an Affiliate of API, (y) a license
arrangement which commenced in October 2006 between an Affiliate of the
Principal and AREP, and (z) any renewal of either thereof ;
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35 -
(9)
the
payment to API and reimbursements of payments made by API of expenses relating
to AREP’s, AREH’s or any Guarantors’ status as a public company;
(10)
payments
by AREH, AREP or any Subsidiary to API in connection with services provided
to
AREH, AREP or any Subsidiary in accordance with the AREP Partnership Agreement;
and
(11)
Any
direct or indirect acquisition of capital stock or assets of Lear Corporation,
American Railcar, Inc. or Philips Services Corporation, whether pursuant to
a
stock purchase, an asset purchase, a merger or otherwise.
Section
4.09 Corporate
Existence.
Subject
to Article 5 hereof, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect:
(1)
its
partnership or corporate or limited liability company existence, in accordance
with the respective organizational documents (as the same may be amended from
time to time) of the Company; and
(2)
the
rights (charter and statutory), licenses and franchises of the
Company.
Section
4.10 Compliance
with Law
AREP
shall, and shall cause its Subsidiaries (including any Guarantor) to, comply
in
all material respects with all applicable laws, rules and
regulations.
Section
4.11 No
Investment Company
Neither
AREP nor any Guarantor shall register as an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended.
ARTICLE
5
SUCCESSORS
Section
5.01 Merger,
Consolidation, or Sale of Assets.
(a) AREP
will
not: (x) consolidate or merge with or into another Person (whether or not AREP,
is the surviving entity) or (y) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of AREP in
one
or more related transactions, to another Person; unless:
(1)
either:
(A) AREP
is
the surviving entity, or
(B) the
Person formed by or surviving any such consolidation or merger (if other than
AREP) or to which such sale, assignment, transfer, conveyance or other
disposition has been made is a corporation, limited liability company or limited
partnership entity
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36 -
organized
or existing under the laws of the United States, any state of the United States
or the District of Columbia;
(2)
the
Person formed by or surviving any such consolidation or merger (if other than
AREP) or the Person to which such sale, assignment, transfer, conveyance or
other disposition has been made assumes all the obligations of AREP under the
Notes, this Indenture and the Registration Rights Agreement and upon such
assumption such Person will become the successor to, and be substituted for,
AREP hereunder and thereunder and all references to AREP in each thereof shall
then become references to such Person and such Person shall thereafter be able
to exercise every right and power of AREP hereunder and thereunder;
(3)
immediately
after such transaction no Default or Event of Default exists; and
(4)
AREP
has
delivered to the Trustee an Officers’ Certificate and Opinion of Counsel, which
may be an opinion of in-house counsel of AREP or an Affiliate, each stating
that
such transaction complies with the terms of this Indenture.
Clauses
(1) or (2) above will not apply to, or be required to be complied with in
connection with, any merger or consolidation or the sale, assignment, transfer,
conveyance or other disposition of all or substantially all of AREP’s properties
or assets to:
(1)
an
Affiliate that has no material assets or liabilities where the primary purpose
of such transaction is to change AREP into a corporation or other form of
business entity or to change the jurisdiction of formation of AREP and such
transaction does not cause the realization of any material federal or state
tax
liability that will be paid by AREP or any of its Subsidiaries (including AREH).
For purposes of this paragraph (1), the term material refers to any assets,
liabilities or tax liabilities that are greater than 5.0% of the Tangible Net
Worth of AREP and its Subsidiaries (including AREH) on a consolidated basis;
or
(2)
any
Person; provided
that
AREP receives consideration in Cash Equivalents and marketable securities with
an aggregate Fair Market Value determined at the time of the execution of such
relevant agreement of at least $1.0 billion for such merger or consolidation
or
the sale, assignment, transfer, conveyance or other disposition of all or
substantially all of AREP’s properties or assets. In any transaction referred to
in this clause (2), and subject to the terms and conditions thereof, the Trustee
shall, without the need of any action by the Holders, (x) confirm that such
other Person shall not be liable for and shall release such other Person from
any obligation of AREP’s under this Indenture and the Notes and (y) release any
Guarantor from all obligations under its Note Guarantee if such Guarantor was
directly or indirectly sold, assigned, transferred, conveyed or otherwise
disposed of to such Person in such transaction.
In
addition, AREP may not lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person. In the case
of
a lease of all or substantially all of the assets of AREP, AREP will not be
released from its obligations under the Notes or this Indenture, as
applicable.
(b) AREH
will
not: (x) consolidate or merge with or into another Person (whether or not AREH,
is the surviving entity) or (y) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of AREH in
one
or more related transactions, to another Person; unless:
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37 -
(1)
either:
(i) AREH is the surviving entity, or (ii) the Person formed by or surviving
any
such consolidation or merger (if other than AREH) or to which such sale,
assignment, transfer, conveyance or other disposition has been made is a
corporation, limited liability company or limited partnership entity organized
or existing under the laws of the United States, any state of the United States
or the District of Columbia;
(2)
the
Person formed by or surviving any such consolidation or merger (if other than
AREH) or the Person to which such sale, assignment, transfer, conveyance or
other disposition has been made assumes all the obligations of AREH under the
Note Guarantee (and becomes a Guarantor), the Notes, this Indenture and the
Registration Rights Agreement, and upon such assumption such Person will become
the successor to, and be substituted for, AREH hereunder and thereunder, and
all
references to AREH in each thereof shall than become references to such Person
and such Person shall thereafter be able to exercise every right and power
of
AREH hereunder and thereunder;
(3)
immediately
after such transaction no Default or Event of Default exists; and
(4)
AREH
has
delivered to the Trustee an Officers’ Certificate and Opinion of Counsel which
may be an opinion of in-house counsel of AREP or an Affiliate, each stating
that
such transaction complies with the terms of this Indenture.
Clauses
(1) or (2) above will not apply to, or be required to be complied with in
connection with, any merger or consolidation or the sale, assignment, transfer,
conveyance or other disposition of all or substantially all of AREH’s properties
or assets to:
(1)
an
Affiliate that has no material assets or liabilities where the primary purpose
of such transaction is to change AREH into a corporation or other form of
business entity or to change the jurisdiction of formation of AREH and such
transaction does not cause the realization of any material federal or state
tax
liability that will be paid by AREP or any of its Subsidiaries (including AREH).
For purposes of this paragraph (1), the term material refers to any assets,
liabilities or tax liabilities that are greater than 5.0% of the Tangible Net
Worth of AREP and its Subsidiaries (including AREH) on a consolidated
basis;
(2)
any
Person; provided
that
AREP receives consideration in Cash Equivalents and marketable securities with
an aggregate Fair Market Value determined at the time of the execution of such
relevant agreement of at least $1.0 billion for such merger or consolidation
or
the sale, assignment, transfer, conveyance or other disposition of all or
substantially all of AREH’s properties or assets; or
(3)
any
Person; provided
that
AREH receives consideration in Cash Equivalents and marketable securities with
an aggregate Fair Market Value determined at the time of the execution of such
relevant agreement of at least $1.0 billion for such merger or consolidation
or
the sale, assignment, transfer, conveyance or other disposition of all or
substantially all of AREH’s properties or assets and AREH remains a Subsidiary
of AREP.
In
any
transaction referred to in clause (2) or (3) above, and subject to the terms
and
conditions thereof, the Trustee shall, without the need of any action by the
Holders, (x) confirm that such other Person shall not be liable for and shall
release such other Person from any obligation of AREP’s or AREH’s under this
Indenture, the Notes and the Note Guarantees, and (y) release any Guarantor
from
all
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obligations
under its Note Guarantee if such Guarantor was directly or indirectly sold,
assigned, transferred, conveyed or otherwise disposed of to such Person in
such
transaction.
(c) This
Section 5.01 will not apply to:
(1)
any
consolidation or merger, or any sale, assignment, transfer, conveyance, lease
or
other disposition of assets between or among AREP, AREH or any one or more
Guarantors; or
(2)
any
sale,
assignment, transfer, conveyance or other disposition of Cash Equivalents,
including, without limitation, any investment or capital contribution of Cash
Equivalents, or any purchase of property and assets, including, without
limitation, securities, debt obligations or Capital Stock, with Cash
Equivalents.
Section
5.02 Relief
from Obligation.
Except
as
provided in the Indenture, neither AREP nor AREH shall be relieved from the
obligation to pay the principal of and interest on the Notes.
ARTICLE
6
DEFAULTS
AND REMEDIES
Section
6.01 Events
of Default.
(a)
Each
of the following is an “Event
of Default”:
(1)
the
Company defaults for 30 days in the payment when due of interest on, or
Additional Interest with respect to, the Notes or under any Note
Guarantee;
(2)
the
Company defaults in the payment when due and payable (at maturity, upon
repurchase or otherwise) of the principal of, or premium, if any (including
any
Make-Whole Premium), on the Notes or under any Note Guarantee;
(3)
failure
by the Company to comply with the provisions of Article 13 hereof;
(4)
the
Company or any Guarantor fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes
or
the Note Guarantee for 60 days after notice to the Company by the Trustee or
the
Holders of at least 25% in aggregate principal amount of the outstanding
Notes voting
as
a single class;
(5)
any
default under any mortgage, indenture or instrument (other than the Indebtedness
covered by clause (6) below) under which there is issued or by which there
is
secured or evidenced any Indebtedness for money borrowed by the Company or
any
Guarantor or default on any Guarantee by the Company or any Guarantor of
Indebtedness, whether such Indebtedness or Guarantee now exists or is created
after the Issuance Date, which default:
(A) is
caused
by a failure to pay when due at final maturity (giving effect to any grace
period or waiver related thereto) the principal of such Indebtedness (a
“Payment
Default”);
or
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(B) results
in the acceleration of such Indebtedness prior to its express maturity and,
in
each case, the principal amount of any such Indebtedness as to which AREP or
any
Guarantor is obligated to pay, together with the principal amount of any other
such Indebtedness under which a Payment Default then exists or with respect
to
which the maturity thereof has been so accelerated or which has not been paid
at
maturity as to which AREP or any Guarantor is obligated to pay, aggregates
$10.0
million or more;
(6)
any
default under any of (i) the 8 1/8% Senior Notes, (ii) the 7 1/8% Senior Notes,
(iii) the 2004 Indenture, (iv) the 2005 Indenture, (v) any other unsecured
Indebtedness as to which AREP or any Guarantor is obligated to pay, aggregates
$10.0 million or more or (vi) any documentation governing the terms of any
such
Indebtedness (collectively, the “Clause
(6) Indetbedness”),
in
any such case: (A) which default results in the acceleration (which acceleration
has not been rescinded or otherwise withdrawn) of such Clause (6) Indebtedness
prior to its express maturity or (B) if such default is waived by the applicable
required holders and/or lenders as required by the documentation governing
the
terms of such Clause (6) Indebtedness (in respect of which waiver negotiations
Holders shall have no rights), any consideration paid in respect of any such
waiver to such holders and/or lenders, as applicable shall not have been
simultaneously paid proportionately to the Holders (i.e.
if $x is
paid per $1000 of principal amount of note or outstanding amount of such Clause
(6) Indebtedness in connection with a waiver of a default thereunder, the
Holders will each receive $x per $1000 outstanding principal amount of the
Notes
in respect of such waiver);
(7)
the
Company’s (i) failure to cure a Conversion Failure by delivery of the required
number of Depositary Units within ten (10) Business Days after the applicable
Conversion Date or Forced Conversion Date or (ii) notice, written or oral,
to
any Holder, including by way of public announcement or through any of its
agents, at any time, of its intention not to comply with a request for
conversion of any Notes into Depositary Units that are tendered in accordance
with the provisions of this Indenture;
(8)
failure
by the Company or any Guarantor to pay final judgments aggregating in excess
of
$10.0 million, which final judgments remain unpaid, undischarged or unstayed
for
a period of more than 60 days after such judgment becomes a final
judgment;
(9)
except
as
permitted by this Indenture, any Note Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to
be in
full force and effect, or AREH or any other Guarantor, or any Person acting
on
behalf of any Guarantor, shall deny or disaffirm its obligations under its
Note
Guarantee;
(10)
the
Company or any Subsidiary of the Company that is a Significant Subsidiary or
any
group of Subsidiaries of the Company that, taken together, would constitute
a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(A) commences
a voluntary case,
(B) consents
to the entry of an order for relief against it in an involuntary
case,
(C) consents
to the appointment of a custodian of it or for all or substantially all of
its
property,
(D) makes
a
general assignment for the benefit of its creditors, or
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(E) generally
is not paying its debts as they become due; or
(11)
a
court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:
(A) is
for
relief against the Company or any Subsidiary of the Company that is a
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary in an involuntary
case;
(B) appoints
a custodian of the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary or for all or substantially all of
the
property of the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary; or
(C) orders
the liquidation of the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary;
(D) and
the
order or decree remains unstayed and in effect for 60 consecutive
days.
(b)
Notwithstanding
the foregoing, for so long as any Clause (6) Indebtedness is outstanding, if
the
Company pays any consideration in respect of any waiver to holders and/or
lenders, as applicable, under any Clause (6) Indebtedness, it shall
simultaneously pay the same consideration proportionately to the Holders
(i.e.
if $x is
paid per $1000 of principal amount of note or outstanding amount of such Clause
(6) Indebtedness in connection with a waiver thereunder, the Holders will each
receive $x per $1000 outstanding principal amount of the Notes in respect of
such waiver). Without limiting the foregoing, (i) if an Event of Default
of the type described in Section 6.01(a)(5) or (8) is waived by the applicable
required holders as required by the documentation governing the terms of such
Clause (6) Indebtedness (in respect of which waiver negotiations Holders shall
have no rights), the same Event of Default will be deemed waived by the Holders,
or (ii) if compliance with any provision in any such Clause (6) Indebtedness
is
waived by the applicable required holders as required by the documentation
governing the terms of such Clause (6) Indebtedness (in respect of which waiver
negotiations Holders shall have no rights), any comparable provision of this
Indenture will be deemed waived by the Holders, in either
such case provided that the Company shall have complied with the provisions
of
the immediately preceding sentence.
Section
6.02 Acceleration.
In
the
case of an Event of Default specified in clause (10) or (11) of Section 6.01(a)
hereof, with respect to the Company, any Guarantor that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary, all outstanding Notes will become
due
and payable immediately without further action or notice. If any other Event
of
Default occurs and is continuing, the Trustee or the Holders of at least 25%
in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately.
Upon
any
such declaration, the Notes shall become due and payable
immediately.
