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.

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NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:
 
1.    Definitions.
 
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:
 
"1933 Act" has the meaning set forth in the preamble of this Agreement.
 
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder.
 
"Additional Effectiveness Date" means the date the Additional Shelf Registration
Statement is declared effective by the SEC.
 
"Additional Effectiveness Deadline" means the date (i) in the event that the
Additional Shelf Registration Statement is not subject to a full review by the
SEC, sixty (60) calendar days after the Additional Filing Date or (ii) in the
event that the Additional Shelf Registration Statement is subject to a full
review by the SEC, ninety (90) calendar days after the Additional Filing Date,
in each case subject to any Suspension Period pursuant to Section 2(e) hereof.
 
"Additional Filing Date" means the date on which the Additional Shelf
Registration Statement is filed with the SEC.
 
"Additional Filing Deadline" means the later of (i) the date sixty (60) days
after the date substantially all of the Transfer Restricted Securities
registered under the immediately preceding Shelf Registration Statement are sold
and (ii) the date six (6) months from the Initial Effective Date or the last
Additional Effective Date, as applicable, in each case subject to any Suspension
Period pursuant to Section 2(e) hereof.
 
"Additional Interest" has the meaning set forth in Section 2(f) hereof.
 
"Additional Interest Payment Date" means each January 15, April 15, July 15 and
October 15.
 
"Additional Required Registration Amount" means any Cutback Units not previously
included on a Shelf Registration Statement; provided, however, that such amount
shall not exceed a number of Units equal to one third (1/3) of an amount equal
to the non-affiliate public float of the Company's Units immediate preceding the
consummation of the transactions contemplated by the Securities Purchase
Agreement, without regard to any limitations on conversions of the Notes.
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"Additional Shelf Registration Statement" means any "shelf" registration
statement of the Company filed pursuant to the provisions of Section 2(b) hereof
which covers the Additional Transfer Restricted Securities on Form S-3 or on
another appropriate form (as determined by the Company) for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all documents incorporated or deemed to be incorporated by
reference therein.
 
"Additional Transfer Restricted Securities" means, (i) any Cutback Units not
previously included on a Shelf Registration Statement and (ii) any securities of
the Company issued or issuable with respect to the Cutback Units as a result of
any split, dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on conversions of the Notes, until the
earliest of the date on which such Cutback Units, or any security issued with
respect thereto upon any dividend, split or similar event, as the case may be:
(i) has been transferred pursuant to a Shelf Registration Statement or another
registration statement covering such Conversion Units which has been filed with
the SEC pursuant to the 1933 Act, in either case after such registration
statement has become effective and while such registration statement is
effective under the 1933 Act; (ii) has been transferred pursuant to Rule 144;
(iii) may be sold or transferred pursuant to Rule 144(k); or (iv) ceases to be
outstanding.
 
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person
whether through the ownership of voting securities or by agreement or otherwise.
 
"Business Day" means any day other than Saturday, Sunday or any other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.
 
"Buyers" has the meaning set forth in the preamble of this Agreement.
 
"Company" has the meaning set forth in the preamble of this Agreement.
 
"Conversion Units" has the meaning set forth in the preamble of this Agreement.
 
"Cutback Units" means any Transfer Restricted Securities not included on a Shelf
Registration Statement previously declared effective hereunder.
 
"Effective Date" means the Initial Effective Date and the Additional Effective
Date, as applicable.
 
"Effectiveness Deadline" means the Initial Effectiveness Deadline and the
Additional Effectiveness Deadline, as applicable.
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"Filing Date" means the Initial Filing Date and the Additional Filing Date, as
applicable.
 
"Filing Deadline" means the Initial Filing Deadline and the Additional Filing
Deadline, as applicable.
 
"Holder" means a Person who is a holder or beneficial owner of any Notes or
Conversion Units (including, without limitation, Notes or Conversion Units
received pursuant to a transfer).
 
