SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 15, 2000
ALPHA HOSPITALITY CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-12522 13-3714474
(State or other jurisdiction (Commission File No.) (Employer
of incorporation) Identification No.)
12 East 49th Street, 24th Floor, New York, New York 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 750-3500
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Item 5. Other Events
On February 8, 2000, the Company sold 4,000 shares of its 7%
Convertible Series D Preferred Stock ("Preferred Stock") to an institutional
investor for an aggregate price of $4,000,000. The Preferred Stock is
convertible into shares of the Company's common stock at a conversion price of
the lesser of $6.00 per share or a price based upon the prevailing market
price of the Company's common stock, subject to a maximum issuance of
3,300,000 shares upon conversion of the Preferred Stock and payment of
dividends owing on the Preferred Stock, taken together. The Preferred Stock
was issued through a private placement, however, the Company has undertaken
to register, for resale by the
holders of the Preferred Stock, the shares, which may be acquired upon the
conversion of the Preferred Stock under the Securities Act of 1933.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(C) Exhibits
1. Form of Securities Purchase Agreement
2. Form of Certificate of Designations of Series D
Preferred Stock
3. Form of Registration Rights Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: February 15, 2000 ALPHA HOSPITALITY CORPORATION
(Registrant)
By: /s/ Robert Steenhuisen
Robert Steenhuisen
Chief Accounting Officer
<PAGE>
Exhibit 10(ar)
SECURITIES PURCHASE AGREEMENT
between
ALPHA HOSPITALITY CORPORATION
and
dated as of
February 8, 2000
<PAGE>
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this
"Agreement"), dated as of February 8, 2000, between
ALPHA HOSPITALITY CORPORATION, a Delaware
corporation (the "Company"), and , a bank
organized under the laws of (the
"Purchaser").
W I T N E S S E T H :
WHEREAS, the Company proposes to issue and
sell an aggregate of 4,000 shares (the "Preferred Shares")
of the Company's Series D Preferred Stock (the "Series D
Shares") on a private placement basis pursuant to an
exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended, and the Purchaser
desires to purchase the Preferred Shares from the Company
on such basis, on the terms and subject to the conditions set
forth herein; and
WHEREAS, the Preferred Shares will be
convertible into shares of common stock, par value $.01
per share, of the Company (the "Common Stock"),
pursuant to the Certificate of Designations for the Series D
Shares (the "Series D Designation"), the form of which is
annexed hereto as Exhibit A, and the registered holders of
the Preferred Shares will have registration rights with
respect to such shares of Common Stock and/or, if
applicable, other securities issuable upon conversion of the
Preferred Shares (such shares of Common Stock and/or, if
applicable, other securities the "Conversion Shares")
pursuant to the terms of the Registration Rights Agreement,
dated as of the date hereof, between the Company and the
Purchaser (the "Registration Rights Agreement");
NOW THEREFORE, in consideration of the
premises, representations, warranties, covenants and
agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Definitions. For
purposes of this Agreement, the following terms shall have
the following respective meanings:
"Affiliate" of a Person means another Person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with,
such first-mentioned Person. The term "control" (including
the terms "controlling," "controlled by" and "under
common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Capital Stock" means, with respect to any Person,
any and all shares, interests, participations or other equiva-
lents (however designated) of corporate stock, including
each class of common stock and preferred stock, of such
Person.
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"Closing" has the meaning set forth in Section 2.02.
"Commission" means the United States Securities
and Exchange Commission.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Governmental Authority" means any federal or
state government or political subdivision thereof and any
agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
"Material Adverse Effect" has the meaning set forth
in Section 3.01.
"Person" means an individual or a corporation, part-
nership, trust, incorporated or unincorporated association,
joint venture, joint stock company, Governmental
Authority or other entity of any kind.
"SEC Reports" means, collectively, the Company's
Annual Report on Form 10-K for the year ended December
31, 1998 and the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31, 1999, June 30, 1999
and September 30, 1999.
"Securities Act" means the Securities Act of 1933,
as amended.
"Transaction Documents" means, collectively, this
Agreement, the Registration Rights Agreement and the
Series D Designation.
"United States" has the meaning ascribed to such
term in Rule 902(p) of Regulation S under the Securities
Act.
"U.S. Person" has the meaning ascribed to such
term in Rule 902(o) of Regulation S under the Securities
Act.
"Year 2000 Compliant" means, with respect to a
Person's information technology, the information
technology is designed to be used prior to, during, and after
the calendar Year 2000 A.D., and the information
technology used during each such time period will
accurately receive, provide and process date/time data
(including, but not limited to, calculating, comparing and
sequencing) from, into and between the twentieth and
twenty-first centuries, including the years 1999 and 2000,
and leap year calculations and will not malfunction, cease
to function or provide invalid or incorrect results as a result
of date/time data, to the extent that other information
technology, used in combination with the information
technology being acquired, properly exchanges date/time
data with it.
<PAGE>
ARTICLE II
SALE AND PURCHASE
SECTION 2.01. Agreement to Sell and to
Purchase; Purchase Price. On the terms and subject to
the conditions set forth in this Agreement, the Company
hereby agrees to issue and sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Company,
4,000 Preferred Shares at an aggregate purchase price of
$4,000,000, payable in immediately available funds (the
"Purchase Price").
SECTION 2.02. Closing. The closing of the sale
and purchase of the Preferred Shares (the "Closing") shall
be deemed to take place concurrently with the execution
and delivery of this Agreement by the parties hereto. At
the Closing, the following closing transactions shall take
place, each of which shall be deemed to occur
simultaneously with the Closing: (i) (a) the Company shall
deliver to the Purchaser evidence of the filing of the Series
D Designation with, and the acceptance thereof by, the
Secretary of State of the State of Delaware and (b) the
Company shall execute, issue and deliver certificates
evidencing the Preferred Shares to the Purchaser in such
denominations as the Purchaser shall reasonably request;
(ii) the Purchaser shall pay the Purchase Price by wire
transfer to the account designated by the Company in
writing prior to the Closing; (iii) the Company shall pay the
expenses set forth in Section 6.02 hereof by wire transfer to
the account designated by the Purchaser in writing prior to
the Closing; provided that, if the Purchaser so elects, such
expenses may be netted against payment of the Purchase
Price pursuant to clause (ii) above; (iv) the Company and
the Purchaser shall execute and deliver the Registration
Rights Agreement; (v) the Company shall deliver to the
Purchaser a certificate executed by the Secretary of the
Company, signing in such capacity, dated the date of the
Closing (A) certifying that attached thereto are true and
complete copies of the resolutions duly adopted by the
Board of Directors of the Company authorizing the
execution and delivery of the Transaction Documents and
the consummation of the transactions contemplated thereby
(including, without limitation, the issuance and sale of the
Preferred Shares and the reservation and issuance of the
Conversion Shares upon conversion of the Preferred
Shares), which authorization shall be in full force and
effect on and as of the date of such certificate, and (B)
certifying and attesting to the office, incumbency, due
authority and specimen signatures of each Person who
executed any Transaction Document for or on behalf of the
Company; (vi) Parker Duryee Rosoff & Haft, a
professional corporation, counsel to the Company, shall
deliver to the Purchaser an opinion, dated the date of the
Closing and addressed to the Purchaser, in form and
substance acceptable to the Purchaser; and (vii) the
Company shall have delivered to the Purchaser
documentation executed by Bryanston Group, Inc.
("Bryanston") and the Company in the form attached as
Exhibit B hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
<PAGE>
As a material inducement to the Purchaser to
purchase the Preferred Shares, the Company hereby
represents and warrants to the Purchaser that on and as of
the date hereof:
SECTION 3.01. Organization and Standing.
Except as disclosed in Schedule 3.01, the Company and
each of its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite
corporate power and authority, and all authorizations,
licenses, permits and certifications necessary for it to own
its properties and assets and to carry on its business as it is
now being conducted (and as, to the extent described
therein, described in the SEC Reports) and proposed to be
conducted. The Company and each of its subsidiaries is
duly qualified to transact business and is in good standing
in each jurisdiction in which the character of the properties
owned or leased by it or the nature of its businesses makes
such qualification necessary, except where the failure to so
qualify or be in good standing would not have a material
adverse effect on the business, assets, operations,
properties, condition (financial or otherwise) or prospects
of the Company and its subsidiaries, taken as a whole, or
any material adverse effect on the Company's ability to
consummate the transactions contemplated by, and to
execute, deliver and perform its obligations under, each of
the Transaction Documents (a "Material Adverse Effect").
SECTION 3.02. Securities of the Company. The
authorized Capital Stock of the Company consists of the
securities set forth on Schedule 3.02. Except as set forth in
the SEC Reports or disclosed in Schedule 3.02, the
Company has no other authorized, issued or outstanding
equity securities or securities containing any equity
features, or any other securities convertible into,
exchangeable for or entitling any person to otherwise
acquire any other securities of the Company containing any
equity features. All of the outstanding shares of Capital
Stock of the Company have been duly and validly
authorized and issued, and are fully paid and
nonassessable. The Preferred Shares and all of the
Conversion Shares have been duly and validly authorized.
When issued against payment therefor as provided in this
Agreement, the Preferred Shares will be validly issued and
will constitute valid and enforceable obligations of the
Company, enforceable against the Company in accordance
with their terms (subject to the effects of applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and general principles of equity). When issued
upon conversion of the Preferred Shares, the Conversion
Shares will be validly issued, fully paid and nonassessable,
free and clear of all preemptive rights, claims, liens,
charges, encumbrances and security interests of any nature
whatsoever (other than as created by or through the
Purchaser). A sufficient number of shares of Common
Stock has been duly reserved and will remain available for
issuance upon conversion of the Preferred Shares. Except
as set forth in the SEC Reports or as set forth in Schedule
3.02, there are no outstanding options, warrants, conversion
rights, subscription rights, preemptive rights, rights of first
refusal or other rights or agreements of any nature
outstanding to subscribe for or to purchase any shares of
Capital Stock of the Company or any other securities of the
Company of any kind binding on the Company. Neither
the issuance of the Preferred Shares nor the issuance of the
Conversion Shares is subject to
<PAGE>
any preemptive rights,
rights of first refusal or other similar limitation. Except as
otherwise required by law or as set forth in Schedule 3.02,
there are no restrictions upon the voting or transfer of any
shares of the Company's Capital Stock pursuant to the
Company's Certificate of Incorporation, by-laws or other
documents. Except as provided herein or by the
Transaction Documents or as set forth in Schedule 3.02,
there are no agreements or other obligations (contingent or
otherwise) that may require the Company to repurchase or
otherwise acquire any shares of its Capital Stock.
SECTION 3.03. Authorization; Enforceability.
The Company has the corporate power and authority to
execute, deliver and perform the terms and provisions of
this Agreement and the Registration Rights Agreement, has
the corporate power and authority to direct an officer or
officers of the Company to execute the Series D
Designation and file it with the Secretary of State of the
State of Delaware and has the corporate power and
authority to perform the terms and provisions of the Series
D Designation, and has taken all necessary corporate action
to authorize the execution, delivery and performance by it
of each of this Agreement and the Registration Rights
Agreement and has taken all necessary corporate action to
authorize and direct an officer or officers of the Company
to execute the Series D Designation and file it with the
Secretary of State of the State of Delaware and to
consummate the transactions contemplated by each of such
Transaction Documents to be performed by it. No other
corporate proceedings on the part of the Company are
necessary, and no consent of the shareholders of the
Company is required, for the valid execution and delivery
by the Company of this Agreement and the Registration
Rights Agreement and the execution of the Series D
Designation and filing thereof with the Secretary of State
of the State of Delaware by an officer or officers of the
Company and the performance and consummation by the
Company of the transactions contemplated by each of the
Transaction Documents to be performed by the Company.
The Company has duly executed and delivered or
concurrently herewith is executing and delivering, each of
this Agreement and the Registration Rights Agreement and
an officer or officers of the Company have executed the
Series D Designation and have filed it (or caused it to be
filed) with the Secretary of State of the State of Delaware.
Assuming the due execution of this Agreement and the
Registration Rights Agreement by the Purchaser, this
Agreement, the Registration Rights Agreement, and the
Series D Designation constitute the legal, valid and binding
obligations of the Company, enforceable against the
Company in accordance with each of its respective terms,
except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or
at law).
SECTION 3.04. No Violation; Consents.