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The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may, on behalf of all of the Holders,
rescind an acceleration and its consequences, if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Additional Interest,
if
any, that has become due solely because of the acceleration) have been cured
or
waived.
Notwithstanding
the foregoing, in the event that the Notes are accelerated pursuant to this
Section 6.02 as a result of an Event of Default specified in clause (6) of
Section 6.01(a), or for so long as any Clause (6) Indebtedness is outstanding,
clause (5) or (8) of Section 6.01(a), such acceleration shall automatically
be
rescinded, without further action of the Holders or the Trustee, if (a) either
(i) the default that triggered such Event of Default is cured or waived or
(ii)
the acceleration of any Indebtedness that triggered such Event of Default is
rescinded or otherwise withdrawn, and (b) any consideration paid to holders
and/or lenders of Clause (6) Indebtedness in respect of any such waiver or
rescission referred to in the preceding clause (a) shall have been
simultaneously paid proportionately to the Holders (i.e.
if $x is
paid per $1000 of principal amount of note or outstanding amount of such Clause
(6) Indebtedness in connection with a waiver of a default thereunder, the
Holders will each receive $x per $1000 outstanding principal amount of the
Notes
in respect of such waiver).
Section
6.03 Other
Remedies.
If
an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of principal, premium and Additional Interest,
if
any, and interest on the Notes or to enforce the performance of any provision
of
the Notes or this Indenture.
The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder of a Note in exercising any right or remedy accruing
upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. All remedies are cumulative to
the
extent permitted by law.
Section
6.04 Waiver
of Past Defaults.
Holders
of not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of
all
of the Notes waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of
the
principal of, premium and Additional Interest, if any, or interest on, the
Notes
(including in connection with an offer to purchase); provided,
however,
that
the Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration. Upon any such waiver,
such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
Section
6.05 Control
by Majority.
Holders
of a majority in aggregate principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
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Section
6.06 Limitation
on Suits.
A
Holder
may pursue a remedy with respect to this Indenture or the Notes only
if:
(1)
such
Holder gives to the Trustee written notice that an Event of Default is
continuing;
(2)
Holders
of at least 25% in aggregate principal amount of the then outstanding Notes
make
a written request to the Trustee to pursue the remedy;
(3)
such
Holder or Holders offer and, if requested, provide to the Trustee security
or
indemnity reasonably satisfactory to the Trustee against any loss, liability
or
expense;
(4)
the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and
(5)
during
such 60-day period, Holders of a majority in aggregate principal amount of
the
then outstanding Notes do not give the Trustee a direction inconsistent with
such request.
A
Holder
of a Note may not use this Indenture to prejudice the rights of another Holder
of a Note or to obtain a preference or priority over another Holder of a
Note.
Section
6.07 Rights
of Holders of Notes to Receive Payment.
Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal, premium and Additional Interest, if any, and
interest on the Note, on or after the respective due dates expressed in the
Notes (including in connection with an offer to purchase) or any Fundamental
Change Settlement Date, as applicable, and to convert the Notes in accordance
with Article 12, or to bring suit for the enforcement of any such payment or
conversion right on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section
6.08 Collection
Suit by Trustee.
If
an
Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Additional Interest, if any, and interest remaining
unpaid on, the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel.
Section
6.09 Trustee
May File Proofs of Claim.
The
Trustee is authorized to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders of the
Notes allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Notes), its creditors or its property and shall be entitled
and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to
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pay
to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall
be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee
to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of
reorganization, arrangement, adjustment or composition affecting the Notes
or
the rights of any Holder, or to authorize the Trustee to vote in respect of
the
claim of any Holder in any such proceeding.
Section
6.10 Priorities.
If
the
Trustee collects any money pursuant to this Article 6, it shall pay out the
money in the following order:
First: to
the
Trustee, its agents and attorneys for amounts due under Section 7.07 hereof,
including payment of all compensation, expenses and liabilities incurred, and
all advances made, by the Trustee and the costs and expenses of
collection;
Second: to
Holders of Notes for amounts due and unpaid on the Notes for principal, premium
and Additional Interest, if any, and interest, ratably, without preference
or
priority of any kind, according to the amounts due and payable on the Notes
for
principal, premium and Additional Interest, if any and interest, respectively;
and
Third: to
the
Company or to such party as a court of competent jurisdiction shall
direct.
The
Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section 6.10.
Section
6.11 Undertaking
for Costs.
In
any
suit for the enforcement of any right or remedy under this Indenture or in
any
suit against the Trustee for any action taken or omitted by it as a Trustee,
a
court in its discretion may require the filing by any party litigant in the
suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith
of
the claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section
6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount
of the then outstanding Notes.
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ARTICLE
7
TRUSTEE
Section
7.01 Duties
of Trustee.
(a) If
an
Event of Default has occurred and is continuing of which a Responsible Officer
of the Trustee has actual knowledge or of which written notice shall have been
given to the Trustee in accordance with the terms of this Indenture, the Trustee
will exercise such of the rights and powers vested in it by this Indenture,
and
use the same degree of care and skill in its exercise, as a prudent person
would
exercise or use under the circumstances in the conduct of such person’s own
affairs.
(b) Except
during the continuance of an Event of Default of which a Responsible Officer
of
the Trustee has actual knowledge or of which written notice shall have been
given to the Trustee in accordance with the terms of this
Indenture:
(1)
the
duties of the Trustee will be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
(2)
in
the
absence of bad faith on its part, the Trustee may conclusively rely, as to
the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee shall be under no duty to make
any
investigation as to any statement contained in any such instance, but may accept
the same as conclusive evidence of the truth and accuracy of such statement
or
the correctness of such opinions. However, the Trustee will examine the
certificates and opinions to determine whether or not they conform on their
face
to the requirements of this Indenture, but shall not verify the contents
thereof.
(c) The
Trustee may not be relieved from liabilities for its own negligent action,
its
own negligent failure to act, or its own willful misconduct, except
that:
(1)
this
paragraph does not and shall not be construed to limit the effect of paragraph
(b) of this Section 7.01;
(2)
the
Trustee will not be liable for any error of judgment made in good faith by
a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3)
the
Trustee will not be liable with respect to any action it takes or omits to
take
in good faith in accordance with a direction received by it pursuant to Section
6.05 hereof.
The
Trustee shall not be required to examine any of the reports, information or
documents delivered to it under this Indenture to determine whether there has
been any breach of the covenants of the Company contained herein, except that
if
any breach or default is expressly stated in any such reports, information
or
documents, the Trustee shall be deemed to have actual knowledge of such breach
or default.
(d) Whether
or not therein expressly so provided, every provision of this Indenture that
in
any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of
this Section 7.01.
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(e) No
provision of this Indenture will require the Trustee to expend or risk its
own
funds or incur any liability.
(f) The
Trustee will not be liable for interest on any money received by it except
as
the Trustee may agree in writing with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by
law.
Section
7.02 Rights
of Trustee.
(a) The
Trustee may conclusively rely upon any document believed by it to be genuine
and
to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in any such document.
(b) Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee will not be liable
for
any action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel. The Trustee may consult with counsel of
its
choice and the written advice of such counsel or any Opinion of Counsel will
be
full and complete authorization and protection from liability in respect of
any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The
Trustee may act through its attorneys and agents and will not be responsible
for
the misconduct or negligence of any attorney or agent appointed with due
care.
(d) The
Trustee will not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within the rights or powers conferred
upon it by this Indenture.
(e) Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company or any Guarantor will be sufficient if
signed by an Officer of the Company or any Guarantor, as
applicable.
(f) The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, note or other paper
or document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney, at the expense of the Company and shall
incur no liability of any kind by reason of such inquiry or
investigation.
(g) The
Trustee will be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders
unless such Holders have offered to the Trustee indemnity or security
satisfactory to it against the losses, liabilities and expenses that might
be
incurred by it in compliance with such request or direction.
(h) The
rights, privileges, protections, immunities and benefits given to the Trustee,
including its right to be indemnified, are extended to, and shall be enforceable
by, the Trustee in each of its capacities hereunder and each agent, custodian
and other Person employed to act hereunder.
(i) The
Trustee shall not be liable for any action taken or omitted by it in good faith
at the direction of the Holders of not less than a majority in principal amount
of the Securities as to the time,
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46 -
method
and place of conducting any proceedings for any remedy available to the Trustee
or the exercising of any power conferred by this Indenture.
(j) Any
action taken, or omitted to be taken, by the Trustee in good faith pursuant
to
this Indenture upon the request or authority or consent of any person who,
at
the time of making such request or giving such authority or consent, is the
Holder of any Security shall be conclusive and binding upon future Holders
of
Securities and upon Securities executed and delivered in exchange therefor
or in
place thereof.
Section
7.03 Individual
Rights of Trustee.
The
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and, subject to TIA §310(b), may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights and duties.
Section
7.04 Trustee’s
Disclaimer.
The
Trustee will not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Notes or the Note Guarantee, it
shall not be accountable for the Company’s use of the proceeds from the Notes or
any money paid to the Company or upon the Company’s direction under any
provision of this Indenture, it will not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it will not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of
the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section
7.05 Notice
of Defaults.
If
a
Default or Event of Default occurs and is continuing of which a Responsible
Officer of the Trustee has actual knowledge, the Trustee will mail to Holders
of
Notes a notice of the Default or Event of Default within 90 days after such
Responsible Officer has actual knowledge of such Default or Event of Default.
Except in the case of a Default or Event of Default in payment of principal
of,
premium or Additional Interest, if any, or interest on, any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.
Section
7.06 Reports
by Trustee to Holders of the Notes.
(a) Within
60
days after each May 15 beginning with the May 15, 2008, and for so long as
Notes
remain outstanding, the Trustee will mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA § 313(a) (but
if no event described in TIA § 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA § 313(b)(2). The Trustee will also transmit by mail
all reports as required by TIA § 313(c).
(b) A
copy of
each report at the time of its mailing to the Holders of Notes will be mailed
by
the Trustee to the Company and filed by the Trustee with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA § 313(d). The
Company will promptly notify the Trustee when the Notes are listed on any stock
exchange.
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Section
7.07 Compensation
and Indemnity.
(a) The
Company will pay to the Trustee from time to time reasonable compensation for
its acceptance of this Indenture and services hereunder. The Trustee’s
compensation will not be limited by any law on compensation of a trustee of
an
express trust. The Company will reimburse the Trustee promptly upon request
for
all reasonable disbursements, advances and expenses incurred or made by it
in
addition to the compensation for its services. Such expenses will include the
reasonable compensation, disbursements, costs and expenses of the Trustee’s
agents, consultants and counsel (including the costs and expenses of collection
on the Notes and the Note Guarantees and the enforcement and administration
of
any right or remedy or observing any of its duties under this
Indenture).
(b) The
Company and each Guarantor will indemnify the Trustee and hold the Trustee
harmless against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing
this
Indenture against the Company and each Guarantor (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company, each
Guarantor, any Holder or any other Person) or liability in connection with
the
exercise or performance of any of its powers or duties hereunder, except any
such loss, liability or expense attributable to its negligence or bad faith.
The
Trustee will notify the Company and each Guarantor promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
and
each Guarantor will not relieve the Company or any of the Guarantors of their
obligations hereunder. The Company or such Guarantor will defend the claim
and
the Trustee will cooperate in the defense. The Trustee may have separate counsel
and the Company will pay the reasonable fees and expenses of such counsel.
Neither the Company nor any Guarantor need pay for any settlement made without
its consent, which consent will not be unreasonably withheld.
(c) The
obligations of the Company and each Guarantor under this Section 7.07 shall
constitute additional Indebtedness hereunder and will survive the satisfaction
and discharge of this Indenture.
(d) To
secure
the Company’s and each Guarantor’s payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) The
Company’s and the Guarantors’ payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. Without prejudice to any other rights available to
the
Trustee under applicable law, when
the
Trustee incurs expenses or renders services after an Event of Default specified
in Section 6.01(a)(10) or (11) hereof occurs, the expenses and the compensation
for the services (including the fees and expenses of its agents and counsel)
are
intended to constitute expenses of administration under any Bankruptcy
Law.
(f) The
Trustee will comply with the provisions of TIA § 313(b)(2) to the extent
applicable.
Section
7.08 Replacement
of Trustee.
(a) A
resignation or removal of the Trustee and appointment of a successor Trustee
will become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.
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(b) The
Trustee may resign in writing at any time and be discharged from the trust
hereby created by so notifying the Company. The Holders of a majority in
aggregate principal amount of the then outstanding Notes may remove the Trustee
by so notifying the Trustee and the Company in writing. The Company may remove
the Trustee if:
(1)
the
Trustee fails to comply with Section 7.10 hereof;
(2)
the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered
with respect to the Trustee under any Bankruptcy Law;
(3)
a
custodian or public officer takes charge of the Trustee or its property;
or
(4)
the
Trustee becomes incapable of acting.
(c) If
the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company will promptly appoint a successor Trustee. Within
one year after the successor Trustee takes office, the Holders of a majority
in
aggregate principal amount of the then outstanding Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
(d) If
a
successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company, or the Holders of
at
least 10% in aggregate principal amount of the then outstanding Notes may
petition any court of competent jurisdiction, at the expense of the Company
for
the appointment of a successor Trustee.
(e) If
the
Trustee, after written request by any Holder who has been a Holder for at least
six months, fails to comply with Section 7.10 hereof, such Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(f) A
successor Trustee will deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Thereupon, the resignation or removal
of
the retiring Trustee will become effective, and the successor Trustee will
have
all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee will mail a notice of its succession to Holders. The retiring
Trustee will promptly transfer all property held by it as Trustee to the
successor Trustee; provided
all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company’s obligations under Section 7.07 hereof will
continue for the benefit of the retiring Trustee.
Section
7.09 Successor
Trustee by Merger, etc.
If
the
Trustee consolidates, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, the successor
corporation without any further act will be the successor Trustee.
Section
7.10 Eligibility;
Disqualification.
There
will at all times be a Trustee hereunder that is a corporation organized and
doing business under the laws of the United States of America or of any state
thereof that is authorized under such laws to exercise corporate trustee power,
that is subject to supervision or examination by federal or state authorities
and that has a combined capital and surplus of at least $100.0 million as set
forth in its most recent published annual report of condition.
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This
Indenture will always have a Trustee who satisfies the requirements of TIA
§ 310(a)(1), (2) and (5). The Trustee is subject to TIA
§ 310(b).
Section
7.11 Preferential
Collection of Claims Against Company.