"Holder Information" with respect to any Holder means information with respect
to such Holder required to be included in any Shelf Registration Statement or
the related Prospectus pursuant to the 1933 Act and which information is
included therein in reliance upon and in conformity with information furnished
to the Company in writing by such Holder specifically for inclusion therein,
including information provided by such Holder in its Notice and Questionnaire.
 
"Indenture" has the meaning set forth in the preamble of this Agreement.
 
"Initial Closing Date" means the date of the closing of the sale of the Initial
Notes as contemplated by the Securities Purchase Agreement.
 
"Initial Effective Date" means the date the Initial Shelf Registration Statement
has been declared effective by the SEC.
 
"Initial Effectiveness Deadline" means the date (i) in the event that the
Initial Shelf Registration Statement is not subject to a full review by the SEC,
one-hundred and eighty (180) calendar days after the Initial Closing Date or
(ii) in the event that the Initial Shelf Registration Statement is subject to a
full review by the SEC, two-hundred and seventy (270) calendar days after the
Initial Closing Date, in each case subject to any Suspension Period pursuant to
Section 2(e) hereof.
 
"Initial Filing Date" means the date on which the Initial Shelf Registration
Statement is filed with the SEC.
 
"Initial Filing Deadline" means ninety (90) calendar days after the Initial
Closing Date, subject to any Suspension Period pursuant to Section 2(e) hereof.
 
"Initial Required Registration Amount" means the number of Conversion Units
(including, without limitation, any Make-Whole Units issuable upon conversion of
the Notes) issued or issuable pursuant to the Notes as of the trading day
immediately preceding the applicable date of determination; provided, however,
that such number of Conversion Units shall not exceed one third (1/3) of an
amount equal to the non-affiliate public float of the Company’s Units
immediately preceding the consummation of the transactions contemplated by the
Securities Purchase Agreement, without regard to any limitations on conversions
of the Notes.
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"Initial Shelf Registration Statement" means any "shelf" registration statement
of the Company filed pursuant to the provisions of Section 2(a) hereof which
covers the Initial Transfer Restricted Securities on Form S-3 or on another
appropriate form (as determined by the Company) for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all documents incorporated or deemed to be incorporated by reference
therein.
 
"Initial Transfer Restricted Securities" means the Conversion Units (including,
without limitation, any Make-Whole Units issuable upon conversion of the Notes)
issued and issuable upon conversion of the Notes (and any security issued with
respect thereto upon any dividend, split or similar event) until the earliest of
the date on which such Conversion Units, or any security issued with respect
thereto upon any dividend, split or similar event, as the case may be: (i) has
been transferred pursuant to a Shelf Registration Statement or another
registration statement covering such Conversion Units which has been filed with
the SEC pursuant to the 1933 Act, in either case after such registration
statement has become effective and while such registration statement is
effective under the 1933 Act; (ii) has been transferred pursuant to Rule 144;
(iii) may be sold or transferred pursuant to Rule 144(k); or (iv) ceases to be
outstanding.
 
"Legal Counsel" means one firm or counsel designated by the Company (and
reasonably acceptable to the Buyers acting on behalf of the Holders) to act as
counsel for the Holders in connection therewith, which firm shall be 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.
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"Questionnaire Deadline" has the meaning set forth in Section 2(c) hereof.
 
"Record Holder" means each Person who is registered on the books of the
registrar as the holder of Notes at the close of business on each January 1,
April 1, July 1 and October 1 immediately preceding each Additional Interest
Payment Date.
 
"Registration Delay Event" has the meaning set forth in Section 2(f) hereof.
 
"Required Registration Amount" means the Initial Required Registration Amount
and the Additional Required Registration Amount, as applicable.
 
"Rule 144" means Rule 144 under the 1933 Act (or any similar provision
promulgated by the SEC).
 
"Rule 144A" means Rule 144A under the 1933 Act (or any successor provision
promulgated by the SEC).
 
"Rule 144(k)" means Rule 144(k) under the 1933 Act (or any successor provision
promulgated by the SEC).
 