(a) The execution, delivery and performance by
the Company of the Transaction Documents and the
consummation of the transactions contemplated thereby to
be performed by the Company do not and will not (i)
contravene the applicable provisions of any law, statute,
rule, regulation, order, writ, injunction, judgment or decree
of any court or Governmental Authority to or by which the
Company or any of its
<PAGE>
subsidiaries or any of its respective
property or assets is bound, (ii) violate, result in a breach of
or constitute (with due notice or lapse of time or both) a
default (which has not been irrevocably waived (except as
set forth in Schedule 3.04) or consented to) or give rise to
an event of acceleration under any contract, lease, loan or
credit agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the
Company is a party or by which it or any of its subsidiaries
is bound or to which any of its respective properties or
assets is subject, nor result in the creation or imposition of
any lien, security interest, charge or encumbrance of any
kind upon any of the properties, assets or Capital Stock of
the Company or any of its subsidiaries, or (iii) violate any
provision of the organizational and other governing
documents of the Company or any of its subsidiaries.
Schedule 3.04 sets forth all violations, breaches and
defaults that are referred to in the parenthetical in clause
(ii) above which have been irrevocably waived (except as
set forth in Schedule 3.04) or consented to.
(b) No consent, approval, authorization or order
of, or filing or registration with, any court or Governmental
Authority or other Person is required to be obtained or
made by the Company for the execution, delivery and
performance of the Transaction Documents or the
consummation of any of the transactions contemplated
thereby (other than the filing of the Series D Certificate
with the Secretary of State of the State of Delaware and the
registration of the resale of the Conversion Shares with the
SEC and pursuant to any state "blue sky" laws as
contemplated by the Registration Rights Agreement)
except for those consents or authorizations previously
obtained and those filings previously made.
SECTION 3.05. Securities Act Representations.
The Company has not offered or sold and will not offer or
sell any Series D Shares in this offering other than the
Preferred Shares. Assuming the accuracy of the
Purchaser's representations pursuant to Section 4.02
hereof, the sale of the Preferred Shares hereunder is, and
the issuance of the Conversion Shares upon conversion of
the Preferred Shares will be, exempt from the registration
requirements of the Securities Act. Neither the Company,
nor any of its Affiliates, or, to its knowledge, any Person
acting on its or their behalf has engaged in any form of
general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in
connection with the offer or sale of the Preferred Shares or
Conversion Shares. Neither the Company, nor any of its
Affiliates, nor to its knowledge, any Person acting on its or
their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any
security other than pursuant to this Agreement, under
circumstances that would require registration under the
Securities Act of the Preferred Shares to be issued under
this Agreement. The Company is eligible to use Form S-3
under the Securities Act to file the Registration Statement
(as defined in the Registration Rights Agreement). The
Company has not provided the Purchaser with any material
non-public information that, according to applicable law,
rule or regulation, should have been disclosed publicly by
the Company prior to engaging in the transaction
contemplated by the Transaction Documents but that has
not been so disclosed.
SECTION 3.06. Solvency; No Default. (a) The
Company is, and upon giving effect to the transactions
contemplated hereby to be performed by it as of the
Closing will
<PAGE>
be, Solvent (as defined below). "Solvent"
means that, as of the date of determination, (i) the then fair
saleable value of the assets of the Company (on a
consolidated basis) exceeds the then total amount (on a
consolidated basis) of its debts and other liabilities,
(including any guarantees and other contingent,
subordinated, unmatured or unliquidated liabilities whether
or not reduced to judgment, disputed or undisputed,
secured or unsecured), (ii) the Company has sufficient
funds and cash flow to pay its liability on its existing debts
as they become absolute and matured, (iii) final judgments
against the Company in pending or threatened actions for
money damages will not be rendered at a time when, or in
an amount such that, the Company will be unable to satisfy
any such judgments promptly in accordance with their
terms (taking into account (a) the maximum reasonable
amount of such judgments in any such actions (other than
amounts that would be remote), (b) the earliest reasonable
time at which such judgments would be rendered and (c)
any reasonably expected insurance recovery with respect
thereto), and (iv) the Company does not have unreasonably
small capital with which to engage in its present business.
(b) The Company is not, and immediately after
the consummation of the transactions contemplated hereby
to be performed by the Company will not be, in default
(which has not otherwise been irrevocably waived (except
as set forth in Schedule 3.04) or consented to) under or in
violation (which has not otherwise been irrevocably
waived (except as set forth in Schedule 3.04) or consented
to) of (whether upon the passage of time, the giving of
notice or both) its organizational and other governing
documents, or any provision of any security issued by the
Company, or of any agreement, instrument or other
undertaking to which the Company is a party or by which it
or any of its property or assets is bound, or the applicable
provisions of any law, statute, rule, regulation, order, writ,
injunction, judgment or decree of any court or
Governmental Authority to or by which the Company or
any of its property or assets is bound, which default or
violation, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.07. No Brokers. No broker, finder,
agent or similar intermediary is entitled to any broker's,
finder's, placement or similar fee or other commission in
connection with the transactions contemplated hereby
based on any agreement, arrangement or understanding
with the Company.
SECTION 3.08. SEC Reports; Financial
Condition; No Adverse Changes. (a) The audited
consolidated financial statements of the Company and the
related notes thereto as at December 31, 1998 reported on
by Rothstein & Kass, LLP, independent accountants,
copies of which have heretofore been furnished to the
Purchaser, present fairly the financial condition, results of
operations and cash flows of the Company (on a
consolidated basis) at such date and for the periods set forth
therein. The unaudited consolidated balance sheets,
consolidated statements of operations and consolidated
statements of cash flows at and for the period ended
September 30, 1999 (such audited and unaudited
consolidated financial statements, collectively, the
"Financial Statements"), copies of which have heretofore
been furnished to the Purchaser and are publicly available,
present fairly the financial condition, results of operations
and cash
<PAGE>
flows of the Company (on a consolidated basis) at
such date and for the periods set forth therein, subject to
normal year-end adjustments with respect to the September
30, 1999 financial statements. The Financial Statements,
including the related schedules and notes thereto (if any),
have been prepared in accordance with generally accepted
accounting principles as set forth in the opinions and
pronouncements of the Accounting Principles Board of
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial
Accounting Standards Board as in effect on the date of
filing of such documents with the Commission, applied on
a consistent basis (except for changes concurred in by the
Company's independent public accountants) unless
otherwise expressly stated therein. Except as disclosed in
the SEC Reports, during the period from January 1, 1999 to
and including the date hereof, there has been no sale,
transfer or other disposition by the Company of any
material part of the business, property or securities of the
Company and no purchase or other acquisition of any
business, property or securities by the Company material in
relation to the financial condition of the Company.
(b) Except as are fully reflected or reserved
against in the Financial Statements and the notes thereto,
there are no liabilities or obligations with respect to the
Company or any of its subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) that, either individually
or in the aggregate, after taking into account (a) the
maximum reasonable amount of any liability that may arise
on account of any litigation or any other contingent liability
or obligation (other than amounts that would be remote),
(b) the earliest reasonable time at which any such liability
or obligation may become due and (c) any reasonably
expected insurance recovery with respect thereto, could
reasonably be expected to have a Material Adverse Effect.
(c) Since December 31, 1998, except as set
forth in the SEC Reports, there has been no development or
event, nor any prospective development or event known to
the Company or any of its subsidiaries, or any litigation,
proceeding or other action seeking an injunction or other
restraining order, damages or other relief from a court or
administrative agency of competent jurisdiction pending,
threatened or, to the knowledge of the Company,
contemplated, or any action of any Governmental
Authority, that has had or could reasonably be expected to
have a Material Adverse Effect.
SECTION 3.09. Use of Proceeds; Federal
Regulations. No part of the net proceeds from the sale of
the Preferred Shares will be used in a manner which would
violate the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System. The
Company will not use such proceeds other than for or in
connection with the acquisition and development of (a) an
off-shore gaming and entertainment enterprise, (b) truck
stops in Louisiana and/or (c) other gaming-related business
or operation.
SECTION 3.10. Subsidiaries. As of the date
hereof, the Company has the subsidiaries listed on Exhibit
21 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 or as otherwise disclosed in
SEC Reports filed
<PAGE>
subsequent to December 31, 1998.
SECTION 3.11. Year 2000 Compliance.
The Company and its subsidiaries are Year 2000
Compliant. To the knowledge of the Company each of the
suppliers, vendors and customers material to the operations
of the Company and its subsidiaries is Year 2000
Compliant.
SECTION 3.12 No Integrated Offering.
Neither the Company, nor any of its Affiliates, nor to its
knowledge any Person acting on its or their behalf, has,
directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security under
circumstances that would require registration under the
Securities Act of the offer and sale of the Preferred Shares.
SECTION 3.13 No Litigation. No litigation
or claim (including those for unpaid taxes), or
environmental proceeding against the Company or any of
its subsidiaries is pending, threatened or, to the Company's
best knowledge, contemplated that, if determined
adversely, would (after taking into consideration any
reasonably expected insurance recovery with respect
thereto), have a Material Adverse Effect on the Company.
SECTION 3.14. Environmental Matters. The
Company and each of its subsidiaries is in compliance in
all material respects with all applicable state and federal
environmental laws, and no event or condition has occurred
that may interfere in any material respect with the
compliance by the Company or any of its subsidiaries with
any environmental law or that may give rise to any liability
under any environmental law that, individually or in the
aggregate, would have a Material Adverse Effect.
SECTION 3.15. Intellectual Property. The
Company (and/or its subsidiaries) owns or has licenses to
use certain patents, copyrights and trademarks ("intellectual
property") associated with its business. The Company and
its subsidiaries have all intellectual property rights that are
needed to conduct the business of the Company and its
subsidiaries as it is now being conducted or as proposed to
be conducted as disclosed in the SEC Reports. The
Company has no reason to believe that the intellectual
property rights that it (and/or its subsidiaries) owns are
invalid or unenforceable or that the use of such intellectual
property by the Company (and/or its subsidiaries') infringes
upon or conflicts with any right of any third party, and
neither the Company nor any of its subsidiaries has
received notice of any such infringement or conflict. The
Company has no knowledge of any infringement of its
(and/or its subsidiaries) intellectual property by any third
party.
SECTION 3.16 Insurance. The Company
and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and
risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in
which the Company and its subsidiaries are engaged. The
Company has no reason to believe that it and its
subsidiaries will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
<PAGE>
coverage from similar insurers as may be necessary
to continue its business without a significant increase in
cost.
SECTION 3.17. Disclosure. The representations
and warranties of the Company in this Agreement and the
statements contained in the SEC Reports and the schedules,
certificates and exhibits furnished to the Purchaser by or on
behalf of the Company in connection herewith do not
contain any untrue statement of a material fact and do not
omit to state any material fact necessary to make the
statements herein or therein not misleading. The SEC
Reports contain all material information concerning the
Company required to be set forth therein, and no event or
circumstance has occurred or exists since December 31,
1998, that would require the Company to disclose such
event or circumstance in order to make the statements in
the SEC Reports not misleading as of the date of the
Closing but that has not been so disclosed. The Company
hereby acknowledges that the Purchaser is and will be
relying on the SEC Reports and the Company's
representations, warranties and covenants contained herein
in making an investment decision with respect to the
Preferred Shares and will be relying thereon (together with
future reports filed with the Commission) in connection
with any transfer of Preferred Shares and Conversion
Shares or any acquisition of Conversion Shares upon the
conversion of the Preferred Shares.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE PURCHASER
The Purchaser hereby acknowledges, represents,
warrants and covenants to the Company as follows:
SECTION 4.01. Authorization; Enforceability;
No Violations.
(a) The Purchaser is a bank, duly organized,
validly existing and in good standing under the laws of
and has all requisite corporate power and
authority to execute, deliver and perform the terms and
provisions of this Agreement and the Registration Rights
Agreement and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of
this Agreement and the Registration Rights Agreement and
to consummate the transactions contemplated hereby and
thereby to be performed by it.
(b) The execution, delivery and performance by
the Purchaser of this Agreement and the consummation by
the Purchaser of the transactions contemplated hereby and
thereby to be performed by it do not and will not violate
any provision of (i) the Purchaser's organizational
documents or (ii) any law, statute, rule, regulation, order,
writ, injunction, judgment or decree to which the Purchaser
is subject. The Purchaser has duly executed and delivered
this Agreement and has executed and delivered, or
concurrently herewith is executing and delivering, the
Registration Rights Agreement. Assuming the due
execution hereof and thereof by the Company, each of this Agreement
<PAGE>
and the Registration Rights Agreement
constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
SECTION 4.02. Securities Act Representations;
Legends. (a) The Purchaser understands that: (i) the
offering and sale of the Preferred Shares to be issued and
sold hereunder is intended to be exempt from the
registration requirements of the Securities Act; (ii) neither
the Preferred Shares nor the Conversion Shares have been
registered under the Securities Act or any other applicable
securities laws and such securities may be resold only if
registered under the Securities Act and any other applicable
securities laws or if an exemption from such registration
requirements is available; and (iii) the Company is required
to register any resale of the Preferred Shares or the
Conversion Shares under the Securities Act and any other
applicable securities laws only to the extent provided in the
Registration Rights Agreement.