The
Trustee is subject to TIA § 311(a), excluding any creditor relationship
listed in TIA § 311(b). A Trustee who has resigned or been removed shall be
subject to TIA § 311(a) to the extent indicated therein.
ARTICLE
8
COVENANT
DEFEASANCE
Section
8.01 Company
May Effect Covenant Defeasance.
The
Company may at any time, at the option of its Board of Directors evidenced
by a
resolution set forth in an Officers’ Certificate, elect to have Section 8.03
hereof be applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article 8.
Section
8.02 Legal
Defeasance and Discharge.
Legal
defeasance of the Notes shall only occur upon satisfaction and discharge of
the
Notes as set forth in Article 11.
Section
8.03 Covenant
Defeasance.
Upon
the
Company’s exercise of the option under Section 8.01 hereof applicable to this
Section 8.03, the Company and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.08,
4.10 and 4.11 hereof, Section 5.01(a)(4) and Section 5.01(b)(4) hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 hereof are satisfied (hereinafter, “Covenant
Defeasance”),
and
the Notes will thereafter be deemed not “outstanding” for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but will
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes will not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the
outstanding Notes and Note Guarantees, the Company and the Guarantors may omit
to comply with and will have no liability in respect of any term, condition
or
limitation set forth in any such covenant, whether directly or indirectly,
by
reason of any reference elsewhere herein to any such covenant or by reason
of
any reference in any such covenant to any other provision herein or in any
other
document and such omission to comply will not constitute a Default or an Event
of Default under Section 6.01(a) hereof, but, except as specified above, the
remainder of this Indenture and such Notes and Note Guarantees will be
unaffected thereby. In addition, upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(a)(3) through 6.01(a)(6) hereof will not constitute Events of
Default.
Section
8.04 Conditions
to Covenant Defeasance.
In
order
to exercise Covenant Defeasance under Section 8.03 hereof:
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(1)
the
Company must irrevocably deposit with the Trustee, in trust, for the benefit
of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the opinion
of a
nationally recognized investment bank, appraisal firm, or firm of independent
public accountants, to pay the principal of, premium and Additional Interest,
if
any, on the outstanding Notes on the Maturity Date, and interest in an amount
equal to five and one half percent (5.5%) of the principal amount of the
outstanding Notes through the Maturity Date, and the Company must specify
whether the Notes are being defeased to such stated date for
payment;
(2)
the
Company must deliver to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will
be
subject to federal income tax on the same amounts, substantially in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(3)
no
Default or Event of Default shall have occurred and be continuing on the date
of
such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) and the deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound;
(4)
such
Covenant Defeasance will not result in a breach or violation of, or constitute
a
default under, any material agreement or instrument (other than this Indenture)
to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(5)
the
Company must deliver to the Trustee an Opinion of Counsel, containing customary
assumptions and exceptions, to the effect that upon and immediately following
the deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally under any applicable law;
(6)
the
Company must deliver to the Trustee an Officers’ Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders
of
Notes over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding any creditors of the Company or others;
and
(7)
the
Company must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Covenant
Defeasance have been complied with.
Section
8.05 Deposited
Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.
Subject
to Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the “Trustee”)
pursuant to Section 8.04 hereof in respect of the outstanding Notes will be
held
in trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium and Additional Interest, if any, and
interest, but such money need not be segregated from other funds except to
the
extent required by law.
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The
Company will pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the cash or non-callable Government Securities
deposited pursuant to Section 8.04 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law
is
for the account of the Holders of the outstanding Notes.
Notwithstanding
anything in this Article 8 to the contrary, the Trustee will deliver or pay
to
the Company from time to time upon the request of the Company any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(1) hereof),
are
in excess of the amount thereof that would then be required to be deposited
to
effect an equivalent Covenant Defeasance.
Section
8.06 Repayment
to Company.
Any
money
deposited with the Trustee or any Paying Agent, or then held by the Company,
in
trust for the payment of the principal of, premium or Additional Interest,
if
any, or interest on, any Note and remaining unclaimed for two years after such
principal, premium or Additional Interest, if any, or interest has become due
and payable shall be paid to the Company on its request or (if then held by
the
Company) will be discharged from such trust; and the Holder of such Note will
thereafter be permitted to look only to the Company for payment thereof, and
all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, will thereupon cease;
provided,
however,
that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in
the
New
York Times
and
The
Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after
a
date specified therein, which will not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section
8.07 Reinstatement.
If
the
Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable
Government Securities in accordance with Section 8.03 hereof by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Company’s and the
Guarantors’ obligations under this Indenture and the Notes and the Note
Guarantees will be revived and reinstated as though no deposit had occurred
pursuant to Section 8.03 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.03 hereof,
as
the case may be; provided,
however,
that,
if the Company makes any payment of principal of, premium or Additional
Interest, if any, or interest on, any Note following the reinstatement of its
obligations, the Company will be subrogated to the rights of the Holders of
such
Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE
9
AMENDMENT,
SUPPLEMENT AND WAIVER
Section
9.01 Without
Consent of Holders of Notes.
Notwithstanding
Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee
may
amend or supplement this Indenture or the Notes or the Note Guarantees without
the consent of any Holder of a Note:
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(1)
to
cure
any ambiguity, defect or inconsistency;
(2)
to
provide for uncertificated Notes in addition to or in place of certificated
Notes;
(3)
to
provide for the assumption of the Company’s or a Guarantor’s obligations to the
Holders of the Notes and Note Guarantees by a successor to the Company or such
Guarantor pursuant to Article 5 or Article 10 hereof;
(4)
to
make
any change that would provide any additional rights or benefits to the Holders
of the Notes or that does not adversely affect the legal rights hereunder of
any
Holder;
(5)
to
comply
with requirements of the SEC in order to effect or maintain the qualification
of
this Indenture under the TIA;
(6)
to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture as of the date hereof;
(7)
to
decrease the Conversion Price of the Notes; provided,
however,
that
such decrease shall be in accordance with the terms of this Indenture or shall
not adversely affect the interests of the Holders;
(8)
to
amend,
modify, revise or supplement this Indenture to conform to any amendments,
modifications, revisions or supplements made to any Clause (6) Indebtedness
in
respect of any provisions therein for which there are substantially identical
provisions in this Indenture, including without limitation with respect to
analogous provisions in Articles 8, 10 and 16, only to the extent that any
such
amendments, modifications, revisions or supplements are more favorable or
beneficial to the holders of such notes and the Holders; or
(9)
to
allow
any Guarantor to enter into a supplemental indenture and/or execute a Note
Guarantee with respect to the Notes.
Upon
the
request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee will join with the Company and the Guarantors in the execution
of
any amended or supplemental indenture authorized or permitted by the terms
of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee will not be obligated to enter
into such amended or supplemental indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
Section
9.02 With
Consent of Holders of Notes.
Except
as
provided below in this Section 9.02, the Company and the Trustee may amend
or
supplement this Indenture (including, without limitation, Article 13 hereof)
and
the Notes and the Note Guarantees with the consent of the Holders of at least
a
majority in aggregate principal amount of the then outstanding Notes (including,
without limitation, Additional Notes, if any) voting as a single class
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium
or Additional Interest, if any, or interest on, the Notes, except a payment
default resulting from an
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53 -
acceleration
that has been rescinded) or compliance with any provision of this Indenture
or
the Notes or the Note Guarantees may be waived with the consent of the Holders
of a majority in aggregate principal amount of the then outstanding Notes
(including, without limitation, Additional Notes, if any) voting as a single
class (including, without limitation, consents obtained in connection with
a
tender offer or exchange offer for, or purchase of, the Notes). Section
2.08 hereof shall determine which Notes are considered to be “outstanding” for
purposes of this Section 9.02.
Upon
the
request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of
the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee
of
the documents described in Section 7.02 hereof, the Trustee will join with
the
Company and the Guarantors in the execution of such amended or supplemental
indenture unless such amended or supplemental indenture directly affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but will not be obligated to,
enter into such amended or supplemental Indenture.
No
consideration shall be offered or paid to any Holder to amend or consent to
a
waiver or modification of any provision of any of this Indenture or the Notes
unless the same consideration also is offered to all Holders.
It
is not
be necessary for the consent of the Holders of Notes under this Section 9.02
to
approve the particular form of any proposed amendment, supplement or waiver,
but
it is sufficient if such consent approves the substance thereof.
After
an
amendment, supplement or waiver under this Section 9.02 becomes effective,
the
Company will mail to the Holders of Notes affected thereby a notice briefly
describing the amendment, supplement or waiver. Any failure of the Company
to
mail such notice, or any defect therein, will not, however, in any way impair
or
affect the validity of any such amended or supplemental indenture or waiver.
Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate
principal amount of the outstanding Notes voting as a single class may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes or the Note Guarantees. However, without the consent
of
each Holder affected, an amendment, supplement or waiver under this Section
9.02
may not (with respect to any Notes held by a non-consenting
Holder):
(1)
reduce
the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;
(2)
reduce
the principal of or change the fixed maturity of any Note or alter or waive
the
provisions with respect to the redemption of the Notes;
(3)
reduce
the rate of or change the time for payment of interest on any Note;
(4)
make
any
change that impairs or adversely affects the conversion rights of any
Note;
(5)
except
as
expressly provided in this Indenture, change the Conversion Price;
(6)
reduce
the Fundamental Change Repurchase Price or the Make-Whole Premium of any Note
or
amend or modify in any manner adverse to the Holders the Company’s
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obligation
to make such payments, whether through an amendment or waiver of provisions
in
the covenants, definitions or otherwise;
(7)
modify
the provisions in respect of the right of Holders to cause the Company to
repurchase Notes upon a Fundamental Change in a manner adverse to
Holders;
(8)
waive
a
Default or Event of Default in the payment of principal of, premium or interest
on the Notes (except a rescission of acceleration of the Notes by the Holders
of
at least a majority in aggregate principal amount of the then outstanding Notes
and a waiver of the payment default that resulted from such
acceleration);
(9)
make
any
Note payable in money other than that stated in the Notes;
(10)
make
any
change in the provisions of this Indenture relating to waivers of past Defaults
or the rights of Holders of Notes to receive payments of principal of or
premium, if any, or interest on the Notes;
(11)
waive
a
redemption payment with respect to any Note;
(12)
change
the ranking of the Notes in a manner adverse to the Holders;
(13)
release
any Guarantor from any of its obligations under its Note Guarantee or this
Indenture, except in accordance with the terms of this Indenture;
or
(14)
make
any
change in this Article 9 relating to the amendment and waiver
provisions.
Section
9.03 Revocation
and Effect of Consents.
Until
an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section
9.04 Notation
on or Exchange of Notes.
The
Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall, upon receipt of an Authentication Order,
authenticate new Notes that reflect the amendment, supplement or
waiver.
Failure
to make the appropriate notation or issue a new Note will not affect the
validity and effect of such amendment, supplement or waiver.
Section
9.05 Trustee
to Sign Amendments, etc.
The
Trustee will sign any amended or supplemental indenture authorized pursuant
to
this Article 9 if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of
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55 -
the
Trustee. The Company may not sign an amended or supplemental indenture until
the
Board of Directors of AREP approves it. In executing any amended or supplemental
indenture, the Trustee shall not be under any responsibility to determine the
correctness of any provisions contained therein, and will be entitled to receive
and (subject to Section 7.01 hereof) will be fully protected in relying upon,
in
addition to the documents required by Section 16.04 hereof, an Officers’
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this
Indenture.
Section
9.06 Amendments,
Modifications, Revisions or Supplements to Senior Notes
(a) If,
at
any time, the provisions of the 8 1/8% Senior Notes, the 7 1/8% Senior Notes,
the 2004 Indenture or the 2005 Indenture are amended, modified, revised or
supplemented in any manner that is favorable or beneficial to the holders of
such notes and in respect of any provisions therein for which there are
substantially identical provisions in this Indenture, the Company and the
Trustee shall, in accordance with this Article 9, including without limitation,
Section 9.01, enter into a supplemental indenture amending, modifying, revising
or supplementing this Indenture in an identical manner and no action by the
Holders shall be required hereunder for the execution or effectiveness of such
supplemental indenture.
(b) If,
at
any time, the provisions of the 8 1/8% Senior Notes, the 7 1/8% Senior Notes,
the 2004 Indenture or the 2005 Indenture are amended, modified, revised or
supplemented in any manner that is adverse to the holders of such notes and
in
respect of any provisions therein for which there are substantially identical
provisions in this Indenture, the Holders shall have the right, in their sole
discretion and in accordance with this Article 9, including without limitation,
Section 9.02, to cause this Indenture to be amended, modified, revised or
supplemented in an identical manner. Upon any such amendment, modification,
revision or supplement of the 8 1/8% Senior Notes or the 7 1/8% Senior Notes,
the Company shall, or shall cause the Trustee, in the name and at the expense
of
the Company to provide the Holders with a notice describing such amendment,
modification, revision or supplement accompanied by a request to the Holders
that such Holders consent to the same amendment, modification, revision or
supplement of this Indenture.
(c) No
consideration shall be offered or paid to any holder of the 8 1/8% Senior Notes
or the 7 1/8% Senior Notes to amend, modify, revise or supplement any provision
of any of such notes, the 2004 Indenture or the 2005 Indenture, as applicable,
for which there are substantially identical provisions in the Notes or this
Indenture, unless the same consideration also is offered to the Holders of
Notes
under this Indenture. No consideration shall be offered or paid to any holder
of
the 8 1/8% Senior Notes or the 7 1/8% Senior Notes to waive any default or
event
of default thereunder or to consent to any non-compliance with any provision
of
any of such notes, the 2004 Indenture or the 2005 Indenture, as applicable,
unless there shall be paid to the Holders (at the same time and in the same
manner) proportional consideration (i.e.
for
every $x paid per $1000 of principal amount of 7 1/8% Senior Notes or 8 1/8%
Senior Notes outstanding amount in connection with such a waiver or consent,
the
Holders will each receive $x per $1000 outstanding principal amount of the
Notes).
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ARTICLE
10
NOTE
GUARANTEES
Section
10.01. Guarantee.
(a) Subject
to this Article 10, each Guarantor hereby unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that:
(1)
the
principal of, premium and Additional Interest, if any, and interest on, the
Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal
of
and interest on the Notes, if any, if lawful, and all other obligations of
the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and
(2)
in
case of any extension of time of payment or renewal of any Notes or any of
such
other obligations, that same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, each Guarantor will pay the same immediately. Each
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
(b) Each
Guarantor hereby agrees that its obligations hereunder are unconditional,
irrespective of the validity, regularity or enforceability of the Notes or
this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof,
the
recovery of any judgment against the Company, any action to enforce the same
or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event
of
insolvency or bankruptcy of the Company, any right to require a proceeding
first
against the Company, protest, notice and all demands whatsoever and covenant
that this Note Guarantee will not be discharged except by complete performance
of the obligations contained in the Notes and this Indenture.