"Rule 415" means Rule 415 under the 1933 Act (or any successor provision
promulgated by the SEC).
 
"SEC" means the Securities and Exchange Commission.
 
"Securities Purchase Agreement" has the meaning set forth in the preamble of
this Agreement.
 
"Shelf Registration" means a registration effected pursuant to Section 2 hereof.
 
"Shelf Registration Period" has the meaning set forth in Section 2(d) hereof.
 
"Shelf Registration Statement" means the Initial Shelf Registration Statement
and the Additional Shelf Registration Statement, as applicable.
 
"Suspension Period" has the meaning set forth in Section 2(e) hereof.
 
"Transfer Restricted Securities" means the Initial Transfer Restricted
Securities and the Additional Transfer Restricted Securities, as applicable.
 
"Trustee" means the trustee with respect to the Notes under the Indenture.
 
"Units" means the depositary units representing limited partner interests of the
Company, as it exists on the date of this Agreement and any other equity capital
or other securities of the Company into which such Units may be reclassified or
changed, together with any and all other securities which may from time to time
be issuable upon conversion of Notes.
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All references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information incorporated or deemed
to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include any
document filed with the SEC under the 1934 Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.
 
2.    Shelf Registration Statement.
 
a.    The Company shall, at its expense, prepare and, as soon as practicable but
in no event later than the Initial Filing Deadline, file with the SEC the
Initial Shelf Registration Statement with respect to resales of the Initial
Transfer Restricted Securities by the Holders from time to time on a delayed or
continuous basis pursuant to Rule 415 and in accordance with the methods of
distribution set forth in such Initial Shelf Registration Statement and
thereafter shall use its reasonable best efforts to cause such Initial Shelf
Registration Statement to be declared effective under the 1933 Act as soon as
possible, but no later than the Initial Effectiveness Deadline. The Initial
Shelf Registration Statement prepared pursuant hereto shall register for resale
at least a number of Initial Transfer Restricted Securities equal to the Initial
Required Registration Amount determined as of date the Initial Shelf
Registration Statement is initially filed with the SEC. The Shelf Registration
Statement shall contain the "Selling Securityholders" and "Plan of Distribution"
sections in substantially the form attached hereto as Exhibit B. The Company
shall supplement or amend the Initial Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for the Initial Shelf Registration Statement, or by the 1933
Act, the 1934 Act or the SEC. By 9:30 a.m., New York City time, on the date
following the Initial Effective Date, the Company shall file with the SEC in
accordance with Rule 424 under the 1933 Act the final Prospectus to be used in
connection with sales pursuant to such Initial Shelf Registration Statement.
 
b.    The Company shall, at its expense, prepare and, as soon as practicable but
in no event later than the Additional Filing Deadline, file with the SEC the
Additional Shelf Registration Statement with respect to resales of the
Additional Transfer Restricted Securities by the Holders from time to time on a
delayed or continuous basis pursuant to Rule 415 and in accordance with the
methods of distribution set forth in such Additional Shelf Registration
Statement and thereafter shall use its reasonable best efforts to cause such
Additional Shelf Registration Statement to be declared effective under the 1933
Act as soon as possible, but no later than the Additional Effectiveness
Deadline. The Additional Registration Statement

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prepared pursuant hereto shall register for resale at least a number of
Additional Transfer Restricted Securities equal to the Additional Required
Registration Amount determined as of date the Additional Shelf Registration
Statement is initially filed with the SEC. To the extent the all of the Transfer
Restricted Securities have not been registered on an effective Shelf
Registration Statement, the Company shall file Additional Shelf Registration
Statements successively trying to register on each such Additional Registration
Statement the maximum number of remaining Additional Registrable Securities
until all of the Transfer Restricted Securities have been registered with the
SEC. The Shelf Registration Statement shall contain the "Selling
Securityholders" and "Plan of Distribution" sections in substantially the form
attached hereto as Exhibit B. The Company shall supplement or amend the
Additional Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for the
Additional Shelf Registration Statement, or by the 1933 Act, the 1934 Act or the
SEC. By 9:30 a.m., New York City time, on the date following the Additional
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final Prospectus to be used in connection with sales
pursuant to such Additional Shelf Registration Statement.
 
