Unassociated Document


    Exhibit
      10.42

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    REGISTRATION
      RIGHTS AGREEMENT
      (this
      "Agreement"),
      dated
      as of April 4, 2007, by and among American Real Estate Partners, LP, a Delaware
      limited partnership with headquarters located at 767 Fifth Avenue, Suite 4700,
      New York, New York 10153 (the "Company"),
      the
      undersigned buyers (the "Initial
      Buyers")
      and
      the investors that have executed one or more Joinder Agreements (as defined
      in
      the Securities Purchase Agreement) pursuant to Section 1(b) of the Securities
      Purchase Agreement (together with the Initial Buyers, each, a "Buyer",
      and
      collectively, the "Buyers").

     

    WHEREAS:

     

    A.    The
      Company has authorized the issuance of up to $600,000,000 of Senior Convertible
      Notes due 2013 pursuant to the Indenture dated of even date herewith, between
      the Company and Wilmington Trust Company, as Trustee (as the same may be amended
      from time to time, the "Indenture").

     

    B.    In
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the "Securities
      Purchase Agreement"),
      the
      Company has agreed, upon the terms and subject to the conditions set forth
      in
      the Securities Purchase Agreement, to issue and sell, at an Initial Closing
      (as
      defined in the Securities Purchase Agreement), to the Initial Buyers an
      aggregate of $200,000,000 principal amount of the Notes (the "Initial
      Notes")
      which
      will, among other things, be convertible into Units (as defined below) (as
      converted, the "Initial
      Conversion Units"),
      in
      accordance with the terms of the Initial Notes. 

     

    C.    In
      connection with the Securities Purchase Agreement, the Initial Buyers shall
      have
      the right to participate in one or more Additional Closings (as defined in
      the
      Securities Purchase Agreement) in order to purchase, and require the Company
      to
      sell up to an additional $400,000,000 in aggregate principal amount of Notes
      (the "Additional
      Notes,"
      and
      together with the Initial Notes, the "Notes")
      which
      will, among other things, be convertible into Units (as converted, collectively,
      the "Additional
      Conversion Units,"
      and
      together with the Initial Conversion Units, the "Conversion
      Units").
      

     

    D.    In
      connection with the Securities Purchase Agreement, the Company may permit one
      or
      more additional parities (each of which shall become a party to the Securities
      Purchase Agreement and this Agreement by executing a Joinder Agreement) to
      purchase and require the Company to sell any Additional Notes not previously
      sold to the Initial Buyers.

     

    E.    To
      induce
      the Initial Buyers to execute and deliver the Securities Purchase Agreement
      and
      each Additional Buyer to execute a Joinder Agreement, the Company has agreed
      to
      provide certain registration rights under the Securities Act of 1933, as
      amended, and the rules and regulations thereunder, or any similar successor
      statute (collectively, the "1933
      Act"),
      and
      applicable state securities laws.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and each of the Buyers hereby agree as
      follows:

     

    1.    Definitions.
      

     

    Capitalized
      terms used herein and not otherwise defined herein shall have the respective
      meanings set forth in the Securities Purchase Agreement. As used in this
      Agreement, the following terms shall have the following meanings:

     

    "1933
      Act"
      has the
      meaning set forth in the preamble of this Agreement.

     

    "1934
      Act"
      means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      of the SEC promulgated thereunder.

     

    "Additional
      Effectiveness Date"
      means
      the date the Additional Shelf Registration Statement is declared effective
      by
      the SEC.

     

    "Additional
      Effectiveness Deadline"
      means
      the date (i) in the event that the Additional Shelf Registration Statement
      is
      not subject to a full review by the SEC, sixty (60) calendar days after the
      Additional Filing Date or (ii) in the event that the Additional Shelf
      Registration Statement is subject to a full review by the SEC, ninety (90)
      calendar days after the Additional Filing Date, in each case subject to any
      Suspension Period pursuant to Section 2(e) hereof.

     

    "Additional
      Filing Date"
      means
      the date on which the Additional Shelf Registration Statement is filed with
      the
      SEC.

     

    "Additional
      Filing Deadline"
      means
      the later of (i) the date sixty (60) days after the date substantially all
      of
      the Transfer Restricted Securities registered
      under the immediately preceding Shelf Registration Statement are
      sold
      and (ii)
      the date six (6) months from the Initial Effective Date or the last Additional
      Effective Date, as applicable, in each case subject to any Suspension Period
      pursuant to Section 2(e) hereof.

     

    "Additional
      Interest"
      has the
      meaning set forth in Section 2(f) hereof.

     

    "Additional
      Interest Payment Date"
      means
      each January 15, April 15, July 15 and October 15.

     

    "Additional
      Required Registration Amount"
      means
      any Cutback Units not previously included on a Shelf Registration Statement;
      provided,
      however,
      that
      such amount shall not exceed a number of Units equal to one third (1/3) of
      an
      amount equal to the non-affiliate public float of the Company's Units immediate
      preceding the consummation of the transactions contemplated by the Securities
      Purchase Agreement, without regard to any limitations on conversions of the
      Notes.

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    "Additional
      Shelf Registration Statement"
      means
      any "shelf" registration statement of the Company filed pursuant to the
      provisions of Section 2(b) hereof which covers the Additional Transfer
      Restricted Securities on Form S-3 or on another appropriate form (as determined
      by the Company) for an offering to be made on a delayed or continuous basis
      pursuant to Rule 415 and all amendments and supplements to such registration
      statement, including post-effective amendments, in each case including the
      Prospectus contained therein, all exhibits thereto and all documents
      incorporated or deemed to be incorporated by reference therein. 

     

    "Additional
      Transfer Restricted Securities"
      means,
      (i) any Cutback Units not previously included on a Shelf Registration Statement
      and (ii) any securities of the Company issued or issuable with respect to the
      Cutback Units as a result of any split, dividend, recapitalization, exchange
      or
      similar event or otherwise, without regard to any limitations on conversions
      of
      the Notes, until the earliest of the date on which such Cutback Units, or any
      security issued with respect thereto upon any dividend, split or similar event,
      as the case may be: (i) has been transferred pursuant to a Shelf Registration
      Statement or another registration statement covering such Conversion Units
      which
      has been filed with the SEC pursuant to the 1933 Act, in either case after
      such
      registration statement has become effective and while such registration
      statement is effective under the 1933 Act; (ii) has been transferred pursuant
      to
      Rule 144; (iii) may be sold or transferred pursuant to Rule 144(k); or (iv)
      ceases to be outstanding.

     

    "Affiliate"
      of any
      specified Person means any other Person directly or indirectly controlling
      or
      controlled by or under direct or indirect common control with such specified
      Person. For the purposes of this definition, "control" (including, with
      correlative meanings, the terms "controlling," "controlled by" and "under common
      control with"), as used with respect to any Person, shall mean the possession,
      directly or indirectly, of the power to direct or cause the direction of the
      management or policies of such Person whether through the ownership of voting
      securities or by agreement or otherwise. 

     

    "Business
      Day"
      means
      any day other than Saturday, Sunday or any other day on which commercial banks
      in The City of New York are authorized or required by law to remain
      closed.

     

    "Buyers"
      has the
      meaning set forth in the preamble of this Agreement.

     

    "Company"
      has the
      meaning set forth in the preamble of this Agreement.

     

    "Conversion
      Units"
      has the
      meaning set forth in the preamble of this Agreement.

     

    "Cutback
      Units"
      means
      any Transfer Restricted Securities not included on a Shelf Registration
      Statement previously declared effective hereunder.

     

    "Effective
      Date"
      means
      the Initial Effective Date and the Additional Effective Date, as
      applicable.

     

    "Effectiveness
      Deadline"
      means
      the Initial Effectiveness Deadline and the Additional Effectiveness Deadline,
      as
      applicable.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    "Filing
      Date"
      means
      the Initial Filing Date and the Additional Filing Date, as applicable.


     

    "Filing
      Deadline"
      means
      the Initial Filing Deadline and the Additional Filing Deadline, as
      applicable.

     

    "Holder"
      means a
      Person who is a holder or beneficial owner of any Notes or Conversion Units
      (including, without limitation, Notes or Conversion Units received pursuant
      to a
      transfer).

     

    "Holder
      Information"
      with
      respect to any Holder means information with respect to such Holder required
      to
      be included in any Shelf Registration Statement or the related Prospectus
      pursuant to the 1933 Act and which information is included therein in reliance
      upon and in conformity with information furnished to the Company in writing
      by
      such Holder specifically for inclusion therein, including information provided
      by such Holder in its Notice and Questionnaire. 

     

    "Indenture"
      has the
      meaning set forth in the preamble of this Agreement.

     

    "Initial
      Closing Date"
      means
      the date of the closing of the sale of the Initial Notes as contemplated by
      the
      Securities Purchase Agreement.

     

    "Initial
      Effective Date"
      means
      the date the Initial Shelf Registration Statement has been declared effective
      by
      the SEC.

     

    "Initial
      Effectiveness Deadline"
      means
      the date (i) in the event that the Initial Shelf Registration Statement is
      not
      subject to a full review by the SEC, one-hundred and eighty (180) calendar
      days
      after the Initial Closing Date or (ii) in the event that the Initial Shelf
      Registration Statement is subject to a full review by the SEC, two-hundred
      and
      seventy (270) calendar days after the Initial Closing Date, in each case subject
      to any Suspension Period pursuant to Section 2(e) hereof.

     

    "Initial
      Filing Date"
      means
      the date on which the Initial Shelf Registration Statement is filed with the
      SEC.

     

    "Initial
      Filing Deadline"
      means
      ninety (90) calendar days after the Initial Closing Date, subject to any
      Suspension Period pursuant to Section 2(e) hereof.

     

    "Initial
      Required Registration Amount"
      means
      the number of Conversion Units (including, without limitation, any Make-Whole
      Units issuable upon conversion of the Notes) issued or issuable pursuant to
      the
      Notes as of the trading day immediately preceding the applicable date of
      determination; provided,
      however,
      that
      such number of Conversion Units shall not exceed one third (1/3) of an amount
      equal to the non-affiliate public float of the Company’s Units immediately
      preceding the consummation of the transactions contemplated by the Securities
      Purchase Agreement, without regard to any limitations on conversions of the
      Notes.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    "Initial
      Shelf Registration Statement"
      means
      any "shelf" registration statement of the Company filed pursuant to the
      provisions of Section 2(a) hereof which covers the Initial Transfer Restricted
      Securities on Form S-3 or on another appropriate form (as determined by the
      Company) for an offering to be made on a delayed or continuous basis pursuant
      to
      Rule 415 and all amendments and supplements to such registration statement,
      including post-effective amendments, in each case including the Prospectus
      contained therein, all exhibits thereto and all documents incorporated or deemed
      to be incorporated by reference therein.