(c) If
any
Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor or any custodian, trustee, liquidator or other similar
official acting in relation to either the Company or any Guarantor, any amount
paid by either to the Trustee or such Holder, this Note Guarantee, to the extent
theretofore discharged, will be reinstated in full force and
effect.
(d) Each
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Guarantor further
agrees that, as between any Guarantors, on the one hand, and the Holders and
the
Trustee, on the other hand, (1) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes
of
this Note Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (2) in the event of any declaration of acceleration of such obligations
as
provided in Article 6 hereof, such obligations (whether or not due and payable)
will forthwith become due and payable by each Guarantor for the purpose of
this
Note Guarantee. Each Guarantor will have the right to seek
contribution
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from
any
non-paying Guarantor so long as the exercise of such right does not impair
the
rights of the Holders under the Note Guarantee.
Section
10.02. Limitation
on Guarantor Liability.
Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that
it
is the intention of all such parties that the Note Guarantee not constitute
a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Note Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and each Guarantor
hereby irrevocably agree that the obligations of such Guarantor will be limited
to the maximum amount that will, after giving effect to such maximum amount
and
all other contingent and fixed liabilities of such Guarantor that are relevant
under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article 10, result in the obligations of such Guarantor under its Note Guarantee
not constituting a fraudulent transfer or conveyance.
Section
10.03. Execution
and Delivery of Note Guarantee.
To
evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor
hereby agrees that a notation of such Note Guarantee substantially in the form
attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor
on
each Note authenticated and delivered by the Trustee and that this Indenture
will be executed on behalf of such Guarantor by one of its
Officers.
Each
Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01
hereof will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.
If
an
Officer whose signature is on this Indenture or on the Note Guarantee no longer
holds that office at the time the Trustee authenticates the Note on which a
Note
Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The
delivery of any Note by the Trustee, after the authentication thereof hereunder,
will constitute due delivery of the Note Guarantee set forth in this Indenture
on behalf of the Guarantors.
Section
10.04. Guarantors
May Consolidate, etc., on Certain Terms.
(e) Except
as
otherwise provided in Section 10.05 hereof and subject to 10.04(b) hereof,
no
Guarantor may sell or otherwise dispose of all or substantially all of its
assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person, other than the Company or
another Guarantor, unless:
(1)
immediately
after giving effect to such transaction, no Default or Event of Default exists;
and
(2)
subject
to Section 10.05 hereof, the Person acquiring the property in any such sale
or
disposition or the Person formed by or surviving any such consolidation or
merger unconditionally assumes all the obligations of that Guarantor under
this
Indenture, its Note Guarantee and the Registration Rights Agreement on the
terms
set forth herein or therein, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee.
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In
case
of any such consolidation, merger, sale or conveyance and upon the assumption
by
the successor Person, by supplemental indenture, executed and delivered to
the
Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed
upon the Notes and the due and punctual performance of all of the covenants
and
conditions of this Indenture to be performed by the Guarantor, such successor
Person will succeed to and be substituted for the Guarantor with the same effect
as if it had been named herein as a Guarantor. Such successor Person thereupon
may cause to be signed any or all of the Note Guarantees to be endorsed upon
all
of the Notes issuable hereunder which theretofore shall not have been signed
by
the Company and delivered to the Trustee. All the Note Guarantees so issued
will
in all respects have the same legal rank and benefit under this Indenture as
the
Note Guarantees theretofore and thereafter issued in accordance with the terms
of this Indenture as though all of such Note Guarantees had been issued at
the
date of the execution hereof.
Except
as
set forth in Articles 4 and 5 hereof, and notwithstanding clause 2 above,
nothing contained in this Indenture or in any of the Notes will prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or will prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
(f) Notwithstanding
the foregoing, any merger or consolidation of AREH (or an Affiliate referred
to
in clause (1) of the second paragraph of Section 5.01(b) or any Person that
is
the successor of AREH or any such successor ad
infinitum)
or any
sale of all or substantially all of AREH’s assets (or of an Affiliate referred
to in clause (1) of the second paragraph of Section 5.01(b) or any Person that
is the successor of AREH or any such successor ad
infinitum)
shall
be governed by Section 5.01(b) hereof and Section 10.04(a) shall not apply
to
any such transaction.
Section
10.05. Releases.
(a) In
the
event of any sale or other disposition of all or substantially all of the assets
of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the Capital Stock of any Guarantor, in each case
to
a Person that is not (either before or after giving effect to such transactions)
the Company or another Guarantor, then such Guarantor (in the event of a sale
or
other disposition, by way of merger, consolidation or otherwise, of all of
the
Capital Stock of such Guarantor) or the entity acquiring the property (in the
event of a sale or other disposition of all or substantially all of the assets
of such Guarantor) will be released and relieved of any obligations under its
Note Guarantee. Upon delivery by the Company to the Trustee of an Officers’
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture the Trustee will execute any documents reasonably required in order
to
evidence the release of any Guarantor from its obligations under its Note
Guarantee.
(b) Upon
satisfaction and discharge of this Indenture in accordance with Article 11
hereof, each Guarantor will be released and relieved of any obligations under
its Note Guarantee.
Any
Guarantor not released from its obligations under its Note Guarantee as provided
in this Section 10.05 will remain liable for the full amount of principal of
and
interest and premium and Additional Interest, if any, on the Notes and for
the
other obligations of any Guarantor under this Indenture as provided in this
Article 10.
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ARTICLE
11
SATISFACTION
AND DISCHARGE
Section
11.01 Satisfaction
and Discharge.
This
Indenture will be discharged and will cease to be of further effect as to all
Notes and Note Guarantees issued hereunder, when:
(1)
either:
(a) all
Notes
that have been authenticated, except lost, stolen or destroyed Notes that have
been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to AREP, have been delivered to the
Trustee for cancellation; or
(b) all
Notes
that have not been delivered to the Trustee for cancellation (1) have become
due
and payable by reason of the mailing of a notice of redemption or otherwise,
(2)
will become due and payable within one year or (3) are to be called for
redemption within 12 months under arrangements reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name,
and
at the reasonable expense of the Company, and the Company or any Guarantor
have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S. dollars
and
non-callable Government Securities, in amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the entire
Indebtedness on the Notes not delivered to the Trustee for cancellation for
principal and premium, if any, and accrued but unpaid interest to the date
of
maturity or redemption;
(2)
no
Default or Event of Default has occurred and is continuing on the date of the
deposit or will occur as a result of the deposit and the deposit will not result
in a breach or violation of, or constitute a default under, any other material
instrument to which the Company is a party or by which the Company is
bound;
(3)
the
Company has paid or caused to be paid all sums payable by it under this
Indenture; and
(4)
the
Company or any Guarantor have delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In
addition, the Company must deliver an Officers’ Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction
and
discharge have been satisfied.
Notwithstanding
the satisfaction and discharge of this Indenture, if money has been deposited
with the Trustee pursuant to subclause (b) of clause (1) of this Section 11.01,
the provisions of Sections 11.02 and 8.06 hereof will survive. In addition,
nothing in this Section 11.01 will be deemed to discharge those provisions
of
Section 7.07 hereof, that, by their terms, survive the satisfaction and
discharge of this Indenture.
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Section
11.02 Application
of Trust Money.
Subject
to the provisions of Section 8.06 hereof, all money deposited with the Trustee
pursuant to Section 11.01 hereof shall be held in trust and applied by it,
in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium and Additional Interest, if any) and interest
for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by
law.
If
the
Trustee or Paying Agent is unable to apply any money or Government Securities
in
accordance with Section 11.01 hereof by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company’s
and any Guarantor’s obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
11.01 hereof; provided
that if
the Company has made any payment of principal of, premium or Additional
Interest, if any, or interest on, any Notes because of the reinstatement of
its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities
held
by the Trustee or Paying Agent.
ARTICLE
12
CONVERSION
Section
12.01 Conversion
Privilege.
(a) Conversion.
Subject
to the further provisions of this Article 12, at any time or times after the
Issuance Date and prior to the close of business on the Business Day prior
to
the Maturity Date, a Holder may convert all or any portion of the principal
amount of such Holder’s Notes (in principal amounts of $1,000 or any integral
multiple of $1,000 in excess thereof) into Depositary Units at the Conversion
Rate then in effect.
(b) Conversion
Period.
Notwithstanding the foregoing, if such Note is presented for repurchase pursuant
to Article 13, such conversion right shall terminate at the close of business
on
the last day of the Fundamental Change Repurchase Period for such Note (unless
the Company shall default on payment when due, in which case the conversion
right shall extend to the close of business on the date such default is cured
and such Note is repurchased).
(c) Fundamental
Change Conversion.
The
conversion by the Holder following its receipt of a Fundamental Change Company
Notice during the Fundamental Change Repurchase Period shall be a “Fundamental
Change Conversion”.
In
connection with a Fundamental Change Conversion, the Holder shall be entitled
to
receive a Make-Whole Premium in accordance with Article 15.
(d) Rights
of Holders.
Unless
otherwise provided herein, a Holder of Notes is not entitled to any rights
of a
holder of Depositary Units until such Holder has converted its Notes to
Depositary Units, and only to the extent such Notes are deemed to have been
converted into Depositary Units pursuant to this Article 12.
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Section
12.02 Conversion
Procedure.
(a) To
convert a Note (or any portion thereof) into Depositary Units (other than in
respect of a Forced Conversion, the procedures for which are set forth below)
on
any date (the “Conversion
Date”),
a
Holder must (i) complete and manually sign a Notice of Conversion in the form
attached hereto as Exhibit F (or a facsimile of the conversion notice)
specifying the principal amount of such Note such Holder seeks to convert and
deliver such notice (the “Notice
of Conversion”)
to a
Conversion Agent, (ii) surrender the Note to a Conversion Agent, (iii) furnish
appropriate endorsements and transfer documents if required by a Registrar
or a
Conversion Agent and (iv) pay any transfer or similar tax, if required. Anything
herein to the contrary notwithstanding, in the case of Global Notes, a Notice
of
Conversion shall be delivered and such Notes shall be surrendered for conversion
in accordance with the rules and procedures of the Depositary as in effect
from
time to time.
(b) If
the
last day on which Note may be converted is not a Business Day in a place where
a
Conversion Agent is located, the Notes may be surrendered to that Conversion
Agent on the next succeeding Business Day.
(c) Holders
that have already delivered a Fundamental Change Repurchase Notice in respect
of
a Note may not surrender such Note for conversion until the Fundamental Change
Repurchase Notice has been withdrawn in accordance with the procedures set
forth
in Article
13.
(d) All
Notes
or portions thereof surrendered for conversion during the period from the close
of business on a Record Date to the opening of business on the immediately
following Interest Payment Date shall be accompanied by payment, in funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such Interest Payment Date on the principal amount of the Notes being
converted; provided, however, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest on the
Notes. Notwithstanding the foregoing, upon any conversion pursuant to this
Article 12, the Company shall pay to the applicable Holder the amount of accrued
and unpaid interest and Additional Interest, if any, on the principal amount
of
the Notes so converted in accordance with Section 12.06.
Section
12.03 Company’s
Right to Require Conversion; Notices to Trustee.
(a) The
Company may, at its option, automatically convert all or a portion of the Notes
(a “Forced
Conversion”)
at any
time on or after April 5, 2009 and prior to the Maturity Date if: (i) the VWAP
per Depositary Unit has exceeded One Hundred Fifty percent (150%) of the
Conversion Price then in effect for at least twenty (20) Trading Days within
a
period of thirty (30) consecutive Trading Days ending within five (5) Trading
Days of the Forced Conversion Notice Date; and (ii) the Equity Conditions shall
have been satisfied as of the date of the Forced Conversion Notice. The Holders
shall be entitled to receive a Make-Whole Premium in accordance with Article
15
for any Forced Conversion which occurs following the public announcement of
a
Fundamental Change during the applicable Fundamental Change Repurchase Period.
Notwithstanding anything herein to the contrary, if at any time during the
Forced Conversion Period, the Equity Conditions are no longer satisfied (a
“Forced
Conversion Equity Conditions Failure”),
the
Company shall provide a notice to the Trustee and each Holder of such failure
and, unless the Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes waive such failure, the Company shall
be
required to withdraw the Forced Conversion Notice.
(b) If
the
Company elects to convert all or a portion of the principal amount of the Notes
pursuant to this Section 12.03, the Company, or at its request (which must
be
received by the Trustee at
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least
five (5) Business Days prior to the date the Trustee is requested to give notice
as described below unless a shorter period is agreed to by the Trustee), the
Trustee in the name of and at the expense of the Company, shall send or cause
to
be sent a notice (the “Forced
Conversion Notice”)
of the
Forced Conversion not more than thirty (30) days and not less than ten (10)
days
before the Forced Conversion Date (the “Forced
Conversion Notice Date”)
to the
Holders at their last addresses as they shall appear upon the register of the
Notes. Except as required by Section 12.03(a), such notice shall be irrevocable.
Any notice that is sent in the manner herein provided shall be deemed given
upon
such Holder’s actual receipt of the Forced Conversion Notice.
(c) The
Forced Conversion Notice shall identify the Notes to be converted and shall
state:
(1)
the
date
on which a Forced Conversion will become effective (the “Forced
Conversion Date”);
(2)
the
CUSIP
number of the Notes;
(3)
the
place
or places where the Notes (if such Notes are held other than in global form)
are
to be surrendered for conversion;
(4)
the
Conversion Price then in effect;
(5)
the
name
and address of the Conversion Agent;
(6)
if
fewer
than all the outstanding Notes are to be converted, the certificate number
(if
such Notes are held other than in global form) and principal amounts of the
particular Notes to be converted;
(7)
that,
unless the Company fails to issue the Depositary Units in respect of the Notes
subject to the Forced Conversion and interest and Additional Interest, if
applicable, interest will cease to accrue on and after the Forced Conversion
Date in respect of the Notes to be redeemed; and
(8)
whether
a
Make-Whole Premium is required to be paid by the Company upon any Forced
Conversion occurring after the public announcement of a Fundamental
Change.
In
case
the Notes are to be converted in part only, the Forced Conversion Notice shall
state the portion of the principal amount thereof to be converted and shall
state that on and after the Forced Conversion Date, upon surrender of such
Notes
(if such Notes are held other than in global form), a new Note or Notes in
a
principal amount equal to the unconverted portion thereof will be
issued.