c.    (i)    The Company shall name each Holder that delivers a properly
completed and signed Notice and Questionnaire to the Company as a selling
security holder in the Shelf Registration Statement. A Holder of Transfer
Restricted Securities may include such securities in the Shelf Registration
Statement only if the Holder sends by first-class registered mail or by courier
with delivery confirmation, a properly completed Notice and Questionnaire to the
Company. In order to be included in the Shelf Registration Statement at the time
of its effectiveness, a Buyer must deliver to the Company its properly completed
Notice and Questionnaire on or prior to the 20th Business Day of the Initial
Closing Date (or, in the case of a Holder that is a transferee of Transfer
Restricted Securities, on or prior to the earlier of (x) the fifth Business Day
after the completion of the transfer of Transfer Restricted Securities to the
transferee and (y) 9:00 a.m., New York time, on the fifth Business Day prior to
effectiveness of the Shelf Registration Statement) (in any case, the
"Questionnaire Deadline"). The Company agrees and undertakes that it shall
distribute a Notice and Questionnaire (A) no later than 20 Business Days prior
to the expected effectiveness of each Shelf Registration Statement other than
the Initial Shelf Registration Statement to each Holder in accordance with
Section 6(c) hereof, and (B) in the case of a Holder that is a transferee of
Transfer Restricted Securities upon the request of such transferee Holder given
in accordance with Section 6(c) hereof, to such Holder at the address set forth
in such request.
 
(ii)    Following the effectiveness of the Shelf Registration Statement, upon
receipt of a completed Notice and Questionnaire from a Holder, the Company will,
as promptly as practicable, but in any event within five (5) Business Days after
its receipt thereof, file any amendments to the Shelf Registration Statement or
supplements to the related Prospectus as are necessary to permit the Holder to
deliver the Prospectus to purchasers of Transfer Restricted Securities (subject
to the right of the Company to suspend the use of the Prospectus as described in
Section 2(e) hereof). The Company shall use its reasonable best efforts to cause
any such post-effective amendment to become effective under the 1933 Act as
promptly as is practicable; provided, that if a Notice and Questionnaire is
delivered to the Company during a Suspension Period, the Company shall not be
obligated to amend the Shelf

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Registration Statement or supplement the Prospectus until the termination of
such Suspension Period.
 
(iii)    Each Holder as to which the Shelf Registration Statement is being
effected agrees to furnish promptly to the Company upon reasonable request (x)
such other information as the Company may reasonably request for use in
connection with the Shelf Registration Statement or Prospectus or in any
application to be filed with or under state securities laws and (y) all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not misleading.
 
d.    The Company shall use its reasonable best efforts to keep the applicable
Shelf Registration Statement continuously effective, supplemented and amended
under the 1933 Act in order to permit the Prospectus forming a part thereof to
be usable, subject to Section 2(e) hereof, by all Notice Holders until the
earliest to occur of: (i) the last date on which the holding period applicable
to sales of all applicable Transfer Restricted Securities under Rule 144(k) has
expired; (ii) the date as of which all applicable Transfer Restricted Securities
have been transferred under Rule 144; and (iii) such date as of which all
applicable Transfer Restricted Securities have been sold pursuant to the
applicable Shelf Registration Statement (in any such case, such period being
called the "Shelf Registration Period"). The Company will, in order to fulfill
its obligations and this Section 2(d): (x) subject to Section 2(e), prepare and
file with the SEC such amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep the Shelf Registration
Statement continuously effective for the Shelf Registration Period; (y) subject
to Section 2(e), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the 1933 Act; and (z) comply in all
material respects with the provisions of the 1933 Act with respect to the
disposition of all Transfer Restricted Securities covered by the Shelf
Registration Statement during the Shelf Registration Period.
 