     

    "Initial
      Transfer Restricted Securities"
      means
      the Conversion Units (including, without limitation, any Make-Whole Units
      issuable upon conversion of the Notes) issued and issuable upon conversion
      of
      the Notes (and any security issued with respect thereto upon any dividend,
      split
      or similar event) until the earliest of the date on which such Conversion Units,
      or any security issued with respect thereto upon any dividend, split or similar
      event, as the case may be: (i) has been transferred pursuant to a Shelf
      Registration Statement or another registration statement covering such
      Conversion Units which has been filed with the SEC pursuant to the 1933 Act,
      in
      either case after such registration statement has become effective and while
      such registration statement is effective under the 1933 Act; (ii) has been
      transferred pursuant to Rule 144; (iii) may be sold or transferred pursuant
      to
      Rule 144(k); or (iv) ceases to be outstanding.

     

    "Legal
      Counsel"
      means
      one firm or counsel designated by the Company (and reasonably acceptable to
      the
      Buyers acting on behalf of the Holders) to act as counsel for the Holders in
      connection therewith, which firm shall be Schulte Roth & Zabel
      LLP.

     

    "Losses"
      has the
      meaning set forth in Section 5(d) hereof.

     

    "Majority
      Holders"
      means
      the Holders of a majority of the then outstanding aggregate principal amount
      of
      Notes being registered under a Shelf Registration Statement; provided that
      Holders of the Units issued upon conversion of Notes shall be deemed to be
      Holders of the aggregate principal amount of Notes from which such Unit was
      converted; and provided further, that Notes or Units which have been sold or
      otherwise transferred pursuant to the Shelf Registration Statement shall not
      be
      included in the calculation of Majority Holders. 

     

    "NASD"
      means
      the National Association of Securities Dealers, Inc. 

     

    "Notes"
      has the
      meaning set forth in the preamble hereto. 

     

    "Notice
      and Questionnaire"
      means a
      Selling Securityholder Notice and Questionnaire substantially in the form of
      Exhibit
      A
      attached
      hereto. 

     

    "Notice
      Holder"
      means
      any Holder of Transfer Restricted Securities that has delivered a properly
      completed and signed Notice and Questionnaire to the Company in accordance
      with
      Section 2(c) hereof.

     

    "Person"
      has the
      meaning set forth in the Indenture.

     

    "Prospectus"
      means
      the prospectus included in any Shelf Registration Statement (including, without
      limitation, a prospectus that discloses information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A under the 1933 Act), as amended or supplemented by any prospectus
      supplement, with respect to the terms of the offering of any portion of the
      Notes or Conversion Units covered by such Shelf Registration Statement, and
      all
      amendments and supplements to such prospectus, including all documents
      incorporated or deemed to be incorporated by reference in such
      prospectus.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    "Questionnaire
      Deadline"
      has the
      meaning set forth in Section 2(c) hereof. 

     

    "Record
      Holder"
      means
      each Person who is registered on the books of the registrar as the holder of
      Notes at the close of business on each January 1, April 1, July 1 and October
      1
      immediately preceding each Additional Interest Payment Date.

     

    "Registration
      Delay Event"
      has the
      meaning set forth in Section 2(f) hereof.

     

    "Required
      Registration Amount"
      means
      the Initial Required Registration Amount and the Additional Required
      Registration Amount, as applicable.

     

    "Rule
      144"
      means
      Rule 144 under the 1933 Act (or any similar provision promulgated by the
      SEC).

     

    "Rule
      144A"
      means
      Rule 144A under the 1933 Act (or any successor provision promulgated by the
      SEC).

     

    "Rule
      144(k)"
      means
      Rule 144(k) under the 1933 Act (or any successor provision promulgated by the
      SEC).

     

    "Rule
      415"
      means
      Rule 415 under the 1933 Act (or any successor provision promulgated by the
      SEC).

     

    "SEC" means
      the
      Securities and Exchange Commission.

     

    "Securities
      Purchase Agreement"
      has the
      meaning set forth in the preamble of this Agreement.

     

    "Shelf
      Registration"
      means a
      registration effected pursuant to Section 2 hereof. 

     

    "Shelf
      Registration Period"
      has the
      meaning set forth in Section 2(d) hereof. 

     

    "Shelf
      Registration Statement"
      means
      the Initial Shelf Registration Statement and the Additional Shelf Registration
      Statement, as applicable. 

     

    "Suspension
      Period"
      has the
      meaning set forth in Section 2(e) hereof. 

     

    "Transfer
      Restricted Securities"
      means
      the Initial Transfer Restricted Securities and the Additional Transfer
      Restricted Securities, as applicable.

     

    "Trustee"
      means
      the trustee with respect to the Notes under the Indenture. 

     

    "Units"
      means
      the depositary units representing limited partner interests of the Company,
      as
      it exists on the date of this Agreement and any other equity capital or other
      securities of the Company into which such Units may be reclassified or changed,
      together with any and all other securities which may from time to time be
      issuable upon conversion of Notes.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

       

      
        All
          references in this Agreement to financial statements and schedules and
          other
          information which is "contained," "included" or "stated" in the Shelf
          Registration Statement, any preliminary Prospectus or Prospectus (and all
          other
          references of like import) shall be deemed to mean and include all such
          financial statements and schedules and other information incorporated or
          deemed
          to be incorporated by reference in such Shelf Registration Statement,
          preliminary Prospectus or Prospectus, as the case may be; and all references
          in
          this Agreement to amendments or supplements to the Shelf Registration Statement,
          any preliminary Prospectus or Prospectus shall be deemed to mean and include
          any
          document filed with the SEC under the 1934 Act, after the date of such
          Shelf
          Registration Statement, preliminary Prospectus or Prospectus, as the case
          may
          be, which is incorporated or deemed to be incorporated by reference therein.
          

         

        2.    Shelf
          Registration Statement.

         

        a.    The
          Company shall, at its expense, prepare and, as soon as practicable but
          in no
          event later than the Initial Filing Deadline, file with the SEC the Initial
          Shelf Registration Statement with respect to resales of the Initial Transfer
          Restricted Securities by the Holders from time to time on a delayed or
          continuous basis pursuant to Rule 415 and in accordance with the methods
          of
          distribution set forth in such Initial Shelf Registration Statement and
          thereafter shall use its reasonable best efforts to cause such Initial
          Shelf
          Registration Statement to be declared effective under the 1933 Act as soon
          as
          possible, but no later than the Initial Effectiveness Deadline. The Initial
          Shelf Registration Statement prepared pursuant hereto shall register for
          resale
          at least a number of Initial Transfer Restricted Securities equal to the
          Initial
          Required Registration Amount determined as of date the Initial Shelf
          Registration Statement is initially filed with the SEC. The Shelf Registration
          Statement shall contain the "Selling
          Securityholders"
          and
          "Plan
          of Distribution"
          sections in substantially the form attached hereto as Exhibit
          B.
          The
          Company shall supplement or amend the Initial Shelf Registration Statement
          if
          required by the rules, regulations or instructions applicable to the
          registration form used by the Company for the Initial Shelf Registration
          Statement, or by the 1933 Act, the 1934 Act or the SEC. By 9:30 a.m., New
          York
          City time, on the date following the Initial Effective Date, the Company
          shall
          file with the SEC in accordance with Rule 424 under the 1933 Act the final
          Prospectus to be used in connection with sales pursuant to such Initial
          Shelf
          Registration Statement.

         

        b.    The
          Company shall, at its expense, prepare and, as soon as practicable but
          in no
          event later than the Additional Filing Deadline, file with the SEC the
          Additional Shelf Registration Statement with respect to resales of the
          Additional Transfer Restricted Securities by the Holders from time to time
          on a
          delayed or continuous basis pursuant to Rule 415 and in accordance with
          the
          methods of distribution set forth in such Additional Shelf Registration
          Statement and thereafter shall use its reasonable best efforts to cause
          such
          Additional Shelf Registration Statement to be declared effective under
          the 1933
          Act as soon as possible, but no later than the Additional Effectiveness
          Deadline. The Additional Registration Statement

          
            
              
              

            

            
              -7-

              
                

              

            

            
              
              

            

          



        prepared
          pursuant hereto shall register for resale at least a number of Additional
          Transfer Restricted Securities equal to the Additional Required Registration
          Amount determined as of date the Additional Shelf Registration Statement
          is
          initially filed with the SEC. To the extent the all of the Transfer Restricted
          Securities have not been registered on an effective Shelf Registration
          Statement, the Company shall file Additional Shelf Registration Statements
          successively trying to register on each such Additional Registration Statement
          the maximum number of remaining Additional Registrable Securities until
          all of
          the Transfer Restricted Securities have been registered with the SEC. The
          Shelf
          Registration Statement shall contain the "Selling
          Securityholders"
          and
          "Plan
          of Distribution"
          sections in substantially the form attached hereto as Exhibit
          B.
          The
          Company shall supplement or amend the Additional Shelf Registration Statement
          if
          required by the rules, regulations or instructions applicable to the
          registration form used by the Company for the Additional Shelf Registration
          Statement, or by the 1933 Act, the 1934 Act or the SEC. By 9:30 a.m., New
          York
          City time, on the date following the Additional Effective Date, the Company
          shall file with the SEC in accordance with Rule 424 under the 1933 Act
          the final
          Prospectus to be used in connection with sales pursuant to such Additional
          Shelf
          Registration Statement.