Concurrently
with the mailing of any such Forced Conversion Notice (or any withdrawal of
such
Forced Conversion Notice or notice of a Forced Conversion Equity Conditions
Failure), the Company shall file a Form 8-K with the SEC, the form and content
of which shall be determined by the Company in good faith, but in its sole
discretion, and in accordance with applicable securities laws.
(d) During
the period beginning on the Forced Conversion Date and ending on the date thirty
(30) days thereafter, the Company shall not publicly offer to sell any Capital
Stock (or securities convertible into, or exchangeable for, Capital Stock)
of
the Company (other than Depositary Units issued pursuant to employee benefit
plans, qualified stock option plans or other employee compensation plans
existing prior to such Forced Conversion Date or pursuant to then outstanding
options, warrants or rights, including the Preferred Units), or publicly offer
to sell or grant options, rights or warrants with respect to
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any
Capital Stock or securities convertible into or exercisable or exchangeable
for
Capital Stock (other than the grant of options pursuant to option plans existing
prior to such Forced Conversion Date). The foregoing sentence shall not apply
to
(i) the issuance of Depositary Units upon conversion of any of the Notes, (ii)
in connection with any employee benefit plan which has been approved by the
Board of Directors of the general partner of the Company, pursuant to which
the
Company’s securities may be issued to any employee, officer or director for
services provided to the Company, (iii) the issuance by the Company of any
Depositary Units upon the exercise of an option or warrant or the conversion
of
a security outstanding on the date hereof (provided that the terms relating
to
pricing of the number of Depositary Units issuable upon exercise of such options
or warrants are not amended or modified in any manner after the date hereof)
or
an option or warrant issued or granted in compliance with this paragraph,
(iv) the sale of Depositary Units in a bona
fide
firm
commitment underwritten offering with a nationally recognized underwriter if
the
price per share in such offering exceeds 115% of the Conversion Price (other
than an “at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act
and “equity lines”); (v) the entry into an agreement to issue, and the
issuance of, Depositary Units, other equity securities of the Company or equity
equivalents in exchange for assets or equity securities of another entity to
be
acquired by the Company, the primary purpose of which is not to raise equity
capital, and (vi) the issuance of Preferred Units distributed (A) as dividends
on Preferred Units which are currently outstanding or (B) to satisfy any
redemption obligation in respect of Preferred Units which are currently
outstanding or which are issued as dividends in respect thereof.
Section
12.04 Selection
of Notes to be Converted.
If
less
than all the Notes are to be converted pursuant to a Forced Conversion, the
Trustee (or the Depositary, if the Notes are held in global form) shall select
the Notes to be converted pro rata or
by lot
(so long as such method is not prohibited by the rules of any stock exchange
on
which the Notes are then listed). The Trustee or the Depositary, as applicable,
shall make the selection within seven (7) days following its receipt of the
notice from the Company delivered pursuant to Section 12.03(b) from outstanding
Notes and shall notify the Company of its selection.
Notes
and
portions of them the Trustee selects shall be in principal amounts of $1,000
or
integral multiples of $1,000.
If
any
Note selected for Forced Conversion is converted at the election of the Holder
in part before termination of the conversion right in respect of the portion
of
the Note so selected, the converted portion of such Note shall be deemed (so
far
as may be) to be the portion selected for Forced Conversion. Notes which have
been converted during a selection of Notes subject to Forced Conversion may
be
treated by the Trustee or Depositary, as applicable, as outstanding for the
purpose of such selection.
Section
12.05 Delivery
by Holders of Notes Subject to Forced Conversion.
All
Notes
subject to Forced Conversion (if such Notes are held other than in global form)
shall be delivered to the Company
to deliver to the Trustee to be canceled. Failure to deliver such Notes shall
not affect their cancellation. In case any Note of a denomination greater than
One Thousand United States Dollars ($1,000) shall be surrendered for partial
conversion, and subject to Section 2.02, the Company shall execute and, upon
receipt of an Authentication Order in accordance with Section 2.02 hereof,
the
Trustee shall authenticate and deliver to the Holder of Notes so surrendered,
without charge to such Holder, a new Note or Notes in authorized denominations
in an aggregate principal amount equal to the unconverted portion of the
surrendered Note.
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Section
12.06 Deposit
of Interest and Additional Interest.
On
or
prior to 10:00 a.m., Eastern Time on the Forced Conversion Date or within three
(3) Trading Days following any other Conversion Date, as applicable, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 2.04) interest accrued on the Notes being converted on the applicable
Conversion Date or Forced Conversion Date, as applicable, and Additional
Interest, if any, thereon to such date. The Trustee or the Paying Agent (or,
if
the Company is acting as its own Paying Agent, the Company), shall pay such
interest and Additional Interest, if any, to the converting Holder no later
than
the third Business Day after (a) the Conversion Date or (b) receipt of the
Notes
delivered as required by Section 12.05, in the case of a Forced
Conversion.
Section
12.07 Delivery
of Depositary Units.
The
Company will, as soon as practicable after the Conversion Date, but
in no
event later than three (3) Trading Days following the delivery of a Notice
of
Conversion or on the Forced Conversion Date, as applicable (each, a
“Depositary
Unit Delivery Date”)
issue,
or cause to be issued, and deliver to the Conversion Agent or to such Holder,
or
such Holder’s nominee or nominees, certificates for the number of full
Depositary Units to which such Holder shall be entitled. The Person or Persons
entitled to receive such Depositary Units upon such conversion shall be treated
for all purposes as the record holder or holders of such Depositary Units,
as of
the close of business on Conversion Date or Forced Conversion Date, as
applicable; provided,
however,
that no
surrender of a Note on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the Person or Persons entitled
to receive the Depositary Units upon such conversion as the record holder or
holders of such Depositary Units on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such
Depositary Units as the record holder or holders thereof for all purposes at
the
close of business on the next succeeding day on which such stock transfer books
are open; provided further that such conversion shall be at the Conversion
Price
in effect on the Conversion Date as if the stock transfer books of the Company
had not been closed. Upon conversion in full of a Note, such Person shall no
longer be a Holder of such Note. Except as otherwise provided in Section 12.11,
no payment or adjustment will be made for dividends or distributions on
Depositary Units issued upon conversion of a Note.
Upon
surrender of a Note that is converted in part, the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder, as soon as
practicable, a new Note equal in principal amount to the unconverted portion
of
the Note surrendered.
Section
12.08 No
Fractional Units.
The
Company shall not issue any fraction of a Depositary Unit upon any conversion.
If the issuance would result in the issuance of a fraction of a Depositary
Unit,
the Company shall round such fraction of a Depositary Unit to the nearest whole
unit.
Section
12.09 Taxes
on Conversion.
If
a
Holder converts a Note, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on, or in respect of, the issuance or delivery to
such
Holder of Depositary Units upon such conversion. However, the Holder shall
pay
any such tax which is due because the Holder requests the Depositary Units
to be
issued in a name other than the Holder’s name. The Conversion Agent may refuse
to deliver the certificate representing the Depositary Units being issued in
a
name other than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be
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due
because the Depositary Units are to be issued in a name other than the Holder’s
name. Nothing herein shall preclude any tax withholding required by law or
regulation.
Section
12.10 Company
to Provide Depositary Units.
(a) The
Company shall, prior to issuance of any Notes hereunder, and from time to time
as may be necessary, reserve, out of its authorized but unissued Depositary
Units, a sufficient number of Depositary Units to permit the conversion of
all
outstanding Notes into Depositary Units (including after taking into account
any
adjustments to the Conversion Price pursuant to Section 12.11).
(b) All
Depositary Units delivered upon conversion of the Notes shall be newly issued
units, shall be duly authorized and validly issued, and shall be free from
preemptive rights and free of any lien or adverse claim, other than any lien
or
claim created by the Holder thereof.
(c) The
Company will endeavor promptly to comply with all federal and state securities
laws regulating the offer and delivery of Depositary Units upon conversion
of
Notes, if any, and will list or cause to have quoted such Depositary Units
on
any Eligible Market. Any Depositary Units issued upon conversion of a Note
hereunder which at the time of conversion was a Restricted Definitive Note
or a
Restricted Global Note will remain a Restricted Definitive Note or a Restricted
Global Note, as applicable.
Section
12.11 Adjustment
of Conversion Price.
The
Conversion Price shall be adjusted from time to time by the Company as
follows:
(a) Upon
the
completion of the first Offering that is executed at a price per Depositary
Unit
that is less than $_________1
(as
adjusted for splits, reverse splits and/or stock dividends effected prior to
the
date of such Offering in respect of the Depositary Units - any such adjustment
to be determined by the Company in good faith, absent manifest error), the
Conversion Price will be adjusted so that it equals 115% of the price per
Depositary Unit at which Depositary Units were offered (as reflected on the
applicable registration statement) by the Company in the Offering. If (and
only
if) no Offering occurs within 18 months after the date Notes are first issued
hereunder, the Conversion Price will adjusted so that it equals 115% of the
arithmetic average of the VWAP per Depositary Unit of the Depositary Units
on
the thirty (30) Trading Days ending on October 5, 2008; provided
that
after giving effect to such adjustment, the Conversion Price as adjusted would
be less than $132.595 (as adjusted for splits, reverse splits and/or stock
dividends effected prior to the date of such Offering in respect of the
Depositary Units - any such adjustment to be determined by the Company in good
faith, absent manifest error). Notwithstanding the preceding contingent
adjustments, in no event will the Conversion Price be adjusted pursuant to
this
Section 12.11(a) to a Conversion Price that is less than $105.00 (as adjusted
for splits, reverse splits, and/or stock dividends effected prior to the date
of
such Offering in respect of the Depositary Units - any such adjustment to be
determined by the Company in good faith, absent manifest error) per Depositary
Unit.
(b) In
case
the Company shall (i) pay a dividend on its Depositary Units in Depositary
Units, (ii) make a distribution on its Depositary Units in Depositary Units,
(iii) subdivide its outstanding Depositary Units into a greater number of units,
or (iv) combine its outstanding Depositary Units into a smaller number of units,
the Conversion Price in effect immediately prior thereto shall be adjusted
so
that the
|
1
|
Insert
the arithmetic average of the VWAP for Depositary Units for the
ten (10)
Trading Days ending on April 4,
2007.
|
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Holder
of
any Note thereafter surrendered for conversion shall be entitled to receive
that
number of Depositary Units which it would have owned had such Note been
converted immediately prior to the happening of such event. An adjustment made
pursuant to this subsection (c) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of subdivision or
combination.
(c) In
case
the Company shall issue or declare rights, options or warrants (other than
pursuant to a Poison Pill) to all holders of its Depositary Units entitling
them
(for a period commencing no earlier than the record date described below and
expiring not more than 60 days after such record date) to subscribe for or
purchase Depositary Units (or securities convertible into or exercisable or
exchangeable for Depositary Units) at a price per unit (or having a conversion,
exercise or exchange price per unit) less than the Current Market Price per
Depositary Unit on the record date with respect to such issuance, (or if no
such
record date is fixed, the Business Day immediately prior to the date of
announcement of such issuance) (treating the conversion, exercise or exchange
price per unit of the securities convertible into or exercisable or exchangeable
for Depositary Units as equal to (x) the sum of (i) the price for a unit of
the
security convertible into or exercisable or exchangeable for Depositary Units
and (ii) any additional consideration initially payable upon the conversion
of
such security into or exercise or exchange of such security for Depositary
Units
divided by (y) the number of Depositary Units initially underlying such
security), the Conversion Price in effect shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
at the opening of business on the date after such record date (or if no such
record date is fixed, the applicable Business Day) by a fraction of
which:
(1)
the
numerator of which shall be the number of Depositary Units outstanding on the
close of business on the record date (or is no such record date is fixed, the
date of announcement of such issuance), plus the number of units which the
aggregate offering price of the total number of units so offered for
subscription or purchase (or the aggregate conversion, exercise or exchange
price of the securities so offered) would purchase at such Current Market Price
per Depositary Unit; and
(2)
the
denominator of which shall be the number of Depositary Units outstanding at
the
close of business on the record date (or is no such record date is fixed, the
date of announcement of such issuance), plus the total number of additional
Depositary Units so offered for subscription or purchase (or into which the
securities so offered are convertible, exercisable or exchangeable).
Such
adjustment shall be made successively whenever any such rights, options or
warrants are issued, and shall become effective on the day following the date
of
announcement of such issuance. To
the
extent that Depositary Units (or securities convertible into or exercisable
or
exchangeable for Depositary Units) are not delivered pursuant to such rights,
options or warrants, upon the expiration or termination of such rights, option
or warrants the Conversion Price shall be readjusted to the Conversion Price
which would then be in effect had the adjustments made upon the issuance of
such
rights, options or warrants been made on the basis of the delivery of only
the
number of Depositary Units (or securities convertible into or exercisable or
exchangeable for Depositary Units) actually delivered. In the event that such
rights, options or warrants are not so issued, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if the
announcement of such issuance had not been made.
(d) In
case
the Company shall declare a distribution in respect of its Depositary Units
of
any Capital Stock of the Company (other than Depositary Units), evidences of
indebtedness or other non-cash assets (including securities of any person other
than AREP but excluding (1) dividends or distributions paid exclusively in
cash,
(2) dividends or distributions referred to in Section 12.11(b) or (3)
distributions made in connection with the liquidation, dissolution or winding
up
of the Company), or shall declare a
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distribution
to all holders of its Depositary Units of rights, options or warrants to
subscribe for or purchase any of its securities (excluding those rights, options
and warrants referred to in Section 12.11(c) and also excluding the distribution
of rights to all holders of Depositary Units pursuant to a Poison Pill or the
detachment of such rights to the extent set forth in the second following
paragraph), then in each such case the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the current
Conversion Price by a fraction of which:
(1)
the
numerator of which shall be the Current Market Price per Depositary Unit on
such
record date, less the fair market value on such record date (as determined
by
the Board of Directors, whose determination shall be conclusive evidence of
such
fair market value and which shall be evidenced by an Officers’ Certificate
delivered to Trustee) of the portion of the distributed assets so distributed
applicable to one Depositary Unit (determined on the basis of the number of
Depositary Units outstanding on the record date); and
(2)
the
denominator of which shall be such Current Market Price per Depositary Unit
on
such record date mentioned below.