e.    The Company may suspend the availability of any Shelf Registration
Statement and the use of any Prospectus, delay the filing of any Shelf
Registration Statement or delay the effectiveness of any Shelf Registration
Statement (the period during which the availability of any Shelf Registration
Statement and any Prospectus may be suspended and the filing or effectiveness
may be delayed herein referred to as the "Suspension Period"), without incurring
any obligation to pay Additional Interest pursuant to Section 2(f) for a period
not to exceed 60 days in the aggregate during any 12-month period, in each case
only for valid business reasons, to be determined in good faith by the Company
in its reasonable judgment (which shall not include the avoidance of the
Company's obligations hereunder), including, without limitation, the acquisition
or divestiture of assets, pending corporate developments, public filings with
the SEC and similar events; provided, that the Company promptly thereafter
complies with the requirements of Section 3(j) hereof, if applicable. The first
day of any Suspension Period must be at least five (5) trading days after the
last day of any prior Suspension Period.
 
f.    The Company and the Buyers agree that the Holders of Transfer Restricted
Securities will suffer damages, and it would not be feasible to ascertain the
extent of such damages with precision, if the Company fails to fulfill its
obligations under Section 2 hereof. Accordingly, if: (i) the Shelf Registration
Statement covering all the Transfer Restricted

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Securities required to be covered thereby and required to be filed by the
Company pursuant to this Agreement is (A) not filed with the SEC on or before
the Filing Deadline (subject to any Suspension Period) or (B) not declared
effective by the SEC on or before the Effectiveness Deadline (subject to any
Suspension Period) or (ii) the Shelf Registration Statement is filed and
declared effective but shall thereafter cease to be effective (without being
succeeded immediately by a replacement Shelf Registration Statement filed and
declared effective) or usable (including as a result of a Suspension Period) for
the offer and sale of Transfer Restricted Securities for a period of time
(including any Suspension Period) which exceeds 60 days in the aggregate in any
12-month period (each such event referred to in clauses (i) through (ii), a
"Registration Delay Event"); the Company shall pay to each Notice Holder (who is
also a Record Holder) during any period in which a Registration Delay Event has
occurred or is continuing, a payment (which payment shall be the sole and
exclusive remedy available to such Notice Holder except for injunctive relief
which may include an injunction to perform, or refrain from performing, any act
contemplated hereunder or to accomplish any of the matters set forth herein) in
an amount (the "Additional Interest") equal to one third of a percent (0.33%)
per 30 day period of such Registration Delay Event per $1,000 principal amount
of Notes related to the Transfer Restricted Securities subject to such Shelf
Registration Statement for the period during which such Registration Delay Event
has occurred and is continuing, it being understood that all calculations
pursuant to this and the preceding sentence shall be carried out to five decimal
places. Following the cure of all Registration Delay Events, Additional Interest
will cease to accrue with respect to such Registration Delay Events. All accrued
Additional Interest shall be paid by the Company on each Additional Interest
Payment Date in cash to the date of such cure and Additional Interest will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Notwithstanding anything in the Agreement to the contrary, Additional Interest
shall only be payable to Notice Holders. Notwithstanding anything herein or in
the Securities Purchase Agreement to the contrary, in no event shall the
aggregate amount of Additional Interest (other than Additional Interest payable
pursuant to events that are within the control of the Company) exceed, in the
aggregate, four percent (4%) of (i) the Purchase Price (as defined in the
Securities Purchase Agreement) of the Initial Notes and (ii) the purchase price
paid by Buyers for any Additional Notes purchased, calculated pursuant to
Section 1(d) of the Securities Purchase Agreement. Notwithstanding anything
herein or in the Securities Purchase Agreement to the contrary, the Company
shall not be obligated to pay Additional Interest to an Investor under this
Section 2(f) if (i) the Registration Delay Event pursuant to which such
Additional Interest is due is caused by the SEC requiring such Investor to be
named as an underwriter in a Registration Statement, (ii) such Investor refuses
to be named as an underwriter therein and (iii) the SEC's requirement for an
Investor to be named as an underwriter could not be obviated, either by reducing
the number of Registrable Securities in such Registration Statement or other
reasonable actions by the Company.
 