         

        c.    (i)    The
          Company shall name each Holder that delivers a properly completed and signed
          Notice and Questionnaire to the Company as a selling security holder in
          the
          Shelf Registration Statement. A Holder of Transfer Restricted Securities
          may
          include such securities in the Shelf Registration Statement only if the
          Holder
          sends by first-class registered mail or by courier with delivery confirmation,
          a
          properly completed Notice and Questionnaire to the Company. In order to
          be
          included in the Shelf Registration Statement at the time of its effectiveness,
          a
          Buyer must deliver to the Company its properly completed Notice and
          Questionnaire on or prior to the 20th Business Day of the Initial Closing
          Date
          (or, in the case of a Holder that is a transferee of Transfer Restricted
          Securities, on or prior to the earlier of (x) the fifth Business Day after
          the
          completion of the transfer of Transfer Restricted Securities to the transferee
          and (y) 9:00 a.m., New York time, on the fifth Business Day prior to
          effectiveness of the Shelf Registration Statement) (in any case, the
          "Questionnaire
          Deadline").
          The
          Company agrees and undertakes that it shall distribute a Notice and
          Questionnaire (A) no later than 20 Business Days prior to the expected
          effectiveness of each Shelf Registration Statement other than the Initial
          Shelf
          Registration Statement to each Holder in accordance with Section 6(c) hereof,
          and (B) in the case of a Holder that is a transferee of Transfer Restricted
          Securities upon the request of such transferee Holder given in accordance
          with
          Section 6(c) hereof, to such Holder at the address set forth in such
          request.

         

        (ii)    Following
          the effectiveness of the Shelf Registration Statement, upon receipt of
          a
          completed Notice and Questionnaire from a Holder, the Company will, as
          promptly
          as practicable, but in any event within five (5) Business Days after its
          receipt
          thereof, file any amendments to the Shelf Registration Statement or supplements
          to the related Prospectus as are necessary to permit the Holder to deliver
          the
          Prospectus to purchasers of Transfer Restricted Securities (subject to
          the right
          of the Company to suspend the use of the Prospectus as described in Section
          2(e)
          hereof). The Company shall use its reasonable best efforts to cause any
          such
          post-effective amendment to become effective under the 1933 Act as promptly
          as
          is practicable; provided, that if a Notice and Questionnaire is delivered
          to the
          Company during a Suspension Period, the Company shall not be obligated
          to amend
          the Shelf

          
            
              
              

            

            
              -8-

              
                

              

            

            
              
              

            

          



        Registration
          Statement or supplement the Prospectus until the termination of such Suspension
          Period.

         

        (iii)    Each
          Holder as to which the Shelf Registration Statement is being effected agrees
          to
          furnish promptly to the Company upon reasonable request (x) such other
          information as the Company may reasonably request for use in connection
          with the
          Shelf Registration Statement or Prospectus or in any application to be
          filed
          with or under state securities laws and (y) all information required to
          be
          disclosed in order to make the information previously furnished to the
          Company
          by such Holder not misleading.

         

        d.    The
          Company shall use its reasonable best efforts to keep the applicable Shelf
          Registration Statement continuously effective, supplemented and amended
          under
          the 1933 Act in order to permit the Prospectus forming a part thereof to
          be
          usable, subject to Section 2(e) hereof, by all Notice Holders until the
          earliest
          to occur of: (i) the last date on which the holding period applicable to
          sales
          of all applicable Transfer Restricted Securities under Rule 144(k) has
          expired;
          (ii) the date as of which all applicable Transfer Restricted Securities
          have
          been transferred under Rule 144; and (iii) such date as of which all applicable
          Transfer Restricted Securities have been sold pursuant to the applicable
          Shelf
          Registration Statement (in any such case, such period being called the
          "Shelf
          Registration Period").
          The
          Company will, in order to fulfill its obligations and this Section 2(d):
          (x)
          subject to Section 2(e), prepare and file with the SEC such amendments
          and
          post-effective amendments to the Shelf Registration Statement as may be
          necessary to keep the Shelf Registration Statement continuously effective
          for
          the Shelf Registration Period; (y) subject to Section 2(e), cause the related
          Prospectus to be supplemented by any required supplement, and as so supplemented
          to be filed pursuant to Rule 424 (or any similar provisions then in force)
          under
          the 1933 Act; and (z) comply in all material respects with the provisions
          of the
          1933 Act with respect to the disposition of all Transfer Restricted Securities
          covered by the Shelf Registration Statement during the Shelf Registration
          Period. 

         

        e.    The
          Company may suspend the availability of any Shelf Registration Statement
          and the
          use of any Prospectus, delay the filing of any Shelf Registration Statement
          or
          delay the effectiveness of any Shelf Registration Statement (the period
          during
          which the availability of any Shelf Registration Statement and any Prospectus
          may be suspended and the filing or effectiveness may be delayed herein
          referred
          to as the "Suspension
          Period"),
          without incurring any obligation to pay Additional Interest pursuant to
          Section
          2(f) for a period not to exceed 60 days in the aggregate during any 12-month
          period, in each case only for valid business reasons, to be determined
          in good
          faith by the Company in its reasonable judgment (which shall not include
          the
          avoidance of the Company's obligations hereunder), including, without
          limitation, the acquisition or divestiture of assets, pending corporate
          developments, public filings with the SEC and similar events; provided,
          that the
          Company promptly thereafter complies with the requirements of Section 3(j)
          hereof, if applicable. The first day of any Suspension Period must be at
          least
          five (5) trading days after the last day of any prior Suspension
          Period.

         

        f.    The
          Company and the Buyers agree that the Holders of Transfer Restricted Securities
          will suffer damages, and it would not be feasible to ascertain the extent
          of
          such damages with precision, if the Company fails to fulfill its obligations
          under Section 2 hereof. Accordingly, if: (i) the Shelf Registration Statement
          covering all the Transfer Restricted

          
            
              
              

            

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

         

        g.    All
          of
          the Company's obligations (including, without limitation, the obligation
          to pay
          Additional Interest) set forth in the preceding paragraph which are outstanding
          or exist with respect to any Transfer Restricted Security at the time such
          security ceases to be a Transfer Restricted Security shall survive until
          such
          time as all such obligations with respect to such security shall have been
          satisfied in full. Notwithstanding the foregoing, no Additional Interest
          shall
          accrue as to any Transfer Restricted Security from and after the earlier
          of: (i)
          the date such security is no longer a Transfer Restricted Security; and
          (ii) the
          expiration of the Shelf Registration Period.

          
            
              
              

            

            
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        h.    Immediately
          upon the occurrence or the termination of a Registration Delay Event, the
          Company shall give the Trustee, so long as the Notes remain outstanding,
          notice
          of such commencement or termination of the obligation to pay Additional
          Interest
          with regard to the Notes, and the amount thereof and of the nature of the
          default giving rise to such commencement or the event giving rise to such
          termination, as the case may be (such notice to be contained in an Officer's
          Certificate (as such term is defined in the Indenture)), and prior to receipt
          of
          such Officer's Certificate the Trustee and the transfer and paying agent
          shall
          be entitled to assume that no such commencement or termination has occurred,
          as
          the case may be.

         

        3.    Registration
          Procedures.

         

        In
          connection with any Shelf Registration Statement, the following provisions
          shall
          apply:

         

        a.    The
          Company shall: (i) furnish to the Buyers, within a reasonable period of
          time,
          but in any event within five (5) Business Days, prior to the filing thereof
          with
          the SEC to afford the Buyers and their counsel a reasonable opportunity
          for
          review, a copy of each Shelf Registration Statement, and each amendment
          thereof,
          and a copy of each Prospectus, and each amendment or supplement thereto
          (excluding amendments caused by the filing of a report under the 1934 Act),
          and
          shall reflect in each such document, when so filed with the SEC, such comments
          as the Buyers may reasonably propose therein; and (ii) include information
          regarding the Notice Holders and the methods of distribution they have
          elected
          for their Transfer Restricted Securities provided to the Company in Notice
          and
          Questionnaires as necessary to permit such distribution by the methods
          specified
          therein.

         

        b.    Subject
          to Section 2(e), the Company shall ensure that: (i) any Shelf Registration
          Statement and any amendment thereto and any Prospectus forming a part thereof
          and any amendment or supplement thereto comply in all material respects
          with the
          1933 Act and the rules and regulations thereunder; (ii) any Shelf Registration
          Statement and any amendment thereto does not, when it becomes effective,
          contain
          an untrue statement of a material fact or omit to state a material fact
          required
          to be stated therein or necessary to make the statements therein not misleading;
          and (iii) any Prospectus forming a part of any Shelf Registration Statement,
          and
          any amendment or supplement to such Prospectus, does not include an untrue
          statement of a material fact or omit to state a material fact necessary
          in order
          to make the statements therein, in the light of the circumstances under
          which
          they were made, not misleading; provided that the Company makes no
          representation with respect to any Holder Information. 

         

        c.    The
          Company, as promptly as reasonably practicable (but in any event within
          two
          Business Days), shall notify the Buyers and each Notice Holder: 

         

        (i)    when
          any
          Prospectus or any supplement thereto has been filed with the SEC and when
          the
          Shelf Registration Statement or any post-effective amendment thereto has
          become
          effective;

         

        (ii)    of
          the
          issuance by the SEC or any other federal or state governmental authority
          of any
          stop order suspending the effectiveness of the Shelf Registration

          
            
              
              

            

            
              -11-

              
                

              

            

            
              
              

            

          



        Statement
          or of any order preventing or suspending the use of any Prospectus or the
          initiation or threat of any proceedings for that purpose; 

         

        (iii)    of
          the
          receipt by the Company of any notification with respect to the suspension
          of the
          qualification or exemption from qualification of the Transfer Restricted
          Securities included in any Shelf Registration Statement for sale in any
          jurisdiction or the initiation or threat of any proceeding for that purpose;
          

         

        (iv)    of
          the
          occurrence of, but not the nature of or details concerning, any event or
          the
          existence of any condition that requires the making of any changes in the
          Shelf
          Registration Statement or the Prospectus or any document incorporated by
          reference therein so that, as of such date, the statements therein are
          not
          misleading and the Shelf Registration Statement or the Prospectus or any
          document incorporated by reference therein, as the case may be, does not
          include
          an untrue statement of a material fact or omit to state a material fact
          required
          to be stated therein or necessary to make the statements therein (in the
          case of
          the Prospectus, in the light of the circumstances under which they were
          made)
          not misleading;

         

        (v)    of
          the
          Company's determination that a post-effective amendment to the Shelf
          Registration Statement is necessary (other than a post-effective amendment
          pursuant to Section 2(c)(ii)); and

         

        (vi)    of
          the
          commencement (including as a result of any of the events or circumstances
          described in paragraph (ii) above) and termination of any Suspension Period.
          