Such
adjustment shall be made successively whenever any such distribution is made
and
shall become effective immediately after the record date for the determination
of shareholders entitled to receive such distribution. Subject to the terms
of
the first paragraph of this Section 12.11(d):
(i) in
the
event that the Company has in effect a preferred shares/units rights plan
(“Poison
Pill”),
upon
conversion of the Notes into Depositary Units, to the extent that the Poison
Pill is still in effect upon such conversion, the Holders will receive, in
addition to the Depositary Units, the rights described therein (whether or
not
the rights have separated from the Depositary Units at the time of conversion),
subject to the limitations set forth in the Poison Pill. If the Poison Pill
provides that upon separation of rights under such plan from the Company’s
Depositary Units that the Holders would not be entitled to receive any such
rights in respect of the Depositary Units issuable upon conversion of the Notes,
the Conversion Price will be adjusted as provided in this Section 12.11(d)
(with
such separation deemed to be the distribution of such rights), subject to
readjustment in the event of the expiration, termination or redemption of the
rights. Any distribution of rights or warrants pursuant to a Poison Pill that
would allow a Holder to receive upon conversion, in addition to the Depositary
Units, the rights described therein (whether or not the rights have separated
from the Depositary Units at the time of conversion), shall not constitute
a
distribution of rights, options or warrants pursuant to this Article
12.
(ii) Rights,
options or warrants distributed by the Company to all holders of Depositary
Units entitling the holders thereof to subscribe for or purchase Capital Stock
(either initially or under certain circumstances), which rights, options or
warrants, until the occurrence of a specified event or events (“Trigger
Event”):
(A)
are deemed to be transferred with such Depositary Units; (B) are not
exercisable; and (C) are also issued in respect of future issuances of
Depositary Units, shall be deemed not to have been distributed for purposes
of
this Section 12.11 (and no adjustment to the Conversion Price under this Section
12.11 will be required) until the occurrence of the earliest Trigger Event,
whereupon such rights, options and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 12.11(d). If any such right or warrant,
including any such existing rights, options or warrants distributed prior to
the
date of this Indenture, are subject to events, upon the occurrence of which
such
rights, options or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence
of
any and each such event shall be deemed to be the date of distribution and
record date in respect of new rights, options or warrants with such rights
(and
a termination or expiration of the existing rights, options or warrants without
exercise by any of the holders thereof). In addition, in the event of any
distribution (or deemed distribution) of rights, options or warrants, or
any
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Trigger
Event or other event (of the type described in the preceding sentence) in
respect thereof that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 12.11
was made, in the case of any such rights, options or warrants which shall all
have been redeemed or repurchased without exercise by any holders thereof,
the
Conversion Price shall be readjusted upon such final redemption or repurchase
to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per unit redemption or repurchase
price received by a holder or holders of Depositary Units in respect of such
rights, options or warrants (assuming such holder had retained such rights,
options or warrants), made to all holders of Depositary Units as of the date
of
such redemption or repurchase.
(e) In
case
the Company or any of its Subsidiaries shall purchase any Depositary Units
(as
defined below) by means of a tender offer, then, effective immediately prior
to
the opening of business on the day after the last date (the “Expiration
Date”)
tenders could have been made pursuant to such tender offer (as it may be
amended) (the last time at which such tenders could have been made on the
Expiration Date is hereinafter sometimes called the “Expiration
Time”),
the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to
the close of business on the Expiration Date by a fraction of
which:
(1)
the
numerator shall be the product of the number of Depositary Units outstanding
(including Purchased Depositary Units (as defined below) but excluding any
units
held in the treasury of the Company) immediately prior to the Expiration Time
multiplied by the Current Market Price per Depositary Unit (as determined in
accordance with Section 12.11(f)); and
(2)
the
denominator shall be the sum of (x) the aggregate consideration (determined
as
set forth below) payable to stockholders of the Company based on the acceptance
(up to any maximum specified in the terms of the tender offer) of all units
validly tendered and not withdrawn as of the Expiration Time (the units deemed
so accepted, up to any such maximum, being referred to as the “Purchased
Depositary Units”)
and
(y) the product of the number of Depositary Units outstanding (less any
Purchased Depositary Units and excluding any units held in the treasury of
the
Company) immediately prior to the Expiration Time and the Current Market Price
per Depositary Unit (as determined in accordance with Section 12.11(f)).
For
purposes of this Section 12.11(e), the aggregate consideration in any such
tender offer shall equal the sum of the aggregate amount of cash consideration
and the aggregate fair market value (as determined by the Board of Directors,
whose determination shall be conclusive evidence thereof and which shall be
evidenced by an Officers’ Certificate delivered to the Trustee) of any other
consideration payable in such tender offer. In the event that the Company is
obligated to purchase units pursuant to any such tender offer, but the Company
is permanently prevented by applicable law from effecting any or all such
purchases or any or all such purchases are rescinded, the Conversion Price
shall
again be adjusted to be the Conversion Price which would have been in effect
based upon the number of units actually purchased. If the application of this
Section 12.11(e) to any tender offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender offer under this
Section 12.11(e). For purposes of this Section 12.11(e), the term “tender
offer”
shall
mean and include both tender offers and exchange offers, all references to
“purchases”
of
units in tender offers (and all similar references) shall mean and include
both
the purchase of units in tender offers and the acquisition of units pursuant
to
exchange offers, and all references to “tendered
units”
(and
all similar references) shall mean and include units tendered in both tender
offers and exchange offers.
(f) “Current
Market Price per Depositary Unit”
on
any
date means (i) for the purpose of any computation under clauses (c), or (d)
of
this Section 12.11, the VWAP per Depositary Unit for the ten
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(10)
consecutive Trading Days commencing 11 Trading Days before the record date
in
respect of distributions, issuances or other events requiring such computation
under Section 12.11 and (ii) for purposes of any computation under Section
12.11(e), the arithmetic average of the VWAP per Depositary Unit for the ten
(10) consecutive Trading Days commencing on the Trading Day next succeeding
the
Expiration Date.
(g) In
any
case in which this Section 12.11 shall require that an adjustment be made to
the
Conversion Price, in lieu of the foregoing adjustment, the Company may, at
its
option, distribute, concurrently with the distribution to the holders of the
outstanding Depositary Units, Depositary Units, rights, options, warrants,
any
Capital Stock (other than Depositary Units), evidences of indebtedness or other
non-cash assets that such Holder of a Note would have been entitled to receive,
as applicable, had such Note been converted immediately prior to the happening
of the record date relating to the event that would have caused such adjustment
(without regard to the Conversion Limitation).
(h) In
any
case in which this Section 12.11 shall require that an adjustment be made
following a record date, an announcement date or a Determination Date or
Expiration Date, as the case may be, established for purposes of this Section
12.11, the Company may elect to defer (but only until five (5) Business Days
following the filing by the Company with the Trustee of the certificate
described in Section 12.13) issuing to the Holder of any Note converted after
such record date or announcement date or Expiration Date the Depositary Units
and other Capital Stock of the Company issuable upon such conversion over and
above the Depositary Units and other Capital Stock of the Company issuable
upon
such conversion only on the basis of the Conversion Rate prior to adjustment;
and, in lieu of the units the issuance of which is so deferred, the Company
shall issue or cause its transfer agents to issue due bills or other appropriate
evidence prepared by the Company of the right to receive such
units.
Section
12.12 No
Adjustment.
(a) No
adjustment need be made for issuances of Excluded Securities.
(b) Without
limiting the provisions of Section 12.11, no adjustment shall be made
thereunder, nor shall an adjustment be made to the ability of the Holder to
convert, for any distribution described therein if the Holder participates
or
will participate in the distribution without conversion of such Holder’s Notes
as if such Holder held a number of Depositary Units equal to the applicable
Conversion Rate, multiplied by the principal amount (expressed in thousands)
of
Notes held by such Holder, without having to convert its Notes. Further, if
the
application of the foregoing formulas in Section 12.11 would result in an
increase in the Conversion Price, no adjustment to the Conversion Price will
be
made (except on account of unit combinations).
(c) No
adjustment in the Conversion Price shall be required unless the adjustment
would
require a decrease of at least 1% in the Conversion Price as last adjusted;
provided,
however,
that
any adjustments which by reason of this Section 12.12 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment and, in any event, shall be carried forward and taken into account
regardless of whether the aggregate adjustment is less than 1% upon the
announcement by the Company of a Fundamental Change, upon any Forced Conversion
Date, upon any redemption of the Notes pursuant to Article 14 and at the
Maturity Date.
Section
12.13 Notice
of Conversion Price Adjustment.
(a) Whenever
the Conversion Price is adjusted, the Company shall promptly mail to the Holders
a notice of the adjustment and file with the Trustee an Officers’ Certificate
briefly stating the facts
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requiring
the adjustment and the manner of computing it. Unless and until the Trustee
shall receive an Officers’ Certificate setting forth an adjustment of the
Conversion Price, the Trustee may assume without inquiry that the Conversion
Price has not been adjusted and that the last Conversion Price of which it
has
knowledge remains in effect.
(b) Whenever,
rather than adjusting the Conversion Price, the Company elects to distribute,
concurrently with the distribution to the holders of the outstanding Depositary
Units, Depositary Units, rights, options, warrants, Capital Stock (other than
Depositary Units), evidences of indebtedness or other non-cash assets that
such
Holder of a Note would have been entitled to receive, as applicable, had such
Note been converted immediately prior to the happening of the record date
relating to the event that would have caused such adjustment (without regard
to
the Conversion Limitation) as provided in Section 12.11(g), the Company shall,
contemporaneously with announcing such distribution, or giving notice thereof
to
the holders of Depositary Units, provide notice to the Holders, with a copy
to
the Trustee, that they will participate in such distribution on an as converted
basis.
Section
12.14 Notice
of Certain Transactions.
In
the
event that:
(a) the
Company shall authorize the granting to the holders of its Depositary Units
of
rights or warrants to subscribe for or purchase any Capital Stock of any class
(or securities convertible into or exercisable or exchangeable for Capital
Stock
of any class) or of any other rights;
(b) there
shall occur any reclassification of the Depositary Units (other than a
subdivision or combination of its outstanding Depositary Units);
(c) the
Company consolidates or merges with, or transfers all or substantially all
of
its property and assets (or the Capital Stock, property or assets of any of
its
Significant Subsidiaries) to, another entity and holders of Depositary Units
of
the Company must approve the transaction; or
(d) there
is
a dissolution or liquidation of the Company,
and
in
any such case the Company (i) is obligated to deliver notice thereof to NYSE
or
any Eligible Market on which the Depositary Units are then listed or (ii)
delivers a notice thereof to any holders of its 7 1/8% Senior Notes or 8 1/8%
Senior Notes, the Company shall, on the same date as it (x) is required to
deliver any similar notice to NYSE or such Eligible Market or (y) delivers
such
notice to such holders, file with the Trustee a notice and file a Form 8-K
with
the SEC stating the proposed record or effective date, as the case may be,
and
the action to be effected on such effective date, or as to which such record
date is being set. Failure to file such notice or any defect therein shall
not
affect the validity of any transaction referred to in clause (a), (b), (c)
or
(d) of this Section 12.14.
Section
12.15 Effect
of Reclassification, Consolidation, Merger or Sale on Conversion
Privilege.
If
any of
the following shall occur, namely:
(a)
any
reclassification or change of Depositary Units issuable upon conversion of
the
Notes (other than any change for which an adjustment is provided in Section
12.11);
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(b)
any
consolidation or merger or combination to which AREP is a party other than
a
merger in which AREP is the continuing entity and which does not result in
any
reclassification of, or change (other than as a result of a subdivision or
combination) in, outstanding Depositary Units; or
(c)
any
sale or conveyance as an entirety or substantially as an entirety of the
property and assets of AREP, directly or indirectly, to any Person,
and
as a
result thereof holders of Depositary Units are entitled to receive any kind
or
amount of shares of stock, units and other securities and/or property (including
cash) in respect of their Depositary Units, then the Company, or such successor,
purchasing or transferee corporation, as the case may be, shall, as a condition
precedent to such reclassification, change, combination, consolidation, merger,
sale or conveyance, execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Note then outstanding shall have the right
to
convert such Note into the kind and amount of shares of stock, units and other
securities and property (including cash) receivable upon such reclassification,
change, combination, consolidation, merger, sale or conveyance by a holder
of
the number of Depositary Units deliverable upon conversion of such Note
immediately prior to such reclassification, change, combination, consolidation,
merger, sale or conveyance. Such supplemental indenture shall provide for
adjustments of the Conversion Price which shall be as nearly equivalent as
may
be practicable to the adjustments of the Conversion Price provided for in this
Article 12. If, in the case of any such consolidation, merger, combination,
sale
or conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of Depositary Units include shares of stock
or
other securities and property of a Person other than the successor, purchasing
or transferee corporation, as the case may be, in such consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall contain
such additional provisions to protect the interests of the Holders as the Board
of Directors shall reasonably consider necessary by reason of the foregoing.
The
provisions of this Section 12.15 shall similarly apply to successive
reclassifications, changes, combinations, consolidations, mergers, sales or
conveyances.
In
the
event that a supplemental indenture pursuant to this Section 12.15 is to be
executed, without prejudice to any other rights of the Trustee hereunder, the
Company shall promptly file with the Trustee (x) an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock
or
other securities or property (including cash) receivable by Holders upon the
conversion of their Notes after any such reclassification, change, combination,
consolidation, merger, sale or conveyance, any adjustment to be made in respect
thereof and that all conditions precedent have been complied with and (y) an
Opinion of Counsel that all conditions precedent have been complied with, and
shall promptly mail notice thereof to all Holders.
Section
12.16 Trustee’s
Disclaimer.
The
Trustee shall have no duty to determine when an adjustment under this Article
12
should be made, how it should be made or what such adjustment should be, but
may
accept as conclusive evidence of that fact or the correctness of any such
adjustment, and shall be protected in relying upon, an Officers’ Certificate
including the Officers’ Certificate in respect thereof which the Company is
obligated to file with the Trustee pursuant to Section 12.13. The Trustee makes
no representation as to the validity or value of any securities or assets issued
upon conversion of Notes and the Trustee shall not be responsible for the
Company’s failure to comply with any provisions of this Article 12.
The
Trustee shall not be under any responsibility to determine the correctness
of
any provisions contained in any supplemental indenture executed pursuant to
Section 12.15, but may accept as conclusive evidence of the correctness thereof,
and shall be fully protected in relying upon, the Officers’
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Certificate
in respect thereof which the Company is obligated to file with the Trustee
pursuant to Section 12.15.
Section
12.17 Company
Determination Final.
Any
determination that the Company or the Board of Directors must make pursuant
to
this Article 12 shall be conclusive if made in good faith and in accordance
with
the provisions of this Article 12, absent manifest error, and set forth in
a
resolution of the Board of Directors.