(b) The Preferred Shares to be acquired by the
Purchaser pursuant to this Agreement are being acquired
for its own account, for investment purposes, and not with
a view to, or for sale in connection with, any distribution
thereof or of Conversion Shares issuable upon conversion
of the Preferred Shares in violation of the Securities Act or
any other securities laws that may be applicable.
(c) The Purchaser is not an affiliate (as such
term is defined in the Securities Act) of the Company.
(d) The Purchaser is not a U.S. Person and, at
the time the buy order for the Preferred Shares being
purchased hereunder was originated, the Purchaser was
outside of the United States.
(e) The Purchaser (i) has sufficient knowledge
and experience in financial and business matters so as to be
capable of evaluating the merits and risks of its investment
in the Preferred Shares and is capable of bearing the
economic risks of such investment, including a complete
loss of its investment in the Preferred Shares; (ii) believes
that its investment in the Preferred Shares is suitable for it
based upon its objectives and financial needs, and the
Purchaser has adequate means for providing for its current
financial needs and business contingencies and has no
present need for liquidity of investment with respect to the
Preferred Shares; (iii) has no present plan, intention or
understanding and has made no arrangement to sell the
Preferred Shares or the Conversion Shares at any
predetermined time or for any predetermined price; (iv) has
not purchased, sold or entered into any put option, short
position or similar arrangement with respect to the
Common Stock, and will not, for so long as it owns any
Preferred Shares or Conversion Shares, purchase, sell or
enter into any such put option, short position or similar
arrangement in any manner that violates the provisions of
the Securities Act or the Exchange Act.
<PAGE>
(f) No oral or written statements or
representations have been made to the Purchaser by or on
behalf of the Company in connection with the offering and
sale of the Preferred Shares hereunder other than those set
forth in the SEC Reports, or as set forth herein or in the
other Transaction Documents, and the Purchaser is not
subscribing for the Preferred Shares as a result of, or in
response to, any advertisement, article, notice or other
communication published in any newspaper, magazine or
similar media or broadcast over television or radio, or
presented at any seminar or meeting.
(g) The Purchaser acknowledges that the
Securities Act restricts the transferability of securities, such
as the Preferred Shares and Conversion Shares, issued in
reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 4(2)
thereunder, and that, subject to Section 5.02 hereof, the
certificates representing the Preferred Shares and the
Conversion Shares will bear a legend in substantially the
following form, by which the Purchaser and each
subsequent holder of such securities will be bound:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE (AND AS OF THE DATE OF ORIGINAL
ISSUANCE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE, ANY UNDERLYING
SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY
OTHER APPLICABLE SECURITIES LAWS AND
HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND
SUCH SECURITIES LAWS. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE OR ANY
SECURITIES ISSUABLE UPON THE CONVERSION
HEREOF MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED OTHER THAN (A)
TO ALPHA HOSPITALITY CORPORATION (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO RULE 144 UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR (E)
PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT. THE
HOLDER OF THIS CERTIFICATE AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY OR ANY SECURITY ISSUED UPON
CONVERSION HEREOF IS TRANSFERRED (UNLESS
SUCH SECURITY IS TRANSFERRED PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY PROPOSED
TRANSFER PURSUANT TO CLAUSES (B), (C) OR (D)
ABOVE, THE COMPANY MAY REQUIRE THAT THE
TRANSFEROR FURNISH IT WITH AN OPINION OF
COUNSEL CONFIRMING THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE RESPECTIVE MEANINGS
ASSIGNED TO THEM IN REGULATION S
<PAGE>
UNDER THE SECURITIES ACT.
(h) The Purchaser acknowledges that as the
Common Stock is currently quoted on a U.S. automated
interdealer quotation system, Rule 144A under the
Securities Act may not be available with respect to resales
of the Preferred Shares or the Conversion Shares.
SECTION 4.03. No Brokers. No broker, finder,
agent or similar intermediary is entitled to any broker's,
finder's, placement or similar fee or other commission in
connection with the transactions contemplated hereby
based on any agreement, arrangement or understanding
with the Purchaser.
SECTION 4.04. No Influence on Business. The
Purchaser (whether in its capacity as holder of Preferred
Shares and/or Conversion Shares or otherwise) covenants
and agrees with the Company that it will not: (a) in any
manner exercise or attempt to exercise a controlling
influence over the management or policies of the Company
or attempt to influence the business activities or decisions
or the Company; (b) propose a director or slate of directors
to serve on the board of directors of the Company; (c) have
or seek to have a representative of the Purchaser be
appointed to serve as a director of the Company or
participate as an observer at meetings of the board of
directors (or committees thereof) or have or seek to have
any employee or representative of the Purchaser serve as an
officer, agent or employee of the Company; (d) attempt to
influence the dividend policies or practices of the
Company; (e) solicit or participate in soliciting proxies
with respect to any matter presented to the shareholders of
the Company; (f) dispose or threaten to dispose of the
Preferred Shares or Conversion Shares to any third party in
any manner as a condition to specific action or non-action
by the Company; or (g) enter into any joint venture,
enterprise or undertaking of any kind with the Company.
SECTION 4.05. Limitations on Resales.
The Purchaser covenants and agrees that it (together with
its Affiliates) will not transfer the Preferred Shares to any
Person (together with such Person's Affiliates), other than
the Company or Affiliates of the Purchaser, in a transaction
or series of transactions, in an aggregate principal amount
in excess of such principal amount as would be convertible
at the date of transfer into in excess of 2% of the issued and
outstanding shares of Common Stock of the Company
(based upon the applicable Conversion Price (as defined in
the Series D Designation) and number of shares of
Common Stock of the Company issued and outstanding on
the applicable date of transfer and without giving effect to
any limitations on conversion set forth in the Series D
Designation). The Purchaser further covenants and agrees
that it will not knowingly transfer to any Person (together
with such Person's Affiliates), other than the Company or
Affiliates of the Purchaser, in a transaction or series of
transactions, Conversion Shares in an aggregate amount in
excess of 2% of the issued and outstanding shares of
Common Stock of the Company (based upon the number
of shares of Common Stock of the Company issued and
outstanding on the applicable date of transfer); in
furtherance thereof, the Purchaser covenants and agrees
that it shall not during any five (5) consecutive trading days
transfer Conversion Shares in secondary market transactions
<PAGE>
in which the identity of the acquiror is not
known to the Purchaser in an amount in excess of 2% of
the issued and outstanding shares of Common Stock of the
Company (based upon the number of shares of Common
Stock of the Company issued and outstanding on the
applicable date of transfer). The Purchaser covenants and
agrees that the foregoing transfers to third parties shall be
made in bona fide, arms-length transactions and that upon
any such transfer, it will not retain the power to control the
disposition of the securities transferred or, in the case of
Conversion Shares, to direct the voting with respect
thereto.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Exemption from Registration;
Limitation on Issuance of Securities.
(a) The Company will not make any offer to
sell, solicit any offer to buy, agree to sell or sell any
security or right to acquire any security, except at such time
and in such manner so as not to cause the loss of any of the
exemptions for the offer and sale of the Preferred Shares
hereunder and for the issuance of the Conversion Shares
upon conversion of the Preferred Shares from the
registration requirements under the Securities Act or under
the securities or "blue sky" laws of any jurisdiction in
which such offer, sale or issuance is made. Without
limiting the generality of the foregoing, the Company will
not make any offer to sell, solicit any offer to buy, agree to
sell or sell any securities similar in tenor to the Preferred
Shares or right to acquire any securities similar in tenor to
the Preferred Shares during the period commencing on the
date of the Closing and ending one hundred and eighty
(180) days thereafter (preferred stock issued in accordance
with subsection (b) below and which is otherwise in
compliance with the first sentence of this subsection (a)
shall not be deemed to be similar in tenor to the Preferred
Shares).
(b) In addition to the foregoing limitation on the
issuance of securities, for a period commencing on the
Closing Date and ending 180 days from the date of
effectiveness of the Registration Statement (as defined in
the Registration Rights Agreement), (i) the Company shall
not issue any securities convertible into shares of Common
Stock unless the conversion price provided therefor
represents a premium of at least 20% to the market price of
the Company's Common Stock on the date of issuance of
such convertible security; provided, however, that (A) the
Company may issue up to $3,000,000 aggregate face
amount of Parallel Preferred Stock (as defined in the Series
D Designation) and any amount of Senior Preferred Stock
(as defined in the Series D Designation), which Parallel
Preferred Stock and Senior Preferred Stock may provide
for a conversion price at less than a 20% premium to the
market price of the Company's Common Stock on the date
of issuance of such respective Preferred Stock and Senior
Preferred Stock and (B) the Company may issue up to
$1,750,000 aggregate stated amount of preferred stock in
partial consideration for the acquisition of the business and
<PAGE>
assets of up to two truck stop operations located in
Louisiana, which preferred stock may provide for a
conversion price at less than a 20% premium to the market
price of the Company's Common Stock on the date of
issuance of such preferred stock, (ii) the Company shall not
issue (except upon the exercise, exchange or conversion of
any security issued prior to the Initial Issuance Date
exercisable or exchangeable for, or convertible into, any
shares of Common Stock) any shares of Common Stock at
a discount of more than (x) 5% in the case of a transaction
under the Securities Act and (y) 25% in the case of a
private placement, from the closing bid price of the
Common Stock on the trading day immediately preceding
date of issuance and (iii) neither the Company nor any
affiliate shall incur any indebtedness for borrowed money
or grant any security interest or lien in or on any of its
assets; provided, however, that (A) the Company or any
affiliate may incur indebtedness for borrowed money to
acquire assets (including pursuant to any equipment,
machinery or other leasing transaction or purchase money
mortgage), provided that such indebtedness is non-recourse
to the Company and such indebtedness may be secured by,
and only by, such acquired assets (provided that, in
addition to the foregoing, Casino Ventures LLC may incur
indebtedness (in an aggregate principal amount not to
exceed $4,000,000) for borrowed money and may pledge
or lien any of its assets as long as such indebtedness is non-
recourse to the Company), (B) the Company may guarantee
up to $3,000,000 principal amount (plus accrued and
unpaid interest) of indebtedness assumed by one or more
affiliates in connection with the acquisition of the business
and assets of up to two truck stop operations located in
Louisiana and the affiliate(s) of the Company making such
acquisition may grant a lien or security interest in its or
their assets to secure any financing related to such
acquisition (provided such financing is not, except with
respect to the aforesaid $3,000,000 principal amount (plus
accrued and unpaid interest) recourse to the Company), (C)
the Company or any affiliate of the Company may incur
indebtedness for borrowed money and may pledge or lien
any of its assets in connection with the financing of the
development of the Company's or any affiliate's interest in
the proposed casino and related projects and operations to
be located in the Monticello, New York region.
Notwithstanding the foregoing, the Company shall not be
restricted at any time from (i) issuing warrants or options
exercisable for shares of Common Stock (pursuant to an
employee stock option plan or other similar compensation
plan in effect on the date of this Agreement or subsequently
adopted by the shareholders of the Company, (ii) issuing
Common Stock to Stanley Tollman in satisfaction of
accrued compensation pursuant to the terms disclosed in
the SEC Reports or (iii) issuing shares of common stock in
lieu of cash dividends on any shares of preferred stock of
the Company.
SECTION 5.02 Transfer Restrictions. (a) The
Purchaser acknowledges that any proposed offer, sale,
pledge or other transfer of Preferred Shares or Conversion
Shares prior to the date that is two (2) years from the
Closing (or such other date as may be required pursuant to
Rule 144 under the Securities Act (or similar successor
provision) as in effect from time to time), in the absence of
registration under the Securities Act, is limited.
Accordingly, prior to such passage of time or such
registration, the Preferred Shares or the Conversion Shares
may be offered, sold, pledged or otherwise transferred only
to (i) the Company, (ii) in an offshore transaction in
accordance with Rule 904 under the Securities Act, (iii)
pursuant to any other exemption from registration provided
<PAGE>
by the Securities Act, (iv) pursuant to Rule 144 under the
Securities Act or (v) pursuant to an effective registration
statement under the Securities Act; in the case of any
transfer pursuant to clause (ii), (iii) or (iv), the Company
shall be entitled to receive an opinion of Purchaser's
counsel, in form and substance reasonably satisfactory to
the Company, to the effect that registration is not required
in connection with such disposition. Any Preferred Shares
sold to the Company may not be reissued or resold.