         

        d.    The
          Company shall use its reasonable best efforts to obtain: (i) the withdrawal
          of
          any order suspending the effectiveness of any Shelf Registration Statement
          and
          the use of any related Prospectus; and (ii) the lifting of any suspension
          of the
          qualification (or exemption from qualification) of any of the Transfer
          Restricted Securities for offer or sale in any jurisdiction in which they
          have
          been qualified for sale, in each case at the earliest possible time, and
          shall
          provide notice to each Notice Holder and the Buyers of the withdrawal of
          any
          such orders or suspensions.

         

        e.    The
          Company shall promptly furnish to the Buyers (and, upon written request
          from any
          Notice Holder to such Notice Holder), without charge, (i) at least one
          copy of
          any Shelf Registration Statement and any post-effective amendment thereto,
          excluding all documents incorporated or deemed to be incorporated therein
          by
          reference and all exhibits thereto, (ii) copies of any correspondence from
          the
          SEC or the staff of the SEC to the Company or its representatives relating
          to
          any Shelf Registration Statement, (iii) promptly after the same is prepared
          and
          filed with the SEC, one copy of any Shelf Registration Statement and any
          amendment(s) thereto, including financial statements and schedules, all
          documents incorporated therein by reference, if requested by an Investor,
          and
          all exhibits and (iv) upon the effectiveness of any Shelf Registration
          Statement, one copy of the prospectus included in such Registration Statement
          and all amendments and supplements thereto.

         

        f.    The
          Company shall, during the Shelf Registration Period, promptly deliver to
          the
          Buyers and each Notice Holder, without charge, as many copies of the
          Prospectus

          
            
              
              

            

            
              -12-

              
                

              

            

            
              
              

            

          



        (including
          each preliminary Prospectus) included in any Shelf Registration Statement,
          and
          any amendment or supplement thereto, as such person may reasonably request
          and
          except as provided in Sections 2(e) and 3(p) hereof; and the Company hereby
          consents to the use of the Prospectus and any amendment or supplement thereto
          by
          each of the selling Holders in connection with the offering and sale of
          the
          Transfer Restricted Securities covered by the Prospectus or any amendment
          or
          supplement thereto. 

         

        g.    The
          Company shall submit to the SEC, within five (5) Business Days (subject
          to any
          Suspension Period pursuant to Section 2(e) hereof) after the Company learns
          that
          no review of a particular Shelf Registration Statement will be made by
          the staff
          of the SEC or that the staff has no further comments on a particular Shelf
          Registration Statement, as the case may be, a request for acceleration
          of
          effectiveness of such Shelf Registration Statement to a time and date not
          later
          than 48 hours after the submission of such request.

         

        h.    Prior
          to
          any offering of Transfer Restricted Securities pursuant to any Shelf
          Registration Statement, the Company shall register or qualify or cooperate
          with
          the Notice Holders and their respective counsel in connection with the
          registration or qualification (or exemption from such registration or
          qualification) of such Transfer Restricted Securities for offer and sale,
          under
          the securities or blue sky laws of such jurisdictions within the United
          States
          as any such Notice Holders reasonably request and shall maintain such
          qualification in effect so long as required and do any and all other acts
          or
          things necessary or advisable to enable the offer and sale in such jurisdictions
          of the Transfer Restricted Securities covered by such Shelf Registration
          Statement; provided, however, that the Company will not be required to:
          (i)
          qualify generally to do business as a foreign corporation or as a dealer
          in
          securities in any jurisdiction where it is not then so qualified or; (ii)
          take
          any action which would subject it to service of process or taxation in
          excess of
          a nominal dollar amount in any such jurisdiction where it is not then so
          subject.

         

        i.    If
          the
          Transfer Restricted Securities are in certificated form, the Company shall
          cooperate with the Holders to facilitate the timely preparation and delivery
          of
          certificates representing Transfer Restricted Securities sold pursuant
          to any
          Shelf Registration Statement free of any restrictive legends and, with
          respect
          of any Notes, in such denominations permitted by the Indenture and registered
          in
          such names as Holders may request at least two (2) Business Days prior
          to
          settlement of sales of Transfer Restricted Securities pursuant to such
          Shelf
          Registration Statement.

         

        j.    Subject
          to the exceptions contained in (i) and (ii) of Section 3(h) above, the
          Company
          shall use its reasonable best efforts to cause the Transfer Restricted
          Securities covered by the applicable Shelf Registration Statement to be
          registered with or approved by such other federal, state and local governmental
          agencies or authorities, and self-regulatory organizations in the United
          States
          as may be necessary to enable the Holders to consummate the disposition
          of such
          Transfer Restricted Securities as contemplated by the Shelf Registration
          Statement; without limitation to the foregoing, the Company shall provide
          all
          such information as may be required by the NASD in connection with the
          offering
          under the Shelf Registration Statement of the Transfer Restricted Securities
          (including, without limitation, such as may be required by NASD Rule 2710
          or
          2720), and shall cooperate with each Holder in connection with any filings
          required to be made with the NASD by such Holder in that regard. 

          
            
              
              

            

            
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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

          
            
              
              

            

            
              -14-

              
                

              

            

            
              
              

            

          



        accountants
          in connection with such disposition, in each case as is customary for similar
          "due diligence" examinations; provided, however, that such Persons shall
          enter
          into a confidentiality agreement reasonably acceptable to the
          Company.

         

        p.    Each
          Notice Holder agrees that, upon receipt of notice of the happening of an
          event
          described in Sections 3(c)(ii) through and including 3(c)(vi), it shall
          forthwith discontinue (and shall cause its agents and representatives to
          discontinue) disposition of Transfer Restricted Securities and will not
          resume
          disposition of Transfer Restricted Securities until such Holder has received
          copies of an amended or supplemented Prospectus contemplated by Section
          3(k)
          hereof, or until such Notice Holder is advised in writing by the Company
          that
          the use of the Prospectus may be resumed or that the relevant Suspension
          Period
          has been terminated, as the case may be, provided that the foregoing shall
          not
          prevent the sale, transfer or other disposition of Transfer Restricted
          Securities by a Holder in a transaction which is exempt from, or not subject
          to,
          the registration requirements of the 1933 Act, so long as such Holder does
          not
          and is not required to deliver the applicable Prospectus or Shelf Registration
          Statement in connection with such sale, transfer or other disposition,
          as the
          case may be; and provided, further, that the provisions of this Section
          3(q)
          shall not prevent the occurrence of a Registration Delay Event or otherwise
          limit the obligation of the Company to pay Additional Interest. 

         

        q.    The
          Company shall use its reasonable best efforts to take all other steps necessary
          to effect the registration of the Transfer Restricted Securities covered
          by the
          Shelf Registration Statement contemplated hereby.

         

        4.    Registration
          Expenses.

         

        The
          Company shall bear all fees and expenses incurred in connection with the
          performance of its obligations under Sections 2 and 3 hereof and shall
          reimburse
          the Holders for the reasonable fees and disbursements of the Legal Counsel
          in an
          amount not to exceed $10,000. Such fees and expenses shall include, without
          limitation: (i) all registration and filing fees and expenses; (ii) all
          fees and
          expenses of compliance with federal securities and state Blue Sky or securities
          laws; (iii) all expenses of printing (including printing of Prospectuses
          and
          certificates for the Units to be issued upon conversion of the Notes) and
          the
          Company's expenses for messenger and delivery services and telephone; (iv)
          all
          fees and disbursements of counsel to the Company; (v) all application and
          filing
          fees in connection with listing (or authorizing for quotation) the Units
          on a
          national securities exchange or automated quotation system pursuant to
          the
          requirements hereof; and (vi) all fees and disbursements of independent
          certified public accountants of the Company. The Company shall bear its
          internal
          expenses (including, without limitation, all salaries and expenses of its
          officers and employees performing legal, accounting or other duties), the
          expenses of any annual audit and the fees and expenses of any Person, including
          special experts, retained by the Company. Notwithstanding the provisions
          of this
          Section 4, each Holder shall bear the expense of any broker's commission,
          agency
          fee and underwriter's discount or commission, if any, relating to the sale
          or
          disposition of such Holder's Transfer Restricted Securities pursuant to
          a Shelf
          Registration Statement.

          
            
              
              

            

            
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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

          
            
              
              

            

            
              -16-

              
                

              

            

            
              
              

            

          



        Registration
          Statement. This indemnity agreement will be in addition to any liability
          that
          such Holder may otherwise have.

         

        c.    Promptly
          after receipt by an indemnified party under this Section 5 of notice of
          any
          claim or the commencement of any action or proceeding (including any
          governmental investigation), such indemnified party will, if a claim for
          indemnification in respect thereof is to be made against the indemnifying
          party
          under Section 5(a) or 5(b) hereof, notify the indemnifying party in writing
          of
          the commencement thereof; but the omission so to notify the indemnifying
          party
          will not relieve it from any liability which it may have to any indemnified
          party to the extent it is not materially prejudiced as a result thereof
          and in
          any event shall not relieve it from any liability which it may have otherwise
          than on account of this indemnity agreement. In case any such action or
          proceeding is brought against any indemnified party, and it notifies the
          indemnifying party of the commencement thereof, the indemnifying party
          will be
          entitled to participate therein (jointly with any other indemnifying party
          similarly notified), and to the extent that it may elect, by written notice,
          delivered to such indemnified party promptly after receiving the aforesaid
          notice from such indemnified party, to assume the defense thereof, with
          counsel
          reasonably satisfactory to such indemnified party; provided, however, that
          if
          the defendants (including any impleaded parties) in any such action include
          both
          the indemnified party and the indemnifying party and the indemnified party
          shall
          have reasonably concluded that there may be legal defenses available to
          it
          and/or other indemnified parties which are different from or additional
          to those
          available to the indemnifying party, the indemnified party or parties shall
          have
          the right to select separate counsel to defend such action on behalf of
          such
          indemnified party or parties. Upon receipt of notice from the indemnifying
          party
          to such indemnified party of its election so to appoint counsel to defend
          such
          action and approval by the indemnified party of such counsel, the indemnifying
          party will not be liable to such indemnified party under this Section 5
          for any
          legal or other expenses subsequently incurred by such indemnified party
          in
          connection with the defense thereof unless: (i) the indemnified party shall
          have
          employed separate counsel in accordance with the proviso to the preceding
          sentence (it being understood, however, that the indemnifying party shall
          not be
          liable for the expense of more than one separate counsel (in addition to
          any
          local counsel), approved by the Holders in the case of paragraph (a) of
          this
          Section 5, representing the indemnified parties under such paragraph (a)
          who are
          parties to such action); (ii) the indemnifying party shall not have employed
          counsel reasonably satisfactory to the indemnified party to represent the
          indemnified party within a reasonable time after notice or commencement
          of the
          action; (iii) the indemnifying party has authorized the employment of counsel
          for the indemnified party at the expense of the indemnifying party; or
          (iv) the
          use of counsel chosen by the indemnifying party to represent the indemnified
          party would present such counsel with a conflict of interest. An indemnifying
          party will not, without the prior written consent of the indemnified parties,
          settle or compromise or consent to the entry of any judgment with respect
          to any
          pending or threatened claim, action, suit or proceeding in respect of which
          indemnification or contribution may be sought hereunder (whether or not
          the
          indemnified parties are actual or potential parties to such claim or action)
          unless such settlement, compromise or consent includes an unconditional
          release
          of each indemnified party from all liability arising out of such claim,
          action,
          suit or proceeding. Subject to the provisions of the immediately following
          sentence, no indemnifying party shall be liable for any settlement, compromise
          or the consent to the entry of judgment in connection with any such action
          effected without its written consent (which consent shall not be unreasonably
          withheld or delayed), but if settled with its written consent or if there
          be a
          final judgment for the