ARTICLE
13
REPURCHASE
UPON A FUNDAMENTAL CHANGE
Section
13.01 Repurchase
of Notes at Option of the Holder Upon Fundamental Change.
(a) General.
If
prior to the Maturity Date there shall have occurred a Fundamental Change,
each
Holder shall have the option to require all or a portion of its Notes to be
repurchased (the “Fundamental
Change Repurchase”)
in
cash by the Company at the Fundamental Change Repurchase Price on the
Fundamental Change Settlement Date in accordance with the following procedures.
The “Fundamental
Change Repurchase Price”
means
the principal amount of the Notes to be repurchased, together with accrued
and
unpaid interest and Additional Interest, if any, to, but excluding, the
Fundamental Change Settlement Date.
(b) Company
Notice of Fundamental Change.
Within
15 days after the Company knows or reasonably should know of the occurrence
of a
Fundamental Change, the Company shall deliver a written notice of Fundamental
Change (the “Fundamental
Change Company Notice”)
by
first-class mail or by overnight courier to the Trustee and to each Holder
(and
to beneficial owners as required by applicable law). The notice shall include
a
form of Fundamental Change Repurchase Notice (substantially in the Form of
Exhibit H hereto) to be completed by the Holder and shall state:
(1)
the
events causing a Fundamental Change and the date of such Fundamental
Change;
(2)
the
last
date of the Fundamental Change Repurchase Period by which a Holder must deliver
a Fundamental Change Repurchase Notice to elect the repurchase option pursuant
to this Section 13.01;
(3)
the
Fundamental Change Settlement Date;
(4)
the
Fundamental Change Repurchase Price;
(5)
the
Conversion Price applicable on the date of the Fundamental Change Company
Notice;
(6)
that
Notes as to which a Fundamental Change Repurchase Notice has been given may
be
converted pursuant to Article 12 hereof only if such Fundamental Change
Repurchase Notice has been withdrawn in accordance with the terms of this
Indenture;
(7)
that
Notes must be surrendered to the Paying Agent for cancellation to collect
payment;
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(8)
that
the
Fundamental Change Repurchase Price for any Note as to which a Fundamental
Change Repurchase Notice has been duly given and not withdrawn will be paid
promptly following the later of the Fundamental Change Settlement Date and
the
time of surrender of such Note as described in clause (7) above;
(9)
the
procedures the Holder must follow to exercise rights under this Section
13.01;
(10)
the
conversion rights of the Notes;
(11)
the
procedures for withdrawing a Fundamental Change Repurchase Notice;
(12)
that,
unless the Company defaults in making payment of such Fundamental Change
Repurchase Price, Notes covered by any Fundamental Change Repurchase Notice
will
cease to be outstanding and interest will cease to accrue on and after the
Fundamental Change Settlement Date;
(13)
the
CUSIP
number of the Notes; and
(14)
whether
a
Make-Whole Premium is required to be paid by the Company upon any conversion
in
connection such a Fundamental Change.
If
the
Company requests that the Trustee shall give (at the Company’s expense) such
Fundamental Change Company Notice in the Company’s name, the Company shall, in
all cases, prepare the text of such Fundamental Change Company Notice. In
connection with delivery of the Fundamental Change Company Notice to the
Holders, the Company shall file a Form 8-K with the SEC containing substantially
the same information that is required in the Fundamental Change Company Notice,
or publish such information on the Company’s website or through such other
public medium as the Company may use at such time.
(c) Fundamental
Change Repurchase Notice.
In
order to exercise its rights under this Section 13.01, a Holder must deliver
to
the Paying Agent:
(1)
a
written
notice of repurchase (a “Fundamental
Change Repurchase Notice”),
substantially in the form of Exhibit G hereto, at any time during the period
beginning upon receipt of the Fundamental Change Company Notice and ending
on
the twenty (20) Trading Days after the Effective Date (the “Fundamental
Change Repurchase Period”):
(A) if
not in
global form, the certificate numbers of the Notes which such Holder will deliver
to be repurchased, or, if not certificated, the Fundamental Change Repurchase
Notice must comply with appropriate procedures of the Depositary;
(B) the
portion of the principal amount of the Notes which the Holder will deliver
to be
repurchased, which portion must be in a principal amount of $1,000 or integral
multiples thereof; and
(C) that
such
Notes shall be repurchased as of the Fundamental Change Settlement Date pursuant
to the terms and conditions specified in the Notes and in this Indenture;
and
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(2)
the
Note
(if such Note is held other than in global form) for cancellation prior to,
on
or after the Fundamental Change Settlement Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Fundamental Change Repurchase Price
therefor; provided
that
such Fundamental Change Repurchase Price shall be so paid pursuant to this
Section 13.01 only if the Note so delivered to the Paying Agent shall conform
in
all respects to the description thereof in the related Fundamental Change
Repurchase Notice.
Provisions
of this Indenture that apply to the repurchase of all of a Note also apply
to
the repurchase of such portion of such Note.
Any
repurchase by the Company contemplated pursuant to the provisions of this
Section 13.01 shall be consummated by the delivery to the Paying Agent of the
consideration to be received by the Holder promptly following the later of
the
Fundamental Change Settlement Date and the time of delivery of the Note.
Anything herein to the contrary notwithstanding, in the case of any repurchase
of all or part of any Global Note, such Note(s) shall be surrendered for
repurchase in accordance with the rules and procedures of the Depositary as
in
effect from time to time.
Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent
the
Fundamental Change Repurchase Notice contemplated by this Section 13.01(c)
shall
have the right to withdraw such Fundamental Change Repurchase Notice at any
time
prior to the close of business on the Business Day prior to the Fundamental
Change Settlement Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 13.02.
The
Paying Agent shall promptly notify the Company of the receipt by it of any
Fundamental Change Repurchase Notice or written notice of withdrawal
thereof.
(d) Procedure
Upon Repurchase.
The
Company shall deposit cash at the time and in the manner as provided in Section
13.05, sufficient to pay the aggregate Fundamental Change Repurchase Price
of
all Notes to be purchased pursuant to this Section 13.01.
Section
13.02 Effect
of Fundamental Change Repurchase Notice
Upon
receipt by the Paying Agent of the Fundamental Change Repurchase Notice
specified in Section 13.01(c), the Holder of the Note in respect of which such
Fundamental Change Repurchase Notice was given shall (unless such Fundamental
Change Repurchase Notice is withdrawn as specified in the following two
paragraphs) thereafter be entitled to receive solely the Fundamental Change
Repurchase Price in respect of such Note. Such Fundamental Change Repurchase
Price shall be paid to such Holder, subject to receipt of funds by the Paying
Agent, promptly following the later of (x) the Fundamental Change Settlement
Date in respect of such Note (provided the conditions in Section 13.01(c) have
been satisfied) and (y) the time of delivery of such Note to the Paying Agent
by
the Holder thereof in the manner required by Section 13.01(c). Notes in respect
of which a Fundamental Change Repurchase Notice has been given by the Holder
thereof may not be converted pursuant to Article 12 on or after the date of
the
delivery of such Fundamental Change Repurchase Notice unless such Fundamental
Change Repurchase Notice has first been validly withdrawn as specified in the
following two paragraphs.
A
Fundamental Change Repurchase Notice may be withdrawn only by means of a written
notice of withdrawal delivered to the office of the Paying Agent in accordance
with the procedures set forth in the Fundamental Change Company Notice at any
time prior to the close of business on the Business Day prior to the Fundamental
Change Settlement Date specifying:
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(a) the
principal amount of the Notes in respect of which such notice of withdrawal
is
being submitted;
(b) if
certificated, the certificate numbers of the Notes in respect of which such
notice of withdrawal is being submitted, or, if not certificated, such notice
of
withdrawal must comply with appropriate procedures of the Depositary;
and
(c) the
principal amount, if any, of such Notes which remains subject to the original
Fundamental Change Repurchase Notice and which has been or will be delivered
for
repurchase by the Company.
There
shall be no repurchase of any Notes pursuant to Section 13.01 if there has
occurred (prior to, on or after, as the case may be, the giving, by the Holders
of such Notes, of the required Fundamental Change Repurchase Notice) and is
continuing an Event of Default (other than a default in the payment of the
Fundamental Change Repurchase Price in respect of such Notes). The Paying Agent
will promptly return to the respective Holders thereof any Notes (x) in respect
of which a Fundamental Change Repurchase Notice has been withdrawn in compliance
with this Indenture, or (y) held by it during the continuance of an Event of
Default (other than a default in the payment of the Fundamental Change
Repurchase Price in respect of such Notes) in which case, upon such return,
the
Fundamental Change Repurchase Notice in respect thereof shall be deemed to
have
been withdrawn.
Section
13.03 Notes
Repurchased in Whole or in Part.
In
connection with any offer to repurchase Notes under Section 13.01 (provided
that
such offer or repurchase constitutes an “issuer tender offer” for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or repurchase), the
Company shall (a) comply with Rule 13e-4 and Rule 14e-1 under the Exchange
Act,
(b) file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act, and (c) otherwise comply with all Federal and state
securities laws so as to permit the rights and obligations under Section 13.01to
be exercised in the time and in the manner specified in Section 13.01 as
applicable.
Section
13.04 Deposit
of Fundamental Change Repurchase Price.
Prior
to
10:00 a.m., Eastern Time, on the Business Day preceding the Fundamental Change
Settlement Date, the Company shall deposit with the Trustee or with the Paying
Agent (or, if the Company or a Subsidiary or an Affiliate of either of them
is
acting as the Paying Agent, shall segregate and hold in trust as provided
herein) an amount of money (in immediately available funds if deposited on
such
Business Day), sufficient to pay the Fundamental Change Repurchase Price of
all
the Notes or portions thereof which are to be repurchased as of the Fundamental
Change Settlement Date. The Company shall promptly notify the Trustee in writing
of the amount of any deposits of cash made pursuant to this Section
13.04
Section
13.05 Repayment
to the Company.
The
Trustee and the Paying Agent shall return to the Company any cash that remains
unclaimed, together with interest or dividends, if any, thereon, held by them
for the payment of the Fundamental Change Repurchase Price; provided
that to
the extent that the aggregate amount of cash or Depositary Units deposited
by
the Company pursuant to Section 13.05 exceeds the aggregate Fundamental Change
Repurchase Price of the Notes or portions thereof which the Company is obligated
to repurchase as of the Fundamental Change Settlement Date, then as soon as
practicable following the Fundamental Change Settlement Date, the Trustee or
the
Paying Agent, as the case may be, shall return any such excess to the
Company.
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ARTICLE
14
REPURCHASE
REQUIRED BY GAMING AUTHORITIES
Section
14.01 Redemption
Pursuant to Gaming Laws.
(a) Notwithstanding
any other provision of this Indenture, if any Gaming Authority requires that
a
Holder or Beneficial Owner of Notes be licensed, qualified or found suitable
under any applicable Gaming Law and such Holder or Beneficial
Owner:
(1)
fails
to
apply for a license, qualification or a finding of suitability within 30 days
(or such shorter period as may be required by the applicable Gaming Authority)
after being requested to do so by the Gaming Authority; or
(2)
is
denied
such license or qualification or not found suitable;
AREP
shall then have the right, at its option:
(3)
to
require each such Holder or Beneficial Owner to dispose of its Notes within
30
days (or such earlier date as may be required by the applicable Gaming
Authority) of the occurrence of the event described in clause (1) or (2) above,
or
(4)
to
redeem
the Notes of each such Holder or Beneficial Owner, in accordance with Rule
14e-1, if applicable, at a redemption price equal to the lowest of:
(A) the
principal amount thereof, together with accrued and unpaid interest and
Additional Interest, if any, to the earlier of the date of redemption, the
date
30 days after such Holder or Beneficial Owner is required to apply for a
license, qualification or finding of suitability (or such shorter period that
may be required by any applicable Gaming Authority) if such Holder or Beneficial
Owner fails to do so (“Application
Date”)
or of
the date of denial of license or qualification or of the finding of
unsuitability by such Gaming Authority;
(B) the
price
at which such Holder or Beneficial Owner acquired the Notes, together with
accrued and unpaid interest and Additional Interest, if any, to the earlier
of
the date of redemption, the Application Date or the date of the denial of
license or qualification or of the finding of unsuitability by such Gaming
Authority; and
(C) such
other lesser amount as may be required by any Gaming Authority.
Immediately
upon a determination by a Gaming Authority that a Holder or Beneficial Owner
of
the Notes will not be licensed, qualified or found suitable and must dispose
of
the Notes, the Holder or Beneficial Owner will, to the extent required by
applicable Gaming Laws, have no further right:
(5)
to
exercise, directly or indirectly, through any trustee or nominee or any other
person or entity, any right conferred by the Notes, the Note Guarantee or this
Indenture; or
(6)
to
receive any interest, Liquidated Damages, dividend, economic interests or any
other distributions or payments with respect to the Notes and the Note
Guarantee
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or
any
remuneration in any form with respect to the Notes and the Note Guarantee from
the Company, any Note Guarantor or the Trustee, except the redemption price
referred to above.
(b) AREP
shall notify the Trustee in writing of any such redemption as soon as
practicable. Any Holder or Beneficial Owner that is required to apply for a
license, qualification or a finding of suitability will be responsible for
all
fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities and the Company and any Note Guarantor will not reimburse any Holder
or Beneficial Owner for such expense.
(c) Except
as
set forth in this Article 14, the Notes shall not be redeemable at the option
of
the Company.
Section
14.02 Notices
to Trustee.
If
the
Company elects to redeem Notes pursuant to the redemption provisions of Section
14.01(a)(4) hereof, it must furnish to the Trustee, at least 15 days but not
more than 60 days before the applicable redemption date, an Officers’
Certificate setting forth:
(1)
that
a redemption is being effected pursuant to Section 14.01(a)(4)
hereof;
(2)
the
applicable redemption date;
(3)
the
principal amount of Notes to be redeemed
(4)
the
Holder(s) whose Notes are to be redeemed pursuant to Section 14.01(a)(4) hereof;
and
(5)
the
redemption price pursuant to Section 14.01(a)(4)(A) through (C)
hereof.
Section
14.03 Notice
of Redemption.
The
Company will mail or cause to be mailed, at least 15 days but not more than
60
days before the applicable redemption date, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.
The
notice will identify the Notes to be redeemed and will state:
(1)
that
the redemption is being effected pursuant to Section 14.01(a)(4) hereof
(2)
the
redemption date;
(3)
the
redemption price;
(4)
the
name and address of the Paying Agent;
(5)
that
Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;
(6)
that,
unless the Company defaults in making such redemption payment, interest on
Notes
called for redemption ceases to accrue on and after the applicable redemption
date; and
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(7)
that
no representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Notes.