(b) The Company agrees to issue certificates
representing the Preferred Shares or Conversion Shares
without the legend referenced in Section 4.02(a) above at
such time as (i) the holder thereof is permitted to dispose of
such Preferred Shares or Conversion Shares pursuant to
Rule 144 (k) under the Securities Act (to the extent
applicable), (ii) such Preferred Shares or Conversion
Shares are sold to a purchaser or purchasers who (in the
opinion of counsel to the seller or such purchaser(s), in
form and substance reasonably satisfactory to the
Company) are able to dispose of such securities publicly
without registration under the Act and such legend is no
longer required to be included on the certificates
representing the Preferred Shares or Conversion Shares or
(iii) such Preferred Shares or Conversion Shares are sold
pursuant to an effective registration statement under the
Securities Act.
(c) In the alternative to physical delivery of
certificates for Conversion Shares, if delivery of the
Conversion Shares pursuant to any conversion thereunder
may be effectuated by electronic book-entry through The
Depositary Trust Company ("DTC"), delivery of
Conversion Shares pursuant to such conversion shall, if
requested by the Purchaser (or holder of Conversion
Shares), settle by book-entry transfer through DTC by the
third trading day following the Date of Conversion (as
defined in the Series D Designation). The parties agree to
coordinate with DTC to accomplish this objective.
SECTION 5.03. Rules 144; Current
Information. For so long as any Preferred Shares or
Conversion Shares are outstanding, the Company will (i)
cause its Common Stock to continue to be registered under
Section 12 of the Exchange Act, file all reports required to
be filed by it under the Securities Act and the Exchange
Act and will take such further actions as the Purchaser may
reasonably request, all to the extent required from time to
time to enable the Purchaser to sell Preferred Shares and
Conversion Shares without registration under the Securities
Act pursuant to the safe harbors and exemptions provided
by Rule 144 under the Securities Act (to the extent
applicable), as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by
the Commission, and (ii) furnish the Purchaser with all
reports, proxy statements and registration statements that
the Company files with the Commission or distributes to its
securityholders pursuant to the Securities Act and the
Exchange Act at the times of such filings and distributions
(unless such documents are available electronically from
the Commission or elsewhere without charge and within a
period reasonably contemporaneous with the filing thereof
with the Commission, in which case such documents need
not be provided to the Purchaser). Upon the request of the
Purchaser, the Company will deliver to the Purchaser a
written statement as to whether it has complied with the
foregoing requirements.
<PAGE>
SECTION 5.04. Reservation of Conversion
Shares. The Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized
but unissued shares of Common Stock or its issued shares
of Common Stock held in its treasury, or both, sufficient
shares of Common Stock to provide for the issuance of the
Conversion Shares in an amount equal to the balance of the
Maximum Share Issuance (as defined in the Series D
Designation) not then yet issued.
SECTION 5.05. Stock Listing. The Company
shall endeavor to have the Conversion Shares in an amount
equal to the Maximum Share Issuance approved for
quotation or listing, prior to issuance, upon the Approved
Market (as defined in the Series D Designation) upon
which the Common Stock is listed or traded at the time of
issuance of such Conversion Shares.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Press Releases and Disclosure.
No party hereto shall issue any press release or make any
other public disclosure related to this Agreement or any of
the transactions contemplated hereby without the prior
written approval of the other party hereto, except as may be
necessary or appropriate in the opinion of the party seeking
to make disclosure to comply with the requirements of
applicable law or stock exchange rules. If any such press
release or public disclosure is so required, the party making
such disclosure shall consult with the other party prior to
making such disclosure, and the parties shall use all
reasonable efforts, acting in good faith, to agree upon a text
for such disclosure that is satisfactory to all parties.
SECTION 6.02. Expenses. Except as otherwise
expressly provided for herein, the Company will pay all of
its and all of the Purchaser's expenses (including
reasonable attorneys' fees and expenses) in connection
with the negotiation of the Transaction Documents and the
performance of due diligence by the Purchaser (whether the
transactions contemplated hereby are consummated or not)
subject to a maximum of $33,000. Such expenses of the
Purchaser shall be payable at the Closing and may be
netted against the Purchase Price otherwise payable by the
Purchaser. In addition to the foregoing, as provided in the
Registration Rights Agreement, the Company will also pay
all of its and all of the Purchaser's expenses (including
reasonable attorneys' fees and expenses) in connection
with the review of the Registration Statement contemplated
by the Registration Rights Agreement, the conduct of due
diligence in connection therewith (including the review of
opinions of counsel and comfort letters), and all matters
related thereto; the Company agrees to promptly pay such
expenses, as incurred by the Purchaser subject to a
maximum of $7,500.
SECTION 6.03. Notices. All notices, demands,
requests, consents, approvals or other communications
required or permitted to be given hereunder or that are
given with respect to this Agreement shall be in writing and
shall be personally served or deposited in the mail,
registered or certified, return receipt requested, postage
prepaid or delivered
<PAGE>
by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram,
telex or facsimile, addressed as set forth below, or to such
other address as such party shall have specified most
recently by written notice: (i) if to the Company, to: Alpha
Hospitality Corporation, 12 East 49th Street, New York,
New York 10017, Attention: Thomas Aro, Secretary,
Facsimile No.: (212) 750-5171, with copies (which shall
not constitute notice) to: Parker Duryee Rosoff & Haft, 529
Fifth Avenue, New York, New York 10017, Attention:
Herbert Kozlov, Esq., Facsimile No.: (212) 972-9487; and
(ii) if to the Purchaser:
Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by
telegram, telex or facsimile. Notice otherwise sent as
provided herein shall be deemed given on the third
business day following the date mailed or on the next
business day following delivery of such notice to a
reputable air courier service.
SECTION 6.04. Entire Agreement. This
Agreement (together with the other Transaction Documents
and all other documents delivered pursuant hereto and
thereto) constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior
and contemporaneous agreements, representations,
understandings, negotiations and discussions between the
parties, whether oral or written, with respect to the subject
matter hereof.
SECTION 6.05. Amendment and Waiver. This
Agreement may not be amended, modified, supplemented,
restated or waived except by a writing executed by the
party against which such amendment, modification or
waiver is sought to been enforced. Waivers may be made
in advance or after the right waived has arisen or the breach
or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other
agreement or provision herein contained. No waiver or
extension of time for performance of any obligations or
acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
SECTION 6.06. Assignment; No Third Party
Beneficiaries. This Agreement and the rights, duties and
obligations hereunder may not be assigned or delegated by
either the Company, on the one hand, or the Purchaser, on
the other hand, without the prior written consent of the
other party hereto; provided that the Purchaser may assign
or delegate its rights, duties and obligations hereunder to
any Affiliate of the Purchaser. Except as provided in the
preceding sentence, any purported assignment or
delegation of rights, duties or obligations hereunder made
without the prior written consent of the other party hereto
shall be void and of no effect. This Agreement and the
provisions hereof shall be binding upon and shall inure to
the benefit of each of the parties and their respective
successors and permitted assigns. This Agreement is not
intended to confer any rights or benefits on any Persons
other than as set forth above.
<PAGE>
SECTION 6.07. Severability. This Agreement
shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of
any other term or provision hereof. Furthermore, in lieu of
any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and
be valid and enforceable.
SECTION 6.08. Further Assurances. Each party
hereto, upon the request of any other party hereto, shall do
all such further acts and execute, acknowledge and deliver
all such further instruments and documents as may be
necessary or desirable to carry out the transactions
contemplated by this Agreement.
SECTION 6.09. Titles and Headings. Titles,
captions and headings of the sections of this Agreement are
for convenience of reference only and shall not affect the
construction of any provision of this Agreement.
SECTION 6.10. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY,
INTERPRETED UNDER, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED
WITHIN THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAWS THEREOF.
SECTION 6.11. Counterparts. This
Agreement may be executed in counterparts, each of which
shall be deemed an original, all of which taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed by the
undersigned, thereunto duly authorized, as of the date first
set forth above.
ALPHA HOSPITALITY CORPORATION
By:
Name:
Title:
By:
Name:
Title: Authorized Signatory
<PAGE>
Schedule 3.01
Subsidiaries
Casino Ventures, LLC, which may be deemed a subsidiary
of the Company, is a Mississippi limited liability company.
<PAGE>
Schedule 3.02
Capital Stock of the Company as of January 31, 2000
Class Shares AuthorizedShares Issued and Outstanding
Common Stock 75,000,000 16,923,399
Series A Preferred 5,000,000* -0-
Series B Preferred 821,496
(conversion ratio-8:1)
Series C Preferred
(conversion ratio-24:1) 135,162
Outstanding Options, etc. to purchase shares of Capital
Stock of the Company as of January 31, 2000
847,579 warrants (issued as part of the Company's IPO); an
additional 3,805,750 shares of common stock are issuable
upon the exercise of outstanding options, warrants and
similar rights (including, without limitation, the right
granted to Stanley Tollman to convert up to $2,000,000 of
deferred compensation into shares of Common Stock at
$2.00 per share); 6,571,968 and 3,243,888 shares of
Common Stock issuable upon conversion of the Series B
Preferred Stock and Series C Preferred Stock, respectively.
Pursuant to a letter of intent, the Company has agreed
(subject to certain terms and conditions) to issue up to
$1,750,000 of convertible preferred stock.
*5,000,000 shares of "blank check" preferred authorized,
without designation as to series.
Restrictions on voting or transfer of shares of the
Company's capital stock
None.
<PAGE>
Schedule 3.04
Violations, Breaches, Defaults for which irrevocable
waivers or consents have been received
The Company is delinquent in the issuance of shares of
Common Stock in lieu of cash dividends accrued on its
outstanding Series B and Series C Preferred Stock for 1998
and 1999. Such non-compliance has been waived to the
extent that the holders of such Preferred Stock have agreed
to the delay by the Company in issuing such shares of
Common Stock. Such holders have not, however, waived
their entitlement to such shares.
<PAGE>
Exhibit 4(e)
CERTIFICATE OF DESIGNATIONS
SETTING FORTH THE PREFERENCES, RIGHTS
AND LIMITATIONS OF SERIES D PREFERRED STOCK
OF ALPHA HOSPITALITY CORPORATION
The undersigned officers of
ALPHA HOSPITALITY CORPORATION (the
"Corporation"), a Delaware corporation, DO HEREBY
CERTIFY that, pursuant to the provisions of Sections 151
and 242 of the General Corporation Law of the State of
Delaware:
1. The name of the
Corporation is Alpha Hospitality Corporation and the
Corporation is validly existing and incorporated.
2. On February 7, 2000,
pursuant to authority vested in the Board of Directors by
Article FOURTH of the Corporation's Certificate of
Incorporation, the Board of Directors established a series of
up to 4,000 shares of Series D Preferred Stock of the
Corporation, par value $.01 per share, and adopted the
following preambles and resolutions with respect to the
Certificate of Designations of the Series D Preferred Stock:
WHEREAS, the Corporation desires to create a new series
of its Preferred Stock to be designated as "Series D
Preferred Stock";
NOW THEREFORE, it is hereby
RESOLVED, that a new series of the class of authorized
preferred stock of the Corporation, designated "Series D
Preferred Stock," be hereby created, and that the
designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other
special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof shall be
as set forth below:
Section 1. Designation and Amount; Par Value.
The shares of such series shall be designated as "Series D
Preferred Stock" and the number of shares constituting
such series shall be 4,000. The par value of each share of
the series shall be $.01. Each share of the Series D
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Preferred Stock shall have a stated value of $1,000.
Section 2. Dividends on Series D Preferred Stock.
The Corporation shall pay dividends on the stated value of
each share of the Series D Preferred Stock at the rate of 7 %
per annum, computed based on a 360-day year consisting
of twelve 30-day months; provided that the applicable
dividend rate will permanently increase to 15% per annum
upon the occurrence of the events described in the second
paragraph of Section 4(a) below. Dividends shall be
cumulative with respect to each share of the Series D
Preferred Stock while such share is outstanding. Dividends
shall be payable in arrears on the earlier to occur of (i) the
date of conversion of a share of the Series D Preferred
Stock into Common Stock (as defined in Section 4 below)
as provided herein and (ii) the Redemption Date (as defined
below). At the option of the Corporation, dividends may
be payable to the holder of shares of the Series D Preferred
Stock registered on the books of the Corporation (the
"Holder") in the form of either (i) such coin or currency of
the United States of America as at the time of payment is
legal tender for payment of public and private debts or (ii)
provided, and to the extent, that the Maximum Share
Issuance (as defined in Section 4(a) below) shall not have
occurred in respect of the shares of Series D Preferred
Stock held by such Holder, the number of full shares of
Common Stock that the amount of accrued dividends
payable would entitle such Holder to acquire based upon a
price per share equal to the Conversion Price (as defined in
Section 4(a) below) determined as if the Conversion Date
were the date on which such dividends became payable.