          
            
              
              

            

            
              -17-

              
                

              

            

            
              
              

            

          



        plaintiff
          in any such action other than a judgment entered with the consent of such
          indemnified party, the indemnifying party agrees to indemnify and hold
          harmless
          any indemnified party from and against any loss or liability by reason
          of such
          settlement or judgment. 

         

        d.    In
          the
          event that the indemnity provided in paragraph (a) or (b) of this Section
          5 is
          unavailable to or insufficient to hold harmless an indemnified party for
          any
          reason, each indemnifying party agrees to contribute to the aggregate losses,
          claims, damages and liabilities (including legal or other expenses reasonably
          incurred in connection with investigating or defending same) (collectively,
          "Losses")
          to
          which the indemnified party may be subject in such proportion as is appropriate
          to reflect the relative benefits received by the Company from the sale
          of the
          Notes, on the one hand, and a Holder with respect to the sale by such Holder
          of
          Transfer Restricted Securities, on the other hand; provided, however, that
          in no
          case shall an indemnifying party that is a Holder be responsible for any
          amount
          in excess of the total price at which the Transfer Restricted Securities
          are
          sold by such Holder to a purchaser. If the allocation provided by the
          immediately preceding sentence is unavailable for any reason, the Company
          and
          such Holder shall contribute in such proportion as is appropriate to reflect
          not
          only such relative benefits but also the relative fault of the Company
          on the
          one hand and of such Holder on the other in connection with the statements
          or
          omissions which resulted in such Losses, as well as any other relevant
          equitable
          considerations. The relative benefits received by the Company on the one
          hand
          and such Holder on the other shall be deemed to be in the same respective
          proportions as the total net proceeds from the sale of the Notes (before
          deducting expenses) received by or on behalf of the Company, on the one
          hand,
          and the total proceeds received by such Holder with respect to its sale
          of
          Transfer Restricted Securities under the Shelf Registration Statement,
          on the
          other hand, bear to the total gross proceeds from the sale of the Notes.
          Relative fault shall be determined by reference to, among other things,
          whether
          any untrue or any alleged untrue statement of a material fact or the omission
          or
          alleged omission to state a material fact relates to information provided
          by the
          Company on the one hand or relates to Holder Information supplied by such
          Holder, on the other, the intent of the parties and their relative knowledge,
          information and opportunity to correct or prevent such untrue statement
          or
          omission. The parties agree that it would not be just and equitable if
          contribution pursuant to this paragraph (d) were determined by pro rata
          allocation or any other method of allocation that does not take account
          of the
          equitable considerations referred to above. Notwithstanding the provisions
          of
          this paragraph (d), no Person guilty of fraudulent misrepresentation (within
          the
          meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
          from
          any Person who was not guilty of such fraudulent misrepresentation. For
          purposes
          of this Section 5(d), each Person who controls a Holder within the meaning
          of
          either the 1933 Act or the 1934 Act shall have the same rights to contribution
          as such Holder, and each Person who controls the Company within the meaning
          of
          either the 1933 Act or the 1934 Act shall have the same rights to contribution
          as the Company, subject in each case to the applicable terms and conditions
          of
          this paragraph (d).

         

        e.    The
          provisions of this Section 5 will remain in full force and effect, regardless
          of
          any investigation made by or on behalf of any Holder, any underwriter or
          the
          Company or any of the officers, directors or controlling Persons referred
          to in
          Section 5 hereof, and will survive the sale by a Holder of Transfer Restricted
          Securities covered by a Shelf Registration Statement.

          
            
              
              

            

            
              -18-

              
                

              

            

            
              
              

            

          



        f.    Rules
          144 and 144A.
          The
          Company covenants that it shall use its reasonable best efforts to file
          the
          reports required to be filed by it under the 1933 Act and the 1934 Act
          in a
          timely manner so long as the Transfer Restricted Securities remain outstanding.
          If at any time the Company is not required to file such reports, it will,
          upon
          request of any Holder or beneficial owner of Transfer Restricted Securities,
          make available the information specified in Rule 144A(d)(4). The Company
          further
          covenants that, for as long as any Transfer Restricted Securities remain
          outstanding, it will take such further action as any Holder of Transfer
          Restricted Securities may reasonably request, all to the extent required
          from
          time to time to enable such Holder to sell Transfer Restricted Securities
          without registration under the 1933 Act within the limitation of the exemptions
          provided by Rule 144 and Rule 144A. Upon the written request of any Holder
          of
          Transfer Restricted Securities, the Company shall deliver to such Holder
          a
          written statement as to whether it has complied with such
          requirements.

         

        6.    Miscellaneous.

         

        a.    No
          Inconsistent Agreements.
          The
          Company has not, as of the date hereof, entered into nor shall it, on or
          after
          the date hereof, enter into, any agreement with respect to its securities
          that
          is inconsistent with the rights granted to the Holders herein or otherwise
          conflicts with the provisions hereof. In addition, the Company shall not
          grant
          to any of its Noteholders (other than the Holders of Transfer Restricted
          Securities in such capacity) the right to include any of its securities
          in the
          Shelf Registration Statement provided for in this Agreement other than
          the
          Transfer Restricted Securities. 

         

        b.    Amendments
          and Waivers.
          The
          provisions of this Agreement, including the provisions of this sentence,
          may not
          be amended, qualified, modified or supplemented, and waivers or consents
          to
          departures from the provisions hereof may not be given, unless the Company
          consents in writing and the Company has obtained the written consent of
          at least
          the Majority Holders. Notwithstanding the foregoing, a waiver or consent
          to
          departure from the provisions hereof with respect to a matter that relates
          exclusively to the rights of Holders whose Transfer Restricted Securities
          are
          being sold pursuant to a Shelf Registration Statement and that does not
          directly
          or indirectly affect the rights of other Holders may be given by the Majority
          Holders.

         

        c.    Notices.
          All
          notices and other communications provided for or permitted hereunder shall
          be
          made in writing by hand-delivery, first-class mail, telecopier, or air
          courier
          guaranteeing overnight delivery:

         

        (i)    if
          to the
          Buyers, initially at their address set forth in the Securities Purchase
          Agreement;

         

        (ii)    if
          to any
          other Holder, at the most current address of such Holder maintained by
          the
          Registrar under the Indenture or the registrar of the Units (provided that
          while
          the Notes or the Units are in book-entry form, notice to the Trustee shall
          serve
          as notice to the Holders), or, in the case of the Notice Holder, the address
          set
          forth in its Notice and Questionnaire;

         

        (iii)    if
          to the
          Company, to:

        
          
            
            

          

          
            -19-

            
              

            

          

          
            
            

          

        

         

        American
          Real Estate Partners, L.P.

        767
          Fifth
          Avenue

        New
          York,
          New York 10153

        Telephone:
          (914)
          614-7077

        Facsimile:
          (646)
          365-2833

        Email:
          fbuebel@arep.com

        Attention:
          Felicia
          Buebel

         

        With
          a
          copy to:

         

        Proskauer
          Rose LLP

        1585
          Broadway

        New
          York,
          New York 10036-8299

        Telephone:
          (212) 969-3580

        Facsimile:
          (212) 969-2900

        Email:
          iblumenstein@proskauer.com

        Attention:
          Ian B. Blumenstein

         

        (iv)    if
          to
          Legal Counsel, to:

         

        Schulte
          Roth & Zabel LLP

        919
          Third
          Avenue

        New
          York,
          New York 10022

        Telephone:
          (212)
          756-2000

        Facsimile:
          (212)
          593-5955

        Email:
          eleazer.klein@srz.com

        Attention:
          Eleazer
          N. Klein, Esq.

        


        All
          such
          notices and communications shall be deemed to have been duly given when
          received, if delivered by hand or air courier, and when sent, if sent by
          first-class mail or telecopier.

         

        The
          Buyers or the Company by notice to the other may designate additional or
          different addresses for subsequent notices or communications. 

         

        d.    Successors
          and Assigns.
          This
          Agreement shall inure to the benefit of and be binding upon the successors
          and
          assigns of each of the parties, including, without the need for an express
          assignment or any consent by the Company thereto, subsequent Holders. The
          Company hereby agrees to extend the benefits of this Agreement to any Holder
          and
          any such Holder may specifically enforce the provisions of this Agreement
          as if
          an original party hereto. In the event that any other Person shall succeed
          to
          the Company under the Indenture, then such successor shall enter into an
          agreement, in form and substance reasonably satisfactory to the Buyers,
          whereby
          such successor shall assume all of the Company's obligations under this
          Agreement. 

          
            
              
              

            

            
              -20-

              
                

              

            

            
              
              

            

          



        e.    Counterparts.
          This
          Agreement may be executed in any number of counterparts and by the parties
          hereto in separate counterparts, each of which when so executed shall be
          deemed
          to be an original and all of which taken together shall constitute one
          and the
          same agreement.