g.    All of the Company's obligations (including, without limitation, the
obligation to pay Additional Interest) set forth in the preceding paragraph
which are outstanding or exist with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full. Notwithstanding the foregoing, no Additional
Interest shall accrue as to any Transfer Restricted Security from and after the
earlier of: (i) the date such security is no longer a Transfer Restricted
Security; and (ii) the expiration of the Shelf Registration Period.

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h.    Immediately upon the occurrence or the termination of a Registration Delay
Event, the Company shall give the Trustee, so long as the Notes remain
outstanding, notice of such commencement or termination of the obligation to pay
Additional Interest with regard to the Notes, and the amount thereof and of the
nature of the default giving rise to such commencement or the event giving rise
to such termination, as the case may be (such notice to be contained in an
Officer's Certificate (as such term is defined in the Indenture)), and prior to
receipt of such Officer's Certificate the Trustee and the transfer and paying
agent shall be entitled to assume that no such commencement or termination has
occurred, as the case may be.
 
3.    Registration Procedures.
 
In connection with any Shelf Registration Statement, the following provisions
shall apply:
 
a.    The Company shall: (i) furnish to the Buyers, within a reasonable period
of time, but in any event within five (5) Business Days, prior to the filing
thereof with the SEC to afford the Buyers and their counsel a reasonable
opportunity for review, a copy of each Shelf Registration Statement, and each
amendment thereof, and a copy of each Prospectus, and each amendment or
supplement thereto (excluding amendments caused by the filing of a report under
the 1934 Act), and shall reflect in each such document, when so filed with the
SEC, such comments as the Buyers may reasonably propose therein; and (ii)
include information regarding the Notice Holders and the methods of distribution
they have elected for their Transfer Restricted Securities provided to the
Company in Notice and Questionnaires as necessary to permit such distribution by
the methods specified therein.
 
b.    Subject to Section 2(e), the Company shall ensure that: (i) any Shelf
Registration Statement and any amendment thereto and any Prospectus forming a
part thereof and any amendment or supplement thereto comply in all material
respects with the 1933 Act and the rules and regulations thereunder; (ii) any
Shelf Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and (iii) any Prospectus forming a part of any Shelf
Registration Statement, and any amendment or supplement to such Prospectus, does
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation with respect to any Holder Information.
 
c.    The Company, as promptly as reasonably practicable (but in any event
within two Business Days), shall notify the Buyers and each Notice Holder:
 
(i)    when any Prospectus or any supplement thereto has been filed with the SEC
and when the Shelf Registration Statement or any post-effective amendment
thereto has become effective;
 
(ii)    of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Shelf
Registration

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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

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(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.

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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

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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.

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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

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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

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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.

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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:
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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.

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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-

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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-

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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-

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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-

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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-

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EXHIBIT A
 
QUESTIONNAIRE
 

1.
(a)
Full Legal Name of Selling Securityholder:

 

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(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:

 

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(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:

 

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2.
Address for Notices to Selling Securityholder:

 

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Telephone:
 
Fax:
 
Contact Person:
 
3.
Beneficial Ownership of Transfer Restricted Securities:

 

 
(a)
Type and Principal Amount of Transfer Restricted Securities beneficially owned:

 

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(b)
CUSIP No(s). of such Transfer Restricted Securities beneficially owned:

 

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A-1

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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:

 

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--------------------------------------------------------------------------------

 

 
(b)
CUSIP No(s). of such Other Securities beneficially owned:

 

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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

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(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
 
 
 

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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

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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,
 
 

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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

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·    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:
 

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--------------------------------------------------------------------------------

 
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

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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

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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

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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

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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

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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

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·
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

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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

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