The Corporation shall notify the Holder in writing within
two (2) business days of the date Notice of Conversion by
the Holder is received by the Corporation or five (5)
business days prior to the Redemption Date, as applicable,
of the form in which the Corporation elects to pay
accumulated dividends. In the event the Corporation fails
to timely provide such notice, payments of dividends shall
be in Common Stock.
Section 3. Redemption.
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(a) Redemption Date; Mandatory Redemption
Date.
(1) The "Redemption Date" shall
mean, (i) in the case of a mandatory redemption, the
Mandatory Redemption Date, (ii) in the case of
redemption upon a Redemption Event (as defined
below), the date a demand for redemption is made
following such Redemption Event, or (iii) in the
case of an elective redemption in the event of a
Change of Control (as defined below), the time
immediately prior to the consummation of the
Change of Control Transaction (as defined below).
(2) The "Mandatory Redemption
Date" shall mean February 8, 2005.
(3) The "Default Redemption
Date" shall mean the date a demand for redemption
is made or deemed to be made following a
Redemption Event.
(b) Mandatory Redemption. On the
Mandatory Redemption Date, upon surrender to the
Corporation of the Holder's stock certificate
representing then outstanding shares of the Series D
Preferred Stock (the "Series D Stock Certificates"),
the Corporation shall deliver to the Holder, subject
to, and only to the extent such conversion is within
the limits of, the Maximum Share Issuance and the
9.9% Limitation (as defined in Section 4(a) below),
the number of shares of Common Stock determined
pursuant to Section 4(a) as if such Mandatory
Redemption Date were the Date of Conversion. In
the event the Maximum Share Issuance prevents
any shares of Series D Preferred Stock from being
converted in full, the dividend rate payable on any
such remaining outstanding Shares of Series D of
Preferred Stock shall permanently increase to 15%
per annum, payable in cash in arrears, semi-
annually on June 30 and December 31 of each year
to the extent such payments in cash are lawful.
(c) Other Redemption Provisions. The
Series D Preferred Stock may also be redeemed
prior to a Change of Control Transaction or
following a Redemption Event, as provided
elsewhere herein.
Section 4. Conversion.
(a) Conversion Price; Amount;
Maximum Share Issuance. Subject to this Section 4, a
Holder has the right to convert shares of the Series D
Preferred Stock, in whole or from time to time in part, into
shares of common stock, par value $.01 per share, of the
Corporation (the "Common Stock"). The price at which the Holder may convert
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shares of the Series D Preferred Stock
(or any portion thereof) into shares of Common Stock (the
"Conversion Price") shall be the lesser of (i) $6.00 (the
"Maximum Conversion Price") and (ii) the average of the
two lowest Closing Prices (as defined below) of the
Common Stock during the 30 consecutive trading days
immediately preceding (but excluding) the Date of
Conversion (as defined below) (the "Variable Conversion
Price"). The "Closing Price" with respect to the per-share
price of Common Stock on any day means the last reported
bid price regular way on NASDAQ Small Cap Market (or
the NASDAQ National Market, the New York Stock
Exchange or American Stock Exchange in the event any
such market or exchange constitutes the principal market
on which the Common Stock is quoted or listed or admitted
to trading) (such four markets and exchanges, the
"Approved Markets") or, if not quoted or listed or admitted
to trading on any such Approved Market, the closing bid
price in the over-the-counter market as furnished by any
New York Stock Exchange member firm that is selected
from time to time by the Corporation for that purpose. In
lieu of any fractional share of Common Stock to which the
Holder would otherwise be entitled upon conversion of
shares of the Series D Preferred Stock, the number of
shares of Common Stock issuable upon conversion thereof
shall be rounded up to the nearest whole number. In the
case of a dispute as to the calculation of the Conversion
Price, the Holder's calculation shall be deemed conclusive
absent manifest error.
The maximum number of shares of Common Stock
(the "Maximum Share Issuance") issuable upon conversion
of all or any shares of the Series D Preferred Stock
(including shares of Common Stock that (x) the
Corporation elects to issue in payment of dividends as
provided in Section 2 hereof and (y) the Holder elects to
receive in the form of Common Stock, if any, pursuant to
the Registration Rights Agreement (as from time to time
amended, supplemented, restated or otherwise modified,
the "Registration Rights Agreement"), dated as of the Initial
Issuance Date, between the Corporation and the original
purchaser of the Series D Preferred Stock) is 3,300,000
(subject to adjustment for stock splits, stock dividends,
reclassification or other similar events). In the event there
is more than one Holder of Series D Preferred Stock, the
unused portion of the Maximum Share Issuance shall be
allocated on a pro rata basis among the Holders based upon
the aggregate outstanding shares of Series D Preferred
Stock. As of the date on which the Maximum Share
Issuance has occurred in respect of a Holder's entire
position of shares of the Series D Preferred Stock (and
accordingly, such Holder is unable to convert its remaining
Series D Preferred Stock into shares of Common Stock),
the dividend rate payable on the remaining shares of the
Series D Preferred Stock held by such Holder shall
permanently increase to 15% per annum and shall be
payable in arrears in cash on June 30 and December 31 of
each year, to the extent payment in cash shall be lawful
(regardless of whether the allocable Maximum Share
Issuance applicable to such Holder's shares of the Series D
Preferred Stock subsequently increases as a result of
conversions by other Holders or otherwise).
Except as otherwise provided herein, the Holder
shall be entitled to convert shares
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of the Series D Preferred
Stock into Common Stock as follows: (i) during calendar
days 1 through 75 following the Initial Issuance Date, up to
25% of the Holder's original position in shares of the Series
D Preferred Stock; (ii) during calendar days 76 through 150
following the Initial Issuance Date, an amount that, when
added to that previously converted, does not exceed 50% of
the Holder's original position in shares of the Series D
Preferred Stock; (iii) during calendar days 151 through 225
following the Initial Issuance Date, an amount that, when
added to that previously converted, does not exceed 75% of
the Holder's original position in shares of the Series D
Preferred Stock; and (iv) at any time on or after the 226th
calendar day following the Initial Issuance Date, all the
remaining outstanding shares of the Series D Preferred
Stock. In the event of any transfer of the Series D Preferred
Stock prior to the 226th day following the Initial Issuance
Date, the transferring Holder and the transferee shall agree
(and notify the Corporation in writing) as to the limitation
on their respective ability to convert shares of Series D
Preferred Stock (giving effect to conversion which have
already accrued) in order to effectuate the purpose of the
foregoing sentence. The last date on which shares of the
Series D Preferred Stock may be converted is three (3)
business days prior to the Redemption Date. The foregoing
limitation on conversion shall not apply to any conversion
to the extent the Closing Price on the trading day
immediately preceding the Date of Conversion is at least
$10.00 per share (the "Minimum Release Price").
Notwithstanding any other provision of this Section
4, as of any date prior to the Redemption Date, (i) the
aggregate number of shares of Common Stock into which
all shares of the Series D Preferred Stock (inclusive of
shares of Common Stock issuable in payment of accrued
dividends) and all other securities convertible into
Common Stock held by a Holder and its affiliates shall be
convertible, together with the shares of Common Stock
then beneficially owned (as defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act"))
by such Holder and its affiliates (excluding shares of
Common Stock otherwise deemed beneficially owned as a
result of the convertibility of the shares of the Series D
Preferred Stock held by the Holder or its affiliates), shall
not exceed 4.9% of the total outstanding shares of Common
Stock as of such date. In addition, notwithstanding any
other provision of this Section 4, during any consecutive
61-day period no Holder (together with its affiliates) may
(x) convert its Series D Preferred Stock into a number of
shares of Common Stock exceeding 9.9% of the
Corporation's issued and outstanding shares of Common
Stock as of the first day of such 61-day period or sell
shares of Common Stock (whether acquired upon
conversion of the Series D Preferred Stock or otherwise in
excess of 9.9% of the Corporation's issued and outstanding
shares of Common stock as of the first day of such 61-day
period) (the "9.9% Limitation"). Notwithstanding any
other provision of this Certificate of Designations, the
foregoing limitations on conversion may not be waived,
amended or modified. The Corporation shall have no
obligation to monitor compliance with the foregoing
limitations on conversion.
(b) Mechanics of Conversion. To
convert shares of the Series D
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Preferred Stock, the Holder
must (i) complete and sign a Notice of Conversion in form
acceptable to the Corporation (the "Notice of Conversion")
and deliver the Notice of Conversion to the Corporation as
herein provided and (ii) prior to the date on which delivery
of Common Stock is required to be made hereunder, (x)
duly endorse and deliver to the Corporation the Series D
Stock Certificate(s) representing the shares of the Series D
Preferred Stock being converted and (y) pay any transfer or
similar tax with respect to the delivery of such Series D
Stock Certificate(s) if required. The Holder shall surrender
such Series D Stock Certificate(s) and the Notice of
Conversion to the Corporation (with an advance copy by
facsimile of the Notice of Conversion). The date on which
Notice of Conversion is given (the "Date of Conversion")
shall be deemed to be the date of receipt by the Corporation
of the facsimile of the Notice of Conversion, provided that
such Series D Stock Certificate(s) are received by the
Corporation within five (5) business days thereafter. The
Corporation shall not be obligated to cause the transfer
agent for the Common Stock (the "Transfer Agent") to
issue certificates evidencing the shares of Common Stock
issuable upon such conversion unless either such Series D
Stock Certificate has been received by the Corporation or,
if such Series D Stock Certificate(s) have been lost, stolen
or destroyed, the Holder has executed and delivered to the
Corporation an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in
connection with the shares of the Series D Preferred Stock
represented by such Series D Stock Certificate(s).
If the Transfer Agent is participating in the
Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, the Corporation
shall cause the Transfer Agent to transmit electronically the
shares of Common Stock issuable to the Holder upon
conversion of shares of the Series D Preferred Stock by
crediting the account of the Holder's prime broker with
DTC through DTC's Deposit Withdrawal Agent
Commission ("DWAC") system, within three (3) business
days after delivery to the Corporation of the Holder's Series
D Stock Certificate(s). In the event the Holder otherwise
elects in writing, however, the Corporation shall cause the
Transfer Agent to issue and deliver (within such three (3)
business day period) to the address of the Holder on the
books of the Corporation, as contemplated by the purchase
agreement pursuant to which the shares of the Series D
Preferred Stock being converted were issued (the
"Securities Purchase Agreement"), or as otherwise directed
pursuant to the Notice of Conversion, a certificate or
certificates for the number of shares of Common Stock to
which such Holder shall be entitled as aforesaid. In the
event the Corporation fails to complete such delivery as
aforesaid, it shall be responsible for actual damages
incurred by the Holder as a result thereof. The person or
persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of
Common Stock on such date. Notwithstanding that the
Holder is required to deliver the Series D Stock
Certificate(s), duly endorsed, within five (5) business days
after the Date of Conversion, if such Series D Certificate(s)
are not received by the Corporation within ten (10) business
days after the Date of Conversion, the Corporation may at
its option elect, by written notice given to the Holder
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within fifteen (15) business days after the Date of Conversion,
elect (A) to treat Notice of Conversion as null and void or
(B) to treat the Notice of Conversion as binding and require
the Holder to deliver the applicable Series D Stock
Certificate(s). In the event the Corporation elects to treat
the Notice of Conversion as binding, the shares of Series D
Preferred Stock with respect to which such Notice of
Conversion was given shall thereafter no longer be deemed
outstanding and the Holder thereof shall not be entitled to
any voting or other rights attendant thereto, excepting only
the right to receive, upon the delivery to the Corporation of
the applicable Series D Stock Certificate(s), the share of
Common Stock upon the conversion thereof as
contemplated above.
Following conversion of a share of the Series D
Preferred Stock, such share will no longer be outstanding
and may not be reissued. In the event of the conversion of
less than all of the shares of the Series D Preferred Stock
represented by a Series D Stock Certificate, the Corporation
or its Transfer Agent will issue to the Holder a new stock
certificate representing the number of shares of the Series D
Preferred Stock not converted or shall endorse the Series D
Stock Certificate to reflect such conversion.