         

        f.    Headings.
          The
          headings in this Agreement are for convenience of reference only and shall
          not
          limit or otherwise affect the meaning hereof. 

         

        g.    Governing
          Law.
          All
          questions concerning the construction, validity, enforcement and interpretation
          of this Agreement shall be governed by the internal laws of the State of
          New
          York, without giving effect to any choice of law or conflict of law provision
          or
          rule (whether of the State of New York or any other jurisdictions) that
          would
          cause the application of the laws of any jurisdictions other than the State
          of
          New York. Each party hereby irrevocably submits to the exclusive jurisdiction
          of
          the state and federal courts sitting in The City of New York, Borough of
          Manhattan, for the adjudication of any dispute hereunder or in connection
          herewith or with any transaction contemplated hereby or discussed herein,
          and
          hereby irrevocably waives, and agrees not to assert in any suit, action
          or
          proceeding, any claim that it is not personally subject to the jurisdiction
          of
          any such court, that such suit, action or proceeding is brought in an
          inconvenient forum or that the venue of such suit, action or proceeding
          is
          improper. Each party hereby irrevocably waives personal service of process
          and
          consents to process being served in any such suit, action or proceeding
          by
          mailing a copy thereof to such party at the address for such notices to
          it under
          this Agreement and agrees that such service shall constitute good and sufficient
          service of process and notice thereof. Nothing contained herein shall be
          deemed
          to limit in any way any right to serve process in any manner permitted
          by law.
          If any provision of this Agreement shall be invalid or unenforceable in
          any
          jurisdiction, such invalidity or unenforceability shall not affect the
          validity
          or enforceability of the remainder of this Agreement in that jurisdiction
          or the
          validity or enforceability of any provision of this Agreement in any other
          jurisdiction. EACH
          PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
          REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
          IN
          CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
          CONTEMPLATED HEREBY.

         

        h.    Severability.
          In the
          event that any one of more of the provisions contained herein, or the
          application thereof in any circumstances, is held invalid, illegal or
          unenforceable in any respect for any reason, the validity, legality and
          enforceability of any such provision in every other respect and of the
          remaining
          provisions hereof shall not be in any way impaired or affected thereby,
          it being
          intended that all of the rights and privileges of the parties shall be
          enforceable to the fullest extent permitted by law. 

         

        i.    Notes
          Held by the Company, Etc.
          Whenever the consent or approval of Holders of a specified percentage of
          principal amount of Notes or the Units issuable upon conversion thereof
          is
          required hereunder, Notes or the Units issued upon conversion thereof held
          by
          the Company or its Affiliates (other than subsequent Holders of Notes or
          the
          Units issued upon conversion thereof if such subsequent Holders are deemed
          to be
          Affiliates solely by reason of their holdings of such Notes) shall not
          be
          counted in determining whether such consent or approval was given by the
          Holders
          of such required percentage.

          
            
              
              

            

            
              -21-

              
                

              

            

            
              
              

            

          



        j.    Termination.
          This
          Agreement and the obligations of the parties hereunder shall terminate
          upon the
          end of the Shelf Registration Period, except for any liabilities or obligations
          under Section 2(f), 4 or 5.

         

        k.    Independent
          Nature of Buyers' Obligations and Rights.
          The
          obligations of each Buyer under any Transaction Document are several and
          not
          joint with the obligations of any other Buyer, and no Buyer shall be responsible
          in any way for the performance of the obligations of any other Buyer under
          any
          Transaction Document. Nothing contained herein or in any other Transaction
          Document, and no action taken by any Buyer pursuant hereto or thereto,
          shall be
          deemed to constitute the Buyers as a partnership, an association, a joint
          venture or any other kind of entity, or create a presumption that the Buyers
          are
          in any way acting in concert or as a group with respect to such obligations
          or
          the transactions contemplated by the Transaction Documents. Each Buyer
          confirms
          that it has independently participated in the negotiation of the transaction
          contemplated hereby with the advice of its own counsel and advisors. Except
          to
          the extent otherwise provided in the Transaction Documents, each Buyer
          shall be
          entitled to independently protect and enforce its rights, including, without
          limitation, the rights arising out of this Agreement or out of any other
          Transaction Documents, and it shall not be necessary for any other Buyer
          to be
          joined as an additional party in any proceeding for such purpose.

        
          
            
            

          

          
            -22-

            
              

            

          

          
            
            

          

           

        

        IN
          WITNESS WHEREOF,
          each
          Buyer and the Company have caused their respective signature page to this
          Registration Rights Agreement to be duly executed as of the date first
          written
          above.

         

        
          	 	
                  COMPANY:

                
	 	 
	 	
                  AMERICAN
                    REAL ESTATE PARTNERS, L.P.

                
	 	
                   

                  By:
                    American Property Investors, Inc.,

                  its
                    general partner

                
	 	 
	 	 
	 	
                  By: 
                    __________________________________

                  Name:

                  Title:    

                
	 	 


        

        

          
            
              
              

            

            
              -23-

              
                

              

            

            
              
              

            

          

        

         

        IN
          WITNESS WHEREOF,
          each
          Buyer and the Company have caused their respective signature page to this
          Registration Rights Agreement to be duly executed as of the date first
          written
          above.

         

        


        
          	 	
                  BUYERS:

                
	 	 
	 	
                  PORTSIDE
                    GROWTH AND OPPORTUNITY FUND

                
	 	 
	 	 
	 	
                  By: 
                    __________________________________

                  Name:

                  Title: 

                
	 	 


        

         

        
          
            
            

          

          
            -24-

            
              

            

          

          
            
            

          

           

        

        IN
          WITNESS WHEREOF,
          each
          Buyer and the Company have caused their respective signature page to this
          Registration Rights Agreement to be duly executed as of the date first
          written
          above.

         

        
          	 	
                  BUYERS:

                
	 	 
	 	
                  HIGHBRIDGE
                    INTERNATIONAL LLC

                
	 	 
	 	
                  By:
                    HIGHBRIDGE CAPITAL MANAGEMENT, LLC

                
	 	 
	 	 
	 	
                  By: 
                    __________________________________

                  Name:
                    Adam J. Chill

                  Title:
                    Managing Director

                
	 	 


        

         

        
          
            
            

          

          
            -25-

            
              

            

          

          
            
            

          

        

        EXHIBIT
          A

         

        QUESTIONNAIRE

        
           

          
            	1.	
                    (a)

                  	
                    Full
                      Legal Name of Selling
                      Securityholder:

                  


          

           

          
            
              

            

             

          

        

        
          	 	
                  (b)

                	
                  Full
                    Legal Name of Registered Holder (if not the same as (a) above)
                    through
                    which Transfer Restricted Securities Listed in Item 3 below are
                    held:

                


        

         

          
            

          

        

         

        
          	 	
                  (c)

                	
                  Full
                    Legal Name of DTC participant (if applicable and if not the same
                    as (b)
                    above) through which Transfer Restricted Securities listed in
                    Item 3 below
                    are held:

                


        

         

          
            

          

        

         

        
          	
                  2.

                	
                  Address
                    for Notices to Selling
                    Securityholder:

                


        

         

          
            

          

        

         

          
            

          

        

         

          
            

          

        

         

        Telephone:

         

        Fax:

         

        Contact
          Person:

         

        
          	
                  3.

                	
                  Beneficial
                    Ownership of Transfer Restricted
                    Securities:

                


        

         

        
          	 	
                  (a)

                	
                  Type
                    and Principal Amount of Transfer Restricted Securities beneficially
                    owned:

                


        

         

        
          
            

          

           

            
              

            

          

        

         

        
          	 	
                  (b)

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

                


        

         

        
          
            

          

           

            
              

            

            


            
              
                
                  
                  

                

                
                  A-1

                  
                    

                  

                

                
                  
                  

                

              

            

             

            
              	4.	
                      Beneficial
                        Ownership of Other Securities of the Company Owned by the
                        Selling
                        Securityholder.

                    


            

          

        

         

        Except
          as set forth below in this Item 4, the undersigned is not the beneficial
          or
          registered owner of any securities of the Company other than the Transfer
          Restricted Securities listed above in Item 3.

         

        
          	 	
                  (a)

                	
                  Type
                    and Amount of Other Securities beneficially owned by the Selling
                    Securityholder:

                


        

         

          
            

          

        

         

          
            

          

           

        

        
          	 	
                  (b)

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

                


        

         

          
            

          

        

         

          
            

          

           

        

        
          	
                  5.

                	
                  Relationships
                    with the Company:

                


        

         

        Except
          as set forth below, neither the undersigned nor any of its affiliates,
          officers,
          directors or principal equity holders (owners of 5% of more of the equity
          securities of the undersigned) has held any position or office or has had
          any
          other material relationship with the Company (or its predecessors or affiliates)
          during the past three years.

         

        State
          any
          exceptions here:

         

        
          	6.	
                  Broker-Dealers
                    and their Affiliates

                


        

        


        
          	
                	(a)	
                  Is
                    the Selling Securityholder a broker-dealer or an affiliate of
                    a
                    broker-dealer:

                


        

        


        Yes
          ____  No
          ____

        


        If
          so,
          please answer the remaining question in this section.

        


        (i)    Please
          advise whether the Notes or any Transfer Restricted Securities were received
          by
          the Selling Securityholder as compensation for investment banking services
          or as
          investment shares, and if so please describe the circumstances.

        


        Note
          that in general we may be required to identify any registered broker-dealer
          as
          an  underwriter
          in the prospectus.

        
          
            
            

          

          
            A-2

            
              

            

          

          
            
            

          

        

        


        (ii)    Except
          as
          set forth below, if the Selling Securityholder is a registered
          broker- dealer,
          the Selling Securityholder does not plan to make a market in the Transfer
           Restricted
          Securities. If the Selling Securityholder plans to make a market in the
           Transfer
          Restricted Securities, please indicate whether the Selling Securityholder
          plans
          to  use
          the
          prospectus relating to the Transfer Restricted Securities as a market-making
           prospectus.

        


        
          	
                	(b)	
                  Affiliation
                    with Broker-Dealers

                


        

        


        Is
          the
          Selling Securityholder an affiliate1
          of
          a
          registered broker-dealer?

        


        Yes
          ____  No
          ____

        


        If
          so,
          please answer the remaining question in this section.

        


        
          	
                	(i)	
                  Please
                    describe the affiliation between the Selling Securityholder and
                    any
                    registered
                    broker-dealer.