At
the
Company’s request, the Trustee will give the notice of redemption in the
Company’s name and at its expense; provided,
however,
that
the Company has delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers’ Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section
14.04 Effect
of Notice of Redemption.
Once
notice of redemption is mailed in accordance with Section 14.03 hereof, Notes
called for redemption become irrevocably due and payable on the applicable
redemption date at the applicable redemption price. A notice of redemption
pursuant to this Article 14 may not be conditional.
Section
14.05 Deposit
of Redemption Price.
One
Business Day prior to the applicable redemption date, the Company will deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest and Additional Interest, if any, on all Notes
to
be redeemed on such date. The Trustee or the Paying Agent will promptly return
to the Company any money deposited with the Trustee or the Paying Agent by
the
Company in excess of the amounts necessary to pay the redemption price of,
and
accrued interest and Additional Interest, if any, on, all Notes to be
redeemed.
If
the
Company complies with the provisions of the preceding paragraph, on and after
the applicable redemption date, interest will cease to accrue on the Notes
or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption or purchase is not so paid upon surrender for
redemption or purchase because of the failure of the Company to comply with
the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided
in
the Notes and in Section 3.01 hereof.
Section
14.06 Global
Note Redeemed in Part.
Upon
surrender of a Note that is redeemed in part, the Company will issue and, upon
receipt of an Authentication Order, the Trustee will authenticate for the
Holder(s) at the expense of the Company a new Note equal in principal amount
to
the unredeemed portion of the Global Note surrendered.
ARTICLE
15
MAKE-WHOLE
PREMIUM
Section
15.01 Make-Whole
Premium.
(a) If,
and
only if, a Fundamental Change occurs while any Notes remain outstanding, the
Company shall pay the Make-Whole Premium to Holders of the Notes who effect
a
Fundamental Change Conversion at any time during the Fundamental Change
Repurchase Period or in connection with any Forced Conversion occurring
following the public announcement of a Fundamental Change and during the
applicable Fundamental Change Repurchase Period.
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(b) The
Make-Whole Premium shall be equal to an additional number of Depositary Units
calculated in accordance with Section 15.01(c) hereof. The Make-Whole Premium
will be in addition to, and not in substitution for, any cash, securities or
other assets otherwise due to Holders of Notes upon conversion as described
in
this Indenture.
(c) The
“Make-Whole
Premium”
shall
be equal to the principal amount of the Notes to be converted divided by $1,000
and multiplied by the applicable number of Depositary Units determined by
reference to the table below (the “Make-Whole
Premium Table”)
and is
based on the effective date of such Change in Control (the “Effective
Date”)
and
the Depositary Unit Price.
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The
exact
Depositary Unit Price and Effective Date may not be set forth on the Make-Whole
Premium Table, in which case, if the Depositary Unit Price is between two
Depositary Unit Prices on the Make-Whole Premium Table or the Effective Date
is
between two Effective Dates on the Make-Whole Premium Table, the Make-Whole
Premium shall be determined by straight-line interpolation between Make-Whole
Premium amounts set forth for the higher and lower Depositary Unit Prices and
the two Effective Dates, as applicable, based on a 365-day year (or a 366-day
year if the Effective Date occurs in a leap year). The Depositary Unit Prices
set forth in the column headers are subject to adjustment pursuant to Section
15.02.
If
the
Depositary Unit Price is less than or equal to $90.00 (subject to adjustment
pursuant to Section 15.02, the “Depositary
Unit Price Threshold”),
the
Make-Whole Premium shall be equal to zero Depositary Units. If the Depositary
Unit Price is equal to or greater than $270.00 (subject to adjustment pursuant
to Section 15.02, the “Depositary
Unit Price Cap”),
the
Make-Whole Premium shall be equal to zero Depositary Units.
(d) The
Company shall pay the Make-Whole Premium solely in Depositary Units (other
than
cash paid in lieu of fractional units) or in the same form of consideration
into
which all or substantially all of the Depositary Units have been converted
or
exchanged in connection with the Fundamental Change. If holders of the
Depositary Units receive or have the right to receive more than one form of
consideration in connection with such Fundamental Change, then, for purposes
of
the foregoing, the forms of consideration in which the Make-Whole Premium shall
be paid shall be in proportion to the different forms of consideration paid
to
holders of Depositary Units in connection with such Fundamental
Change.
(e) The
Company or, at the Company’s request, the Trustee, in the name and at the
expense of the Company, (A) shall notify the Holders of the Depositary Unit
Price and the estimated Make-Whole Premium per $1,000 original principal amount
of Notes in respect of a Fundamental Change as part of the Fundamental Change
Company Notice or otherwise in accordance with the notice provisions of the
Indenture and (B) shall notify the Holders, promptly upon the opening of
business on the Effective Date of the number of Depositary Units (or such other
securities, assets or property (including cash) into which all or substantially
all of the Depositary Units have been converted as of the Effective Date as
described above) to be paid in respect of the Make-Whole Premium in connection
with such Fundamental Change, in the manner provided in this Indenture.
(f) Promptly
after determination of the actual number of Depositary Units to be issued in
respect of the Make-Whole Premium, the Company shall file a Form 8-K with the
SEC containing this information or publish such information on the Company’s
website or through such other public medium as the Company may use at that
time.
Section
15.02 Adjustment
to the Make-Whole Premium.
Whenever
the Conversion Price shall be adjusted from time to time by the Company pursuant
to Section 12.11, the Depositary Unit Price Threshold and the Depositary Unit
Price Cap shall be adjusted and each of the Depositary Unit Prices set forth
in
the Make-Whole Premium Table shall be adjusted. The adjusted Depositary Unit
Price Threshold, Depositary Unit Price Cap and Depositary Unit Prices set forth
in the Make-Whole Premium Table shall equal the Depositary Unit Price Threshold,
Depositary Unit Price Cap and such Depositary Unit Prices, as the case may
be,
immediately prior to such adjustment multiplied by a fraction, the numerator
of
which is the Conversion Price as so adjusted and the denominator of which is
the
Conversion Price immediately prior to the adjustment giving rise to such
adjustment. Each of the share amounts set forth in the body of the Make-Whole
Premium Table shall also be adjusted in the same manner and at the same
time.
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Section
15.03 Trustee’s
Disclaimer.
The
Trustee shall have no duty to determine when a Make-Whole Premium shall be
required under this Indenture, nor the amount thereof but may accept as
conclusive evidence of the correctness thereof, and shall be fully protected
in
relying upon, the Officers’ Certificate in respect thereof, nor shall the
Trustee have a duty to determine when an adjustment to the Depositary
Unit Price Threshold, Depositary Unit Price Cap and Depositary Unit Prices
should
be
made, how it should be made or what such adjustment should be, but may accept
as
conclusive evidence of that fact or the correctness of any such adjustment,
and
shall be protected in relying upon, an Officers’ Certificate.
ARTICLE
16
MISCELLANEOUS
Section
16.01 Trust
Indenture Act Controls.
If
any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by TIA §318(c), the imposed duties will control.
Section
16.02 Notices.
Any
notice or communication by the Company, any Guarantor or the Trustee to the
others is duly given if in writing and delivered in Person or by first class
mail (registered or certified, return receipt requested), facsimile transmission
or overnight air courier guaranteeing next day delivery, to the others’
address:
If
to the
Company and/or any Guarantor:
American
Real Estate Partners, L.P.
American
Real Estate Finance Corp.
767
Fifth
Avenue, Suite 4700
New
York,
New York 10153
Facsimile
No.: (646) 365-2833
Attention:
Felicia P. Buebel, Esq.
With
a
copy to:
Proskauer
Rose LLP
1585
Broadway
New
York,
New York 10036
Telephone:
(212) 969-3000
Telecopier:
(212) 969-2900
Attention:
Ian Blumenstein, Esq.
If
to the
Trustee:
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Wilmington
Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
DE 19890
Attention
of: Corporate Trust Administration
Facsimile:
(302) 636-4145
With
a
copy to:
Curtis,
Mallet-Prevost, Colt & Mosle LLP
101
Park
Avenue
Suite
3500
New
York,
New York 10178
Telecopier
No.: (212) 697-1559
Attention:
Kathryn Alisbah, Esq.
Steven
J.
Reisman, Esq.
The
Company, any Guarantor or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or
communications.
All
notices and communications (other than those sent to Holders) will 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 transmitted by facsimile; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any
notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by
the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA § 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it will not affect
its sufficiency with respect to other Holders.
If
a
notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives
it.
If
the
Company mails a notice or communication to Holders, it will mail a copy to
the
Trustee and each Agent at the same time.
Section
16.03 Communication
by Holders of Notes with Other Holders of Notes.
Holders
may communicate pursuant to TIA § 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA
§ 312(c).
Section
16.04 Certificate
and Opinion as to Conditions Precedent.
Upon
any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(1)
an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 16.05 hereof)
stating that, in
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the
opinion of the signers, all conditions precedent and covenants, if any, provided
for in this Indenture relating to the proposed action have been satisfied;
and
(2)
an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 16.05 hereof) stating
that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.
Section
16.05 Statements
Required in Certificate or Opinion.
Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant
to
TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and
must include:
(1)
a
statement that the Person making such certificate or opinion has read such
covenant or condition;
(2)
a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;
(3)
a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express
an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(4)
a
statement as to whether or not, in the opinion of such Person, such condition
or
covenant has been satisfied.
Section
16.06 Rules
by Trustee and Agents.
The
Trustee may make reasonable rules for action by or at a meeting of Holders.
The
Registrar, Paying Agent or Conversion Agent may make reasonable rules and set
reasonable requirements for its functions.
Section
16.07 No
Personal Liability of Directors, Officers, Employees and
Stockholders.
No
director, officer, employee, incorporator, manager (or managing member) direct
or indirect member, partner or stockholder of the Company, AREH, API or any
additional Guarantor shall have any liability for any obligations of the
Company, AREH, API or any additional Guarantor under the Notes, this Indenture,
any Note Guarantee or for any claim based on, in respect of, or by reason of
such obligations or its creation. Each Holder of the Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of
the
consideration for issuance of the Notes.
Section
16.08 Governing
Law.
THE
INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS
INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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Section
16.09 No
Adverse Interpretation of Other Agreements.
This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section
16.10 Successors.
All
agreements of the Trustee in this Indenture will bind its successors. All
agreements of each Guarantor in this Indenture will bind its successors, except
as otherwise provided in Sections 5.01 and 10.05 hereof.
Section
16.11 Severability.
In
case
any provision in this Indenture, the Note Guarantees or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired
thereby.
Section
16.12 Counterpart
Originals.
The
parties may sign any number of copies of this Indenture. Each signed copy will
be an original, but all of them together represent the same
agreement.
Section
16.13 Table
of Contents, Headings, etc.
The
Table
of Contents, Cross-Reference Table and Headings of the Articles and Sections
of
this Indenture have been inserted for convenience of reference only, are not
to
be considered a part of this Indenture and will in no way modify or restrict
any
of the terms or provisions hereof.
Section
16.14 Clarity.
For
the
avoidance of doubt, the inclusion of exceptions to the provisions (including
covenants and definitions) set forth in this Indenture will not be interpreted
to imply that the matters permitted by the exception would be limited by the
terms of such provisions but for such exceptions.
[Signatures
on following page]
-
86 -
SIGNATURES
Dated
as
of April 5, 2007
AMERICAN
REAL ESTATE PARTNERS L.P.
By:
American Property Investors, Inc., its general partner
By:
Name:
Title:
AMERICAN
REAL ESTATE FINANCE CORP.
By:
Name:
Title:
AMERICAN
REAL ESTATE HOLDINGS LIMITED PARTNERSHIP
By:
American Property Investors, Inc., its general partner
By:
Name:
Title:
WILMINGTON
TRUST COMPANY
By:
Name:
Title:
Exhibit
99.1
AMERICAN
REAL ESTATE PARTNERS, L.P.
ANNOUNCES
SALE OF CONVERTIBLE NOTES
New
York, New York / April 5, 2007
-
American
Real Estate Partners, L.P. (NYSE: ACP) (“AREP”)
today announced
that it had entered into a Securities Purchase Agreement with Portside Growth
and Opportunity Fund, an investment fund managed by Ramius Capital Group, LLC
(“Ramius Capital”), and an investment fund managed by Highbridge Capital
Management, LLC (“Highbridge”) to sell an aggregate of $200 million of Variable
Rate Senior Convertible Notes due 2013 (the “Notes”) in a private placement
pursuant to Section 4(2) of the U.S. Securities Act of 1933 (the “Securities
Act”). The Notes will bear interest at a rate of LIBOR minus 125 basis points,
but no less than 4.0% nor higher than 5.5%, and will be convertible into
Depositary Units of AREP at a conversion price of $132.595 per share, subject
to
adjustments in certain circumstances.
Under
the
terms of the Securities Purchase Agreement, Ramius Capital and Highbridge will
have the option until April 13, 2007 to purchase up to an additional $400
million of Notes in the aggregate (the “Additional Notes”). In the event that
Ramius Capital and Highbridge do not purchase the full amount of such Additional
Notes, AREP will have the right, until May 5, 2007, to place such unpurchased
Additional Notes with other investors, subject to an option granted to Ramius
Capital and Highbridge to purchase up to an aggregate of $100 million of such
unpurchased Additional Notes on or before April 25, 2007.
The
sale
of the initial Notes is expected to close today. The Notes (including the
Additional Notes) have not been and will not be registered under the Securities
Act and may not be offered or sold in the United States absent registration
or
an applicable exemption from the registration requirements of the Securities
Act.
AREP,
a
master limited partnership, is a diversified holding company engaged in a
variety of businesses. AREP’s businesses currently include gaming; real estate
and home fashion. To learn more about AREP and obtain a copy of our 2006 annual
report on Form 10-K, please visit www.arep.com.
This
release contains certain “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, many of which are beyond
AREP’s ability to control or predict. Forward-looking statements may be
identified by words such as “expects,” “anticipates,” “intends,” “plans,”
“believes,” “seeks,” “estimates,” “will” or words of similar meaning and
include, but are not limited to, statements about the expected future business
and financial performance of AREP and its subsidiaries. AREP undertakes no
obligation to publicly update or review any forward-looking information, whether
as a result of new information, future developments or otherwise.
For
further information, please contact:
Andrew
Skobe
American
Real Estate Partners, L.P.
(212)
702-4383