(c) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve and
keep available out of its authorized but unissued shares of
Common Stock or shares of Common Stock held in
treasury, or both, solely for the purpose of effecting the
conversion of the Series D Preferred Stock, such number of
shares of Common Stock as shall from time to time be
sufficient to effect the conversion of the Series D Preferred
Stock and all other securities of the Corporation convertible
or exchangeable into Common Stock.
(d) Adjustment to Fixed Conversion
Price, Variable Conversion Price, Maximum Share
Issuance, Minimum Trigger Price and Minimum Release
Price.
(i) If, prior to the conversion of
all shares of the Series D Preferred Stock, the number of
outstanding shares of Common Stock is increased by a
stock split, stock dividend of shares of Common Stock or
other shares of capital stock, reclassification or other
similar event, the Maximum Conversion Price, if
applicable, and the Variable Conversion Price (together, the
"Conversion Prices") shall be proportionately reduced, or if
the number of outstanding shares of Common Stock is
decreased by a combination or reclassification of shares or
other similar event, the Conversion Prices shall be
proportionately increased, in each case, such that a Holder
will have the right to receive upon conversion of shares of
the Series D Preferred Stock the number of shares of
Common Stock (or other shares of capital stock) of the
Corporation (notwithstanding the limitation set forth in the
fourth paragraph of Section 4(a)) that such Holder would
have been entitled to receive had the Holder converted such
shares of the Series D Preferred Stock immediately prior to
such action. The Maximum Share Issuance, the Minimum
Trigger Price (as defined in clause (iv) below) and the
Minimum Release price shall likewise be proportionately
adjusted upon any increase in the number
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of outstanding shares of Common Stock on account of any stock split,
stock dividend of shares of Common Stock or other shares
of capital stock, reclassification or other similar event or
upon any decrease in number of outstanding shares of
Common Stock on account of any combination or
reclassification of shares or other similar event.
(ii) If, prior to the conversion of
all shares of the Series D Preferred Stock, there shall be any
merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event (a "Conversion
Reclassification Event"), as a result of which shares of
Common Stock shall be changed into the same or a
different number of shares of the Corporation or the same
or another class or classes of stock or securities of the
Corporation or another entity, then the Holder shall
thereafter have the right to receive upon conversion of
shares of the Series D Preferred Stock, upon the basis and
the terms and conditions specified herein, such shares of
stock and/or securities as may be issued or payable with
respect to or in exchange for the number of shares of
Common Stock immediately theretofore receivable upon
the conversion of such shares of the Series D Preferred
Stock (irrespective of the limitations set forth in Section
4(a)) had such Conversion Reclassification Event not taken
place, and in any such case appropriate provisions shall be
made with respect to the rights and interests of the Holder
such that the provisions hereof (including, without
limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion
of shares of the Series D Preferred Stock) shall thereafter
be applicable, as nearly as may be practicable in relation to
any shares of stock or securities thereafter deliverable upon
the conversion of shares of the Series D Preferred Stock.
The Corporation shall not effect any Conversion
Reclassification Event unless the resulting successor or
acquiring entity (if not the Corporation) assumes by written
instrument the obligation to deliver to the Holder such
shares of stock and/or securities as the Holder is entitled to
receive upon conversion in accordance with the foregoing.
(iii) In addition to the adjustments
set forth above, if the Corporation distributes to all holders
of its Common Stock any of its assets or debt securities or
any rights or warrants to purchase securities other than
Common Stock, then the Conversion Prices shall be
adjusted in such a manner as shall be agreed to by the
Corporation and the Holders of a majority of the
outstanding shares of Series D Preferred Stock as shall
fairly preserve the economic rights and benefits of each
Holder as contemplated by this Certificate of Designations.
In the event that within 15 days of any such event, the
Corporation and such Holders do not reach an agreement as
to the appropriate adjustment, the Corporation shall retain,
and pay for, a nationally recognized investment bank or
accounting firm to determine the appropriate adjustment as
soon as possible, but in any event not later than 45 days,
after the date of such event.
No adjustment to the Conversion Prices pursuant to
any of the events or circumstances set forth herein shall be
made unless such adjustment shall be in an amount of at
least five cents ($0.05); provided, however, that any adjustment that would
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otherwise be required to be made
hereunder but for the fact that it is less than five cents
($0.05) shall be carried forward and made part of any
subsequent adjustment that (a) when aggregated with prior
adjustment(s) that have not been made because it was (or
each of them was) less than five cents ($0.05) or (b) is in
excess of five cents ($0.05).
(iv) In the event that, after the
Initial Issuance Date, the Corporation shall (other
than upon the exercise, exchange or conversion of
any securities of the Corporation that are
exercisable or exchangeable for, or convertible into,
shares of Common Stock and that are outstanding as
of the Initial Issuance Date (including, without
limitation, the right granted to Stanley Tollman to
convert deferred compensation into shares of
Common Stock), upon the exercise of stock options
granted under or pursuant to any stock option plan
approved by shareholders of the Corporation, upon
the conversion of any shares of Series D Preferred
Stock or Parallel Preferred Stock (as defined in
Section 11 below) or any shares of preferred stock
issued by the Corporation prior to the Initial
Issuance Date or upon the issuance of shares of
Common Stock in lieu of cash dividends on any
shares of preferred stock of the Corporation) at any
time while any shares of the Series D Preferred
Stock are outstanding (A) issue shares of Common
Stock without consideration (other than in the form
of a dividend) or at a price per share less than the
Closing Price on the Initial Issuance Date (such
Closing Price, the "Minimum Trigger Price") (B)
issue options, rights or warrants to subscribe for or
purchase Common Stock that provide for (upon the
exercise thereof) the issuance of shares of Common
Stock without consideration or at a price per share,
which when added to the price or other
consideration received for such options, rights or
warrants, is less than the Minimum Trigger Price or
(C) issue securities convertible into Common Stock
having a conversion price less than the Minimum
Trigger Price, the Conversion Prices to be in effect
after the date of such issuance shall be adjusted by
multiplying the Conversion Prices in effect
immediately prior to the date of any such issuances
referenced above by a fraction, of which the
numerator shall be the number of shares of
Common Stock outstanding on the date of such
issuance plus the number of shares of Common
Stock that the aggregate offering price of the total
number of shares of Common Stock so to be issued
(or the aggregate issue price of the convertible
securities so to be issued) would purchase at the
Minimum Trigger Price and of which the
denominator shall be the number of shares of
Common Stock outstanding on the date of such
issuance plus the number of additional shares of
Common Stock to be issued (or into which the
convertible securities so to be issued are initially
convertible). In case the price for such securities
may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such
consideration shall be as determined in good faith
by the Board of Directors of the Corporation, whose
determination shall be conclusive. Such adjustment
shall be made successively whenever the date of
such issuance is fixed and, in the event that such
options, rights, warrants or convertible securities (or
portions thereof)
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expire or are otherwise discharged
or redeemed without being exercised or converted,
any adjustment in the Conversion Prices on account
of the issuance of the same shall be reversed.
(v) Adjustments to the Maximum
Conversion Price pursuant to this Section 4, subject
to subsection (i) above and the last sentence of
subsection (ii) above, shall be permanent.
Adjustment to the Variable Conversion Price
pursuant to this Section 4 shall be made only to the
extent an event requiring adjustment occurs during
the period that the Variable Conversion Price is
required to be calculated to determine the
Conversion Price by making adjustments to the
applicable Closing Prices within such period.
(vi) If any adjustment under this
Section 4(d) would create a fractional share of
Common Stock or a right to acquire a fractional
share of Common Stock, such fractional share shall
be disregarded and the number of shares of
Common Stock issuable upon conversion shall be
the next higher number of shares.
(e) Adjustments or Additions to Rights
Attendant to Series D Preferred Stock. If at any time after
the Initial Issuance Date, the Corporation shall issue a class
or series of preferred stock that is convertible into Common
Stock at varying prices based upon the market price of the
Common Stock at the time of conversion ("New Preferred
Stock"), which new class or series contains terms which the
Holder determines are more favorable than the terms of the
Series D Preferred Stock, each Holder may elect to have
all, but not less than all, of such terms replace the
applicable provisions set forth herein. In the event such
election is not made, the antidilution provisions of Section
4(d) shall apply. The Corporation shall advise each Holder
of the terms of any New Preferred Stock within five (5)
business days of the issuance thereof, and each Holder shall
have thirty (30) business days after receipt of such notice to
make such election; such election to be effective
immediately upon notice by such Holder to the
Corporation.
Section 5. Redemption Events.
(a) A "Redemption Event" occurs if:
(1) the Corporation defaults in effecting
a conversion of shares of the Series D Preferred
Stock in accordance with the provisions hereof
(provided such default was (i) voluntarily caused or
permitted by the Corporation, (ii) not due to some
legal inability and (iii) otherwise within the
Corporation's reasonable control) and such default
continues for a period of 10 days; or
(2) the Corporation defaults in the
payment of the stated value of or dividends on the
Series D Preferred Stock when due (provided such default was
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(i) voluntarily caused or permitted by
the Corporation, (ii) not due to some legal inability
and (iii) otherwise within the Corporation's
reasonable control) and any such default continues
for a period of 10 days.
(b) If a Redemption Event occurs and is
continuing, the Holder of shares of the Series D Preferred
Stock may demand that the Corporation redeem its shares
in cash at a price equal to 125% of (i) the stated value plus
(ii) dividends accumulated thereon until such date of
redemption.
Section 6. Change of Control.
A "Change of Control Transaction" shall
mean, (i) the sale, conveyance or disposition of all or
substantially all of the assets of the Corporation, (ii) a
consolidation or merger of the Corporation with or into any
other "Person" (as defined in the Exchange Act) (whether
or not the Corporation is the surviving Person, but other
than a merger or consolidation whereby the stockholders of
the Corporation immediately preceding the merger or
consolidation continue to own greater than 50% of the
voting power attributable to the capital stock of the
surviving Person in such merger or consolidation that is
normally entitled to vote in the election of directors,
managers or trustees, as applicable) or, (iii) any Person or
any "group" (as such term is used in Section 13(d) of the
Exchange Act), becomes the beneficial owner or is deemed
to beneficially own (as described in Rule 13d-3 under the
Exchange Act without regard to the 60-day exercise period)
in excess of 50% of the Corporation's voting power of the
capital stock of the Corporation normally entitled to vote in
the election of directors of the Corporation (other than (A)
any Person or any such group that held such voting power
as of the Initial Issuance Date or (B) any group that holds
such voting power subsequent to the Initial Issuance Date,
provided that the Persons that constitute such group include
the Person or a majority of the members of, and at least
50% of the voting power held by, a group referenced in the
foregoing clause (A)).
Upon the notice or occurrence of, or announcement
of the Corporation's intent (or a third party's or parties'
intent in the case of Change of Control Transaction of the
type set forth in clause (iii) of the definition of a Change of
Control Transaction) to engage in, a Change of Control
Transaction, then, the Series D Preferred Stock shall
thereupon be convertible in full, notwithstanding any
limitations set forth in Section 4 hereof other than the 9.9%
Limitation; provided that the Holder's ability to convert the
Series D Preferred Stock shall cease three (3) trading days
prior to the consummation of a Change of Control
Transaction of the type set forth in clauses (i) and (ii) of the
definition thereof. In addition, upon either the notice of, or
the announcement of the Corporation's intent to engage in,
a Change of Control Transaction (of the type set forth in
clauses (i) and (ii) of the definition thereof), the Holder
shall have the right, up to and including the third trading
day prior to the date of effectiveness of such Change of
Control Transaction, to elect to convert the Series D
Preferred Stock (subject to the 9.9% Limitation) into a
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number of shares equal to 125% of the amount into which
such Series D Preferred Stock would otherwise be
convertible, which conversion, in the case of such Change
of Control Transaction, shall be conditioned upon and shall
be effective immediately prior to consummation of such
Change of Control Transaction. If the Holder does not
make such an election, the outstanding shares of Series D
Preferred Stock shall be deemed automatically converted
into shares of Common Stock immediately prior to the
consummation of such Change of Control Transaction, and
the Holder shall receive the same consideration that a
holder of Common Stock is entitled to receive in
connection with such Change of Control Transaction as if it
held shares of Common Stock as of such date.
The Corporation shall promptly mail written notice
to the Holder of either the occurrence of, or the
announcement of the Corporation's intent to engage in, a
Change of Control Transaction (with a copy sent by
facsimile), but in any event such notice (other than, if
applicable, in the case of a Change of Control Transaction
of the type set forth in clause (iii) of the definition of a
Change of Control Transaction) shall not be given less than
twenty (20) days prior to the effective date of such Change
of Control Transaction.