                


        

        


        
          	 	
                  (ii)

                	
                  If
                    the Notes or any Transfer Restricted Securities were purchased
                    by the
                    Selling Securityholder other than in the ordinary course of business,
                    please describe the circumstances.

                


        

        


        
          	 	
                  (iii)

                	
                  Please
                    advise whether the Notes or any Transfer Restricted Securities
                    were
                    received by the Selling Securityholder as compensation for investment
                    banking services or as investment shares, and if so please describe
                    the
                    circumstances.

                


        

        


        (iv) If
          the
          Selling Securityholder, at the time of its purchase of Transfer Restricted
          Securities, had any agreements or understandings, directly or indirectly,
          with
          any person to distribute the Transfer Restricted Securities, please describe
          such agreements or undertakings. 

        


        Note
          that if the Selling Securityholder is an affiliate of a broker-dealer and
          did
          not purchase its Notes
          or
          any Transfer Restricted Securities
          in
          the ordinary course of business or at the time of the purchase had any
          agreements or understandings, directly or indirectly, to distribute the
          securities, we may be required to identify the Selling Securityholder as
          an
          underwriter in the prospectus.

        


        
          	
                	(c)	
                  Beneficial
                    Ownership by Natural Persons:

                


        

        


        Is
          the
          Selling Securityholder is an entity, does any natural person having voting
          or
 investing
          power over the Transfer Restricted Securities held by the Selling
          Securityholder?2

         

         

         

          
            

          

        

        
          
            
              	1	
                      An
                        "affiliate" of a specified person or entity means a person
                        or entity that
                        directly, or indirectly through one or more intermediaries,
                        controls or is
                        controlled by, or is under common control with, the person
                        or entity
                        specified.

                    


            

             

          

        

        
          
            
            

          

          
            A-3

            
              

            

          

          
            
            

          

        

        


        If
          so,
          please state the person's or persons' name(s):

        


        
          	7.	
                  Beneficial
                    Ownership by Natural Persons or by a Board or
                    Committee

                


        

        


        Is
          the
          Selling Securityholder a reporting entity with the Securities and Exchange
           Commission?

        


        If
          the
          Selling Securityholder is a majority owned subsidiary of a reporting entity,
          identify  the
          majority securityholder that is a reporting entity.

        


        Yes
          ____  No
          ____

        


        If
          No,
          please answer the remaining questions in this section.

        


        
          	
                	(i)	
                  Please
                    name the natural person or person(s) having voting and/or investment
                    control
                    over the Selling Securityholder.3 

                


        

        


        
          	
                	(ii)	
                  If
                    the voting and/or investment control over the Selling Securityholder
                    is
                    held by board
                    or committee, please state the name of the natural person or
                    person(s) on
                    such
                    board or committee.

                


        

        


         

        
          	
                  8.

                	
                  Plan
                    of Distribution:

                


        

         

        Except
          as set forth below, the undersigned (including its donees or pledgees)
          intends
          to distribute the Transfer Restricted Securities listed above in Item 3
          pursuant
          to the Shelf Registration Statement only as follows (if at all): Such Transfer
          Restricted Securities may be sold from time to time directly by the undersigned
          or, alternatively, through underwriters, broker-dealers or agents. If the
          Transfer Restricted Securities are sold through underwriters, broker-dealers
          or
          agents, the Selling Securityholder will be responsible for underwriting
          discounts or commissions or agents' commissions. Such Transfer Restricted
          Securities may be sold in one or more transactions at fixed prices, at
          prevailing market prices at the time of sale, at varying prices determined
          at
          the time of sale or at negotiated prices. These sales may be effected in
          transactions, which may involve crosses or block transactions,

         

         

        
          
            

          

        

        
          
            
              	2	
                      Please
                        answer "Yes" if any natural person, directly or indirectly,
                        through any
                        contract, arrangement, understanding, relationship, or otherwise
                        has or
                        shares: (a) voting power which includes the power to vote,
                        or to direct
                        the voting of, such security; and/or, (b) investment power
                        which includes
                        the power to dispose, or to direct the disposition of, the
                        Transfer
                        Restricted Securities held by the Selling
                        Securityholder.

                    


            

             

          

          
            
              	
                      3

                    	
                      Please
                        include any natural person that, directly or indirectly,
                        through any
                        contract, arrangement, understanding, relationship, or otherwise
                        has or
                        shares: (a) voting power which includes the power to vote,
                        or to direct
                        the voting of, such security; and/or, (b) investment power
                        which includes
                        the power to dispose, or to direct the disposition of, the
                        Transfer
                        Restricted Securities held by the Selling
                        Securityholder.

                    


            

             

          

        

        
          
            
            

          

          
            A-4

            
              

            

          

          
            
            

          

        

         

        ·    on
          any national securities exchange or quotation service on which the securities
          may be listed or quoted at the time of sale;

         

        ·    in
          the over-the-counter market;

         

        ·    in
          transactions otherwise than on these exchanges or systems or in the
          over-the-counter market;

         

        ·    through
          the writing of options, whether such options are listed on an options exchange
          or otherwise;

         

        ·    in
          ordinary brokerage transactions and transactions in which the broker-dealer
          solicits purchasers;

         

        ·    in
          block trades in which the broker-dealer will attempt to sell the units
          as agent
          but may position and resell a portion of the block as principal to facilitate
          the transaction;

         

        ·    in
          purchases by a broker-dealer as principal and resale by the broker-dealer
          for
          its account;

         

        ·    in
          an
          exchange distribution in accordance with the rules of the applicable
          exchange;

         

        ·    in
          privately negotiated transactions;

         

        ·    in
          short sales;

         

        ·    in
          sales pursuant to Rule 144;

         

        ·    in
          which broker-dealers may agree with the selling securityholders to sell
          a
          specified number of such units at a stipulated price per unit;

         

        ·    in
          a
          combination of any such methods of sale; and

         

        ·    in
          any other method permitted pursuant to applicable law.

         

        State
          any
          exceptions here:

         

          
            

          

           

            
              

            

          

        

         

        Note:
          In no
          event will such method(s) of distribution take the form of an underwritten
          offering of the Transfer Restricted Securities without the prior written
          agreement of the Company.

        
          
            
            

          

          
            A-5

            
              

            

          

          
            
            

          

        

         

        The
          undersigned acknowledges its obligation to comply with the provisions of
          the
          1934 Act and the rules thereunder relating to security manipulation,
          particularly Regulation M thereunder (or any successor rules or regulations),
          in
          connection with any offering of Transfer Restricted Securities pursuant
          to the
          Registration Rights Agreement. The undersigned agrees that neither it nor
          any
          person acting on its behalf will engage in any transaction in violation
          of such
          provisions.

         

        The
          Selling Securityholder hereby acknowledges its obligations under the
          Registration Rights Agreement to indemnify and hold harmless certain persons
          as
          set forth therein.

         

        Pursuant
          to the Registration Rights Agreement, the Company has agreed under certain
          circumstances to indemnify the Selling Securityholder against certain
          liabilities.

         

        In
          accordance with the undersigned's obligation under the Registration Rights
          Agreement to provide such information as may be required by law for inclusion
          in
          the Shelf Registration Statement, the undersigned agrees to promptly notify
          the
          Company of any inaccuracies or changes in the information provided herein
          that
          may occur subsequent to the date hereof at any time while the Shelf Registration
          Statement remains effective.

         

        All
          notices hereunder and pursuant to the Registration Rights Agreement shall
          be
          made in writing by hand delivery, first class mail or air courier guaranteeing
          overnight delivery to the address set forth below.

         

        By
          signing below, the undersigned consents to the disclosure of the information
          contained herein in its answers to Items 1 through 6 and the inclusion
          of such
          information in the Shelf Registration Statement and the related prospectus.
          The
          undersigned understands that such information will be relied upon by the
          Company
          in connection with the preparation or amendment of the Shelf Registration
          Statement and the related prospectus.

         

        Once
          this
          Notice and Questionnaire is executed by the Selling Securityholder and
          received
          by the Company, the terms of this Notice and Questionnaire, and the
          representations and warranties contained herein, shall be binding on, shall
          inure to the benefit of and shall be enforceable by the respective successors,
          heirs, personal representatives and assigns of the Company and the Selling
          Securityholder with respect to the Transfer Restricted Securities beneficially
          owned by such Selling Securityholder and listed in Item (3) above. This
          Agreement shall be governed in all respects by the laws of the State of
          New
          York.

          
            
              
              

            

            
              A-6

              
                

              

            

            
              
              

            

          



        IN
          WITNESS WHEREOF the undersigned, by authority duly given, has caused this
          Notice
          and Questionnaire to be executed and delivered either in person or by its
          duly
          authorized agent.

         

        Dated:
          _____________________________

        Beneficial
          Owner:  ________________________________

        By: 
          ___________________________________________

        Name: 
          _________________________________________

        Title: 
          __________________________________________

         

         

        PLEASE
          RETURN THE COMPLETED AND EXECUTED NOTICE AND

        QUESTIONNAIRE
          TO AMERICAN REAL ESTATE PARTNERS, LP

        


        American
          Real Estate Partners, LP

        767
          Fifth
          Avenue, Suite 4700

        New
          York,
          New York 10153

        Attention:
          General Counsel

        
          
            
            

          

          
            A-7

            
              

            

          

          
            
            

          

        

         

        EXHIBIT
          B

        


        SELLING
          SECURITYHOLDERS

         

        The
          Units
          being offered by the selling securityholders are issuable upon conversion
          of the
          convertible notes. For additional information regarding the issuance of
          those
          convertible notes, see "Private Placement of Convertible Notes" above.
          We are
          registering the Units in order to permit the selling securityholders to
          offer
          the units for resale from time to time. Except for the ownership of the
          convertible notes issued pursuant to the Securities Purchase Agreement,
          the
          selling securityholders have not had any material relationship with us
          within
          the past three years.

         

        The
          table
          below lists the selling securityholders and other information regarding
          the
          beneficial ownership of the Units by each of the selling securityholders.
          The
          second column lists the number of Units beneficially owned by each selling
          securityholder, based on its ownership of the convertible notes, as of
          ________,
          200_, assuming conversion of all convertible notes held by the selling
          securityholders on that date, without regard to any limitations on
          conversions.

         

        The
          third
          column lists the Units being offered by this prospectus by each selling
          securityholder.

         

        In
          accordance with the terms of a registration rights agreement among the
          Company
          and the selling securityholders, this prospectus generally covers the resale
          of
          the notes and the number of Units issued or issuable upon conversion of
          the
          convertible notes as of the trading day immediately preceding the date
          the
          registration statement is initially filed with the SEC.
          Because
          the conversion price of the convertible notes may be adjusted, the number
          of
          units that will actually be issued may be more or less than the number
          of units
          being offered by this prospectus. The fourth column assumes the sale of
          all of
          the units offered by the selling securityholders pursuant to this
          prospectus.

         

        Under
          the
          terms of the convertible notes, a selling securityholder may not convert
          the
          convertible notes to the extent such conversion would cause such selling
          securityholder, together with its affiliates, to beneficially own a number
          of
          Units which would exceed 2.49% of our then outstanding Units following
          such
          conversion, excluding for purposes of such determination Units issuable
          upon
          conversion of the convertible notes which have not been converted. The
          number of
          units in the second column does not reflect this limitation. The selling
          securityholders may sell all, some or none of their units in this offering.
          See
          "Plan of Distribution."

        
          
            
            

          

          
            B-1

            
              

            

          

          
            
            

          

        

         

        
          	
                  Name
                    of Selling Securityholder

                	 	
                  Number
                    of Units Owned

                  Prior
                    to Offering

                	 	
                  Maximum
                    Number of Units to be Sold Pursuant to this
                    Prospectus

                	 	
                  Number
                    of Units Owned

                  After
                    Offering

                
	
                  Portside
                    Growth & Opportunity Fund (1)

                	 	 	 	 	 	
                  0

                
	
                  Highbridge
                    International LLC (2)

                	 	 	 	 	 	 


        

         

        (1)    Ramius
          Capital Group, LLC ("Ramius Capital") is the investment adviser of Portside
          Growth and Opportunity Fund ("Portside") and consequently has voting control
          and
          investment discretion over securities held by Portside. Ramius Capital
          disclaims
          beneficial ownership of the units held by Portside. Peter A. Cohen, Morgan
          B.
          Stark, Thomas W. Strauss and Jeffrey M. Solomon are the sole managing members
          of
          C4S& Co., LLC, the sole managing member of Ramius Capital. As a result,
          Messrs. Cohen, Stark, Strauss and Solomon may be considered beneficial
          owners of
          any units deemed to be beneficially owned by Ramius Capital. Messrs. Cohen,
          Stark, Strauss and Solomon disclaim beneficial ownership of these
          units.

         

        (2)    Highbridge
          Capital Management, LLC is the trading manager of Highbridge International
          LLC
          and has voting control and investment discretion over the securities held
          by
          Highbridge International LLC. Glenn Dubin and Henry Swieca control Highbridge
          Capital Management, LLC and have voting control and investment discretion
          over
          the securities held by Highbridge International LLC. Each of Highbridge
          Capital
          Management, LLC, Glenn Dubin and Henry Swieca disclaims beneficial ownership
          of
          the securities held by Highbridge International LLC.

        
          
            
            

          

          
            B-2

            
              

            

          

          
            
            

          

        

         

        PLAN
          OF DISTRIBUTION

         

        We
          are
          registering the Units issuable upon conversion of the convertible notes
          to
          permit the resale of these Units by the holders of the convertible notes
          from
          time to time after the date of this prospectus. We will not receive any
          of the
          proceeds from the sale by the selling securityholders of the Units. We
          will bear
          all fees and expenses incident to our obligation to register the
          Units.

         

        The
          selling securityholders may sell all or a portion of the Units beneficially
          owned by them and offered hereby from time to time directly or through
          one or
          more underwriters, broker-dealers or agents. If the Units are sold through
          underwriters or broker-dealers, the selling securityholders will be responsible
          for underwriting discounts or commissions or agent's commissions. The Units
          may
          be sold in one or more transactions at fixed prices, at prevailing market
          prices
          at the time of the sale, at varying prices determined at the time of sale,
          or at
          negotiated prices. These sales may be effected in transactions, which may
          involve crosses or block transactions, 

         

        
          	
                	·	
                  on
                    any national securities exchange or quotation service on which
                    the
                    securities may be listed or quoted at the time of
                    sale;

                


        

         

        
          	
                	·	
                  in
                    the over-the-counter market;

                


        

         

        
          	
                	·	
                  in
                    transactions otherwise than on these exchanges or systems or
                    in the
                    over-the-counter market;

                


        

         

        
          	
                	·	
                  through
                    the writing of options, whether such options are listed on an
                    options
                    exchange or otherwise;

                


        

         

        
          	
                	·	
                  ordinary
                    brokerage transactions and transactions in which the broker-dealer
                    solicits purchasers;

                


        

         

        
          	
                	·	
                  block
                    trades in which the broker-dealer will attempt to sell the units
                    as agent
                    but may position and resell a portion of the block as principal
                    to
                    facilitate the transaction;

                


        

         

        
          	
                	·	
                  purchases
                    by a broker-dealer as principal and resale by the broker-dealer
                    for its
                    account;

                


        

         

        
          	
                	·	
                  an
                    exchange distribution in accordance with the rules of the applicable
                    exchange;

                


        

         

        
          	
                	·	
                  privately
                    negotiated transactions;

                


        

         

        
          	
                	·	
                  short
                    sales;

                


        

         

        
          	
                	·	
                  sales
                    pursuant to Rule 144;

                


        

         

        
          	
                	·	
                  broker-dealers
                    may agree with the selling securityholders to sell a specified
                    number of
                    such units at a stipulated price per
                    unit;

                


        

         

        
          
            
            

          

          
            B-3

            
              

            

          

          
            
            

          

        

         

        
          	
                	·	
                  a
                    combination of any such methods of sale;
                    and

                


        

         

        
          	
                	·	
                  any
                    other method permitted pursuant to applicable
                    law.

                


        

         

        If
          the
          selling securityholders effect such transactions by selling Units to or
          through
          underwriters, broker-dealers or agents, such underwriters, broker-dealers
          or
          agents may receive commissions in the form of discounts, concessions or
          commissions from the selling securityholders or commissions from purchasers
          of
          the Units for whom they may act as agent or to whom they may sell as principal
          (which discounts, concessions or commissions as to particular underwriters,
          broker-dealers or agents may be in excess of those customary in the types
          of
          transactions involved). In connection with sales of the Units or otherwise,
          the
          selling securityholders may enter into hedging transactions with broker-dealers,
          which may in turn engage in short sales of the Units in the course of hedging
          in
          positions they assume. The selling securityholders may also sell Units
          short and
          deliver Units covered by this prospectus to close out short positions and
          to
          return borrowed units in connection with such short sales. The selling
          securityholders may also loan or pledge Units to broker-dealers that in
          turn may
          sell such units.

         

        The
          selling securityholders may pledge or grant a security interest in some
          or all
          of the Units owned by them and, if they default in the performance of their
          secured obligations, the pledgees or secured parties may offer and sell
          the
          Units from time to time pursuant to this prospectus or any amendment to
          this
          prospectus under Rule 424(b)(3) or other applicable provision of the Securities
          Act of 1933, as amended, amending, if necessary, the list of selling
          securityholders to include the pledgee, transferee or other successors
          in
          interest as selling securityholders under this prospectus. The selling
          securityholders also may transfer and donate the Units in other circumstances
          in
          which case the transferees, donees, pledgees or other successors in interest
          will be the selling beneficial owners for purposes of this
          prospectus.

         

        The
          selling securityholders and any broker-dealer participating in the distribution
          of the Units may be deemed to be "underwriters" within the meaning of the
          Securities Act, and any commission paid, or any discounts or concessions
          allowed
          to, any such broker-dealer may be deemed to be underwriting commissions
          or
          discounts under the Securities Act. At the time a particular offering of
          the
          Units is made, a prospectus supplement, if required, will be distributed
          which
          will set forth the aggregate amount of Units being offered and the terms
          of the
          offering, including the name or names of any broker-dealers or agents,
          any
          discounts, commissions and other terms constituting compensation from the
          selling securityholders and any discounts, commissions or concessions allowed
          or
          reallowed or paid to broker-dealers.

         

        Under
          the
          securities laws of some states, the Units may be sold in such states only
          through registered or licensed brokers or dealers. In addition, in some
          states
          the Units may not be sold unless such units have been registered or qualified
          for sale in such state or an exemption from registration or qualification
          is
          available and is complied with.

         

        There
          can
          be no assurance that any selling securityholder will sell any or all of
          the
          Units registered pursuant to the registration statement, of which this
          prospectus forms a part.

        
          
            
            

          

          
            B-4

            
              

            

          

          
            
            

          

        

         

        The
          selling securityholders and any other person participating in such distribution
          will be subject to applicable provisions of the Securities Exchange Act
          of 1934,
          as amended, and the rules and regulations thereunder, including, without
          limitation, Regulation M of the Exchange Act, which may limit the timing
          of
          purchases and sales of any of the Units by the selling securityholders
          and any
          other participating person. Regulation M may also restrict the ability
          of any
          person engaged in the distribution of the Units to engage in market-making
          activities with respect to the Units. All of the foregoing may affect the
          marketability of the Units and the ability of any person or entity to engage
          in
          market-making activities with respect to the Units.

         

        We
          will
          pay all expenses of the registration of the Units pursuant to the registration
          rights agreement, estimated to be $[ ] in total, including, without limitation,
          Securities and Exchange Commission filing fees and expenses of compliance
          with
          state securities or "blue sky" laws; provided, however, that a selling
          securityholder will pay all underwriting discounts and selling commissions,
          if
          any. We will indemnify the selling securityholders against liabilities,
          including some liabilities under the Securities Act, in accordance with
          the
          registration rights agreements, or the selling securityholders will be
          entitled
          to contribution. We may be indemnified by the selling securityholders against
          civil liabilities, including liabilities under the Securities Act, that
          may
          arise from any written information furnished to us by the selling securityholder
          specifically for use in this prospectus, in accordance with the related
          registration rights agreement, or we may be entitled to
          contribution.

         

        Once
          sold
          under the registration statement, of which this prospectus forms a part,
          the
          Units will be freely tradable in the hands of persons other than our
          affiliates.

        
          
             

          

          
            B-5