Section 7. Reacquired Shares.
Any shares of the Series D Preferred Stock
redeemed, purchased, converted or otherwise acquired by
the Corporation in any manner whatsoever shall not be
reissued as part of the Series D Preferred Stock and shall be
retired promptly after the acquisition thereof. All such
shares of the Series D Preferred Stock upon their retirement
and the filing of any certificate required in connection
therewith pursuant to the Delaware General Corporation
Law shall become authorized but unissued shares of
Preferred Stock.
Section 8. Equality.
All Holders of Series D Preferred Stock
shall be subject to the same terms and conditions as set
forth herein. No Holders of Series D Preferred Stock shall
be entitled to or receive terms that are more favorable than
those given to any other Holder of Series D Preferred
Stock. In the event a Holder of Series D Preferred Stock is
given by the Corporation or receives from the Corporation
terms more favorable than those given by the Corporation
or received from the Corporation by any other Holder of
Series D Preferred Stock, then in such event all Holders of
Series D Preferred Stock shall be given and entitled to
those more favorable terms.
Section 9. Registered Holder.
The Corporation may for all purposes treat
the holder of shares of the Series D Preferred Stock
registered on the books of the Corporation as the Holder,
<PAGE>
notwithstanding any notice or claim by any other Person
with respect to any interest in such shares.
Section 10. Voting Rights.
(a) Prior to conversion thereof, Holders of
the Series D Preferred Stock shall not be entitled to any of
the rights of a holder of Common Stock, including without
limitation, the right to vote or to attend any meetings of
common stockholders or any other proceedings of the
Corporation and shall only be entitled to such voting rights
as are provided by Delaware law and as set forth in clause
(b) below.
(b) So long as any shares of Series D
Preferred Stock are outstanding, the Corporation shall not,
without first obtaining the approval of the Holders of
majority of the outstanding shares of Series D Preferred
Stock; (A) alter or change the rights, preferences or
privileges of the Series D Preferred Stock; (B) alter or
change the rights, preferences or privileges of any capital
stock of the Corporation so as to affect adversely the Series
D Preferred Stock; (C) create or issue any Senior Securities
(except as provided in Section 11 below); (D) create or
issue any Pari Passu Securities (as defined in Section 11
below) other than any additional series of preferred stock
that has terms (other than the amount of the maximum
conversion price) identical or substantially identical to the
terms of the Series D Preferred Stock and the outstanding
shares of which shall not have an aggregate stated value in
excess of three million dollars ($3,000,000) and a
maximum conversion price which is not set at a discount to
the Closing Price of the Common Stock as the trading date
immediately preceding the date of issuance thereof above
the discount that the Maximum Conversion Price bears to
the Closing Price on the trading day immediately preceding
the Initial Issuance Date (such additional series of preferred
stock, the "Parallel Preferred Stock"); (E) increase the
authorized number of shares of Series D Preferred Stock;
(F) do any act or thing not authorized or contemplated by
this Certificate of Designation that would result in any
taxation with respect to the Series D Preferred Stock under
Section 305 of the Internal Revenue Code of 1986, as
amended, or any comparable provision of the Internal
Revenue Code as hereafter from time to time amended, (or
otherwise suffer to exist any such taxation as a result
thereof). Notwithstanding the foregoing, any Holder (and
all of its, his or her successors and assigns) shall be bound
by any waiver or other amendment, modification or other
agreement set forth in writing and signed by such Holder or
otherwise obtained in accordance with the immediately
preceding sentence.
Section 11. Rank.
All shares of the Series D Preferred Stock
shall rank (i) prior to the Common Stock; (ii) prior to any
class or series of capital stock of the Corporation hereafter
created other than the Senior Preferred Stock, the Parallel
Preferred Stock and any other series or class of capital
stock of the Corporation (A) that has been consented to
<PAGE>
by the Holders of a majority of the outstanding shares of
Series D Preferred Stock, and (B) that specially, by its
terms, ranks senior to or pari passu with the Series D
Preferred Stock) (the Common Stock and any other class or
series of capital stock of the Corporation hereafter created
(other than the Senior Preferred Stock and the Parallel
Preferred Stock) that does not specifically, by its terms,
rank senior to or pari passu with the Series D Preferred
Stock being hereinafter referred to collectively as "Junior
Securities"); (iii) pari passu with the Parallel Preferred
Stock and any other class or series of capital stock of the
Corporation hereafter created (A) that has been consented
to by the Holders of a majority of the outstanding shares of
Series D Preferred Stock and (B) that, specifically by its
terms, ranks on parity with the Series D Preferred Stock
(the "Pari Passu Securities"); and (iv) junior to the
Corporation's Series B and Series C Preferred Stock, the
Senior Preferred Stock and any other class or series of
capital stock of the Corporation hereafter created, (A) that
has been consented to by the Holders of a majority of the
outstanding shares of Series D Preferred Stock and (B) that
specifically, by its terms, ranks senior to the Series D
Preferred Stock (all of the foregoing, collectively, the
"Senior Securities"), in each case as to distribution of assets
upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary. In the
event the Board of Directors of the Corporation, in order to
raise funding or financing all or substantially all of the net
proceeds of which are to be applied or used in the
development of the proposed casino and related projects of
the Corporation and/or its subsidiaries and other affiliates
in the Monticello, New York region deems it in the best
interests of the Corporation and its shareholders that the
Corporation issue one or more series of preferred stock
(which shall not be convertible into Common Stock based
on a variable market price) ranking senior to the Series D
Preferred Stock, the Corporation shall be entitled to do so
and the Holders of the Series D Preferred Stock, shall be
deemed to have consented to the issuance of each such
series and that such series shall rank senior to the Series D
Preferred Stock (any such series of preferred stock, "Senior
Preferred Stock").
<PAGE>
Section 12. Liquidation Preference.
A. LIQUIDATION OF THE
CORPORATION. If the Corporation shall commence a
voluntary case under the U.S. Federal bankruptcy laws or
any other applicable bankruptcy, insolvency or similar law,
or consent to the entry of an order for relief in an
involuntary case under any law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Corporation or
of any substantial part of its property, or make an
assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they
become due, or if a decree or order for relief in respect of
the Corporation shall be entered by a court having
jurisdiction in the premises in an involuntary case under the
U.S. Federal bankruptcy laws or any other applicable
bankruptcy, insolvency or similar law resulting in the
appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the
Corporation or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any
such decree or order shall be unstayed and in effect for a
period of sixty (60) consecutive days and, on account of
any such event, the Corporation shall liquidate, dissolve or
wind up, or if the Corporation shall otherwise liquidate,
dissolve or wind up (a "Liquidation Event"), no distribution
shall be made to the holders of any shares of capital stock
of the Corporation (other than Senior Securities and,
together with the Holders of Series D Preferred Stock, the
Pari Passu Securities) upon liquidation, dissolution or
winding up unless prior thereto the Holders shall have
received the Liquidation Preference (as hereinafter defined)
with respect to each share of Series D Preferred Stock. If,
upon the occurrence of a Liquidation Event, the assets and
funds available for distribution among the Holders and
holders of Pari Passu Securities shall be insufficient to
permit the payment to such Holders of the preferential
amounts payable thereon, then the entire assets and funds
of the Corporation legally available for distribution to the
Series D Preferred Stock and the Pari Passu Securities shall
be distributed ratably among such shares in proportion to
the ratio that the Liquidation Preference payable on each
such share bears to the aggregate Liquidation Preference
payable on all such shares.
B. CERTAIN ACTS NOT A
LIQUIDATION. The purchase or redemption by the
Corporation of stock of any class or series, in any manner
permitted by law, shall not, for the purposes hereof, be
regarded as a liquidation, dissolution or winding up of the
Corporation. Neither the consolidation or merger of the
Corporation with or into any other entity nor the sale or
transfer by the Corporation of less than substantially all of
its assets shall, for the purposes hereof, be deemed to be a
liquidation, dissolution or winding up of the Corporation.
C. DEFINITION OF LIQUIDATION
PREFERENCE. The "Liquidation Preference" with respect
to a share of Series D Preferred Stock means an amount
equal to the stated value thereof plus any other amounts
that may be due from the Corporation with respect thereto
pursuant to this Certificate of Designation, the Securities
<PAGE>
Purchase Agreement or the Registration Rights Agreement.
The Liquidation Preference with respect to any Pari Passu
Securities shall be as set forth in the Certificate of
Designation filed in respect thereof and, as applicable, any
other agreements related thereto.
Section 13. Lost or Destroyed Certificates.
If a Series D Stock Certificate shall be
mutilated, lost, stolen or destroyed, the Corporation shall
execute and deliver, in exchange and substitution for and
upon cancellation of such mutilated Series D Stock
Certificate, or in lieu of or in substitution for a lost, stolen
or destroyed Series D Stock Certificate, a new Series D
Stock Certificate for the Series D Stock Certificate so
mutilated, lost, stolen or destroyed, but only upon receipt of
evidence of such loss, theft or destruction of such Series D
Stock Certificate, and of the ownership thereof, and
indemnity, if requested, all reasonably satisfactory to the
Corporation.
Section 14. Certain Definitions.
(a) Business Day. For purposes hereof,
the term "business day" shall mean any day on which banks
are generally open for business in the City of New York.
(b) Trading Day. For purposes hereof,
the term "trading day" shall mean any day on which the
principal market on which the Common Stock is traded is
open for business.
(c) Person. For purposes hereof, the
term "Person" means an individual or a corporation,
partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company,
governmental authority or other entity of any kind.
Section 15. Waiver.
Any waiver by the Corporation or a Holder
of a breach of any provision of this Certificate of
Designations shall not operate as or be construed to be a
waiver of any other breach of such provision or of any
breach of any other provision of the Series D Preferred
Stock. The failure of the Corporation or the Holder to
insist upon strict adherence to any term of this Certificate
of Designations on one or more occasions shall not be
considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any
other term of this Certificate of Designations of the Series
D Preferred Stock. Any waiver must be in writing.
Section 16. Unenforceable Provisions.
If any provision of this Certificate of
Designations is invalid, illegal
<PAGE>
or unenforceable, the
remaining provisions of thereof shall remain in effect, and
if any provision is inapplicable to any Person or
circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances.
Section 17. Copies of Agreements, Instruments,
Documents.
Copies of any of the agreements,
instruments or other documents referred to in this
Certificate of Designations shall be furnished to any Holder
of Series D Preferred Stock upon written request to the
Corporation at its principal place of business.
Section 18. Notices.
All notices, demands, requests, consents,
approvals or other communications required or permitted to
be given hereunder or that are given with respect to the
Series D Preferred Stock shall be in writing and shall be
personally served or deposited in the mail, registered or
certified, return receipt requested, postage prepaid, or
delivered by reputable air courier service with charges
prepaid, or transmitted by hand delivery, telegram, telex or
facsimile, addressed as set forth below: (i) if to the
Corporation, to: Alpha Hospitality Corporation, 12 East
49th Street, New York, New York 10017, Attention:
Thomas Aro, Secretary, Facsimile No.: (212) 750-5171 (or
to such other address of which notice has been given as
herein provided, with copies (which shall not constitute
notice) to: Parker Duryee Rosoff & Haft, 529 Fifth
Avenue, New York, New York 10017, Attention: Herbert
F. Kozlov, Esq., Facsimile No.: (212) 972-9487; and (ii) if
to the Holder, to the address of the registered holder
according to the books and records of the Corporation or its
transfer agent. Notice shall be deemed given on the date so
served, deposited for mailing, transmitted by hand delivery,
telegram, telex or facsimile or delivered to a reputable air
courier for delivery as contemplated above and shall be
deemed received on the date so served, if served or
transmitted by hand delivery, telegram, telex or facsimile,
one business day after being so delivered to a reputable air
courier for delivery as contemplated above or three
business days after being so mailed as contemplated above.
IN WITNESS WHEREOF, ALPHA
HOSPITALITY CORPORATION has caused this
Certificate of Designations to be executed by its Chairman
and President and attested to by its Secretary this 7th day of
February, 2000.
ALPHA HOSPITALITY CORPORATION
Stanley S. Tollman, Chairman and President
ATTEST:
<PAGE>
Exhibit 4(f)
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION
RIGHTS AGREEMENT (this "Agreement"), dated as of
February 8, 2000, is entered into between Alpha
Hospitality Corporation, a Delaware corporation (the
"Company"), and , a bank organized under
the laws of (the "Purchaser").
WHEREAS, the Company and
the Purchaser have entered into that certain Securities
Purchase Agreement (the "Subscription Agreement"),
dated as of the date hereof, pursuant to which the Company
is issuing and selling to the Purchaser an aggregate of
4,000 shares (the "Preferred Shares") of the Company's
Series D Preferred Stock (the "Series D Shares"), which
Preferred Shares are convertible into such number of shares
(the "Shares") of Common Stock, $.01 par value per share
(the "Common Stock"), of the Company as may be
determined pursuant to the Certificate of Designations
establishing the Series D Shares (the "Series D
Designation"); and
WHEREAS, pursuant to the
terms of, and in partial consideration for, the Purchaser's
agreement to enter into the Subscription Agreement, the
Company has agreed to provide the Purchaser with certain
registration rights with respect to the Conversion Shares (as
defined below);
NOW, THEREFORE, in
consideration of the foregoing premises, the
representations, warranties, covenants and agreements
contained herein and in the Subscription Agreement and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, intending
to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
Capitalized terms used herein and defined in the
Subscription Agreement shall have the same respective
meanings herein as are ascribed to them therein. In
addition, the following terms shall have the meanings
ascribed to them below:
"Purchaser" shall mean the
Purchaser referenced in the preamble, and, unless the
context otherwise requires, shall include the Purchaser for so long
<PAGE>
as it owns any Registrable Securities and any
assignee or transferee of the Preferred Shares or
Registrable Securities to which the registration rights
conferred by this Agreement have been transferred in
compliance with this Agreement and that is the registered
holder of the Preferred Shares or the Registrable Securites,
as the case may be.
"Registrable Securities" means
all of the Shares and any other securities of the Company
that are issued or issuable upon conversion of the Preferred
Shares as provided in the Series D Designation (together,
the "Conversion Shares") until (i) a registration statement
under the Securities Act covering the offer and sale of the
Conversion Shares has been declared effective by the
Commission and the Conversion Shares have been
disposed of pursuant to such effective registration
statement, (ii) the Conversion Shares are sold under
circumstances in which all of the applicable conditions of
Rule 144 (or any similar provision then in force) under the
Securities Act ("Rule 144") are met, (iii) such Conversion
Shares have been otherwise transferred and the Company
has delivered a new certificate or other evidence of
ownership for the Conversion Shares not bearing a
restrictive legend or (iv) such time as, in the opinion of
counsel to the Company, which counsel shall be reasonably
acceptable to the Purchaser, such Conversion Shares may
be sold without any time, volume or manner limitation
pursuant to Rule 144(k) (or any similar provision then in
effect) under the Securities Act.
"Registration Statement" means
the registration statement filed by the Company pursuant to
Section 2.1(a) and any additional registration statement
filed by the Company pursuant to Section 2.1(b).
"Underwriter" means a securities
dealer that purchases any Registrable Securities as
principal in an underwritten offering and not as part of such
dealer's market-making activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. Registration
Requirements. The Company shall use its best efforts to
effect the registration of the Registrable Securities
(including without limitation the execution of an
undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would
permit or facilitate the sale or distribution of all the
Registrable Securities in the manner (including manner of
sale) and in all states reasonably requested by the
Purchaser. Such best efforts by the Company shall include
the following:
(a) The Company will as
expeditiously as possible, and in no event later than thirty
(30) days from the date of this Agreement (the "Filing
Deadline"), prepare and file with the Commission a
registration statement (the "Registration
<PAGE>
Statement") on Form S-3 (if use of such form is then available to the
Company pursuant to the rules of the Commission and, if
not, on such other form promulgated by the Commission
for which the Company then qualifies and that counsel for
the Company shall deem appropriate and which form shall
be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the provisions of
this Agreement and in accordance with the intended
method of distribution of such Registrable Securities), and
use its commercially reasonable efforts to cause such filed
Registration Statement to become effective by the
Effectiveness Deadline. The "Effectiveness Deadline"
shall mean one hundred and twenty (120) days from the
date of this Agreement; provided that such date shall be
extended for such reasonable additional number of days
(not to exceed ninety(90) days) that the Company (i) delays
the timely filing of a report previously filed under the
Exchange Act containing financial statements (or that the
Company requires in order to restate its financial
statements included in a report filed under the Exchange
Act) or (ii) delays the filing or effectiveness of the
Registration Statement in order to amend the disclosure
included in the Registration Statement, as a result of the
Company or any affiliate entering into a transaction (such
as a merger or acquisition or disposition of a business)
which transaction is required to be disclosed in the
Registration Statement or which transaction necessitates
the restatement or other modification of the financial
statements contained therein, or the occurrence of any other
event(s) or circumstance(s) that may require an amendment
or modification of the Registration Statement (together
"Delaying Events"). The Company will as expeditiously as
possible prepare and file with the Commission such
amendments and supplements to the Registration Statement
and the prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective for a
period of not less than: (i) in the case of a non-underwritten
offering of Registrable Securities, until there shall no
longer be any Registrable Securities or (ii) with respect to
an underwritten offering of Registrable Securities, ninety
(90) days after the commencement of the distribution of all
Registrable Securities covered by the Registration
Statement (but not before the expiration of the period
referred to in Section 4(3) of the Securities Act and Rule
174 thereunder, if applicable), and the Company will
comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Registration Statement during such period in accordance
with the intended methods of disposition by the Purchaser
as set forth in the Registration Statement.
(b) The number of Registrable
Securities covered by the initial Registration Statement
shall equal 3,300,000 shares of Common Stock of the
Company. In the event that in the future Registrable
Securities shall consist of securities of the Company other
than or in additional to the shares of Common Stock
referenced in the preceding sentence, the Company shall as
expeditiously as possible (and in no event more than
twenty (20) days from the date of the event that results in
such change) file a post-effective amendment to the
Registration Statement (or, if necessary file or cause to be
filed a new or additional registration statement) to reflect
the registration of the offer and resale of such additional or
other securities and use its commercially reasonable efforts
to cause such post-effective amendment or new or
additional registration
<PAGE>
statement to become effective within
ninety (90) days from the date of the event that results in
such change. In the event the filing of a new or additional
Registration Statement is required, references herein to the
registration statement shall also refer to such new or
additional registration statement (except that for purposes
of Section 2.1(a) above, the Filing Deadline and
Effectiveness Deadline shall refer to the end of the fifteen
(15) and ninety (90) day periods referenced above).
(c) The Company will, prior to
filing the Registration Statement or prospectus or any
amendment or supplement thereto, furnish to the Purchaser,
counsel to the Purchaser, and each Underwriter, if any, of
the Registrable Securities covered by such Registration
Statement copies of such Registration Statement and
prospectus or any amendment or supplement thereto as
proposed to be filed, together with exhibits thereto, which
documents will be subject to review and approval by the
foregoing persons (such approval not to be unreasonably
withheld or delayed), and thereafter furnish to the
Purchaser, its counsel and each Underwriter, if any, for
their review and comment such number of copies of such
Registration Statement, each amendment and supplement
thereto (in each case including all exhibits thereto and
documents incorporated by reference therein), the
prospectus included in such Registration Statement
(including each preliminary prospectus) and such other
documents or information as the Purchaser, its counsel or
each Underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities.
(d) The Company will use its
reasonable efforts to (i) register or qualify such Registrable
Securities under such other securities or blue sky laws of
such jurisdictions in the United States as the Purchaser may
reasonably (in light of its intended plan of distribution)
request and (ii) if applicable, cause such Registrable
Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as
may be necessary by virtue of the business and operations
of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable the
Purchaser to consummate the disposition of the Registrable
Securities; provided that the Company will not be required
to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for
the fulfillment of its obligation under this paragraph (d),
(B) subject itself to taxation in any such jurisdiction or (C)
consent or subject itself to general service of process in any
such jurisdiction.
(e) The Company will promptly
notify the Purchaser upon the occurrence of any of the
following events in respect of the Registration Statement or
related prospectus in respect of an offering of Registrable
Securities: (i) receipt of any request for additional
information by the Commission or any other federal or
state governmental authority during the period of
effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or related
prospectus; (ii) the issuance by the Commission or any
other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration
Statement or the initiation
<PAGE>
of any proceedings for that purpose; (iii) receipt of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the happening of any
event that makes any statement made in the Registration
Statement or related prospectus or any document
incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the
making of any changes in the Registration Statement,
related prospectus or documents so that (or the Company
otherwise becomes aware of any statement included in the
Registration Statement, related prospectus or documents
that is untrue in any material respect or that requires the
making of any changes in the Registration Statement,
related prospectus or documents so that), in the case of the
Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of
the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and (v) the
Company's reasonable determination that a post-effective
amendment to the Registration Statement would be
appropriate (in which event the Company will promptly
make available to the Purchaser any such supplement or
amendment to the Registration Statement and, as
applicable, the related prospectus).
(f) The Company will enter into
customary agreements (including, if applicable, an
underwriting agreement in customary form and that is
reasonably satisfactory to the Company) and take such
other actions as are reasonably required in order to expedite
or facilitate the disposition of the Registrable Securities
(the Purchaser may, at its option, require that any or all of
the representations, warranties and covenants of the
Company to or for the benefit of any applicable
Underwriter also be made to and for the benefit of the
Purchaser).
(g) The Company will make
available to the Purchaser (and will deliver to the
Purchasers's counsel) and each Underwriter, if any, subject
to restrictions imposed by the United States federal
government or any agency or instrumentality thereof,
copies of all correspondence between the Commission and
the Company, its counsel or auditors and will also make
available for inspection by the Purchaser, any Underwriter
participating in any disposition pursuant to a Registration
Statement and any attorney, accountant or other
professional retained by the Purchaser or such Underwriter
(collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers
and employees to supply all information reasonably
requested by any Inspectors in connection with the
Registration Statement. Records that the Company
determines, in good faith, to be confidential and that it
notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary in the reasonable opinion of the
<PAGE>
Inspectors to avoid or correct a misstatement or omission in
the Registration Statement or (ii) the disclosure or release
of such Records is requested or required pursuant to oral
questions, interrogatories, requests for information or
documents or a subpoena or other order from a court of
competent jurisdiction or other process; provided that prior
to any disclosure or release pursuant to clause (ii), the
Inspectors shall provide the Company with prompt notice
of any such request or requirement so that the Company
may seek an appropriate protective order or waive such
Inspectors' obligation not to disclose such Records; and,
provided further, that if failing the entry of a protective
order or the waiver by the Company permitting the
disclosure or release of such Records, the Inspectors, upon
written advice of counsel, are compelled to disclose such
Records, the Inspectors may disclose that portion of the
Records which counsel has advised the Inspectors that the
Inspectors are compelled to disclose. The Company may
require, as a condition to the disclosure to any Inspector of
any confidential information, that such Inspector execute
and deliver to the Company a written agreement, in form
and substance reasonably satisfactory to the Company,
pursuant to which such Inspector agrees to the confidential
treatment of such information as contemplated above. The
Purchaser agrees that information obtained by it as a result
of such inspections (not including any information obtained
from a third party who, is not prohibited from providing
such information by a contractual, legal or fiduciary
obligation to the Company) shall be deemed confidential
and shall not be used by it as the basis for any market
transactions in the securities of the Company or its
Affiliates unless and until such information is made
generally available to the public. The Purchaser further
agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential.
(h) The Company will furnish to
the Purchaser and to each Underwriter, if any, a signed
counterpart, addressed to the Purchaser and such
Underwriter, of (1) an opinion or opinions of counsel to the
Company, and (2) a comfort letter or comfort letters from
the Company's independent public accountants, each in
customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the
case may be, as the Purchaser or the managing Underwriter
therefor reasonably requests. The Company agrees that, (x)
upon effectiveness of the Registration Statement and (y) if
requested by the Purchaser, upon the effectiveness of each
amendment thereto subsequent to effectiveness of the
Registration Statement, whether by the filing of a post-
effective amendment thereto or the incorporation by
reference of reports subsequently filed with the
Commission, it will cause to be delivered to the Purchaser
(i) if applicable, a comfort letter in customary form from its
independent public accountants and (ii) if applicable, an
opinion of counsel to the Company, covering customary
matters, including the absence of any untrue statement of a
material fact or omission to state any material fact required
to be stated therein or necessary to make the statements
contained in the Registration Statement and in the case of
the related prospectus (as so amended), in light of
circumstance in which they were made, not misleading.
<PAGE>
(i) The Company will comply
with all applicable rules and regulations of the
Commission, including, without limitation, compliance
with applicable reporting requirements under the Exchange
Act, and will make available to its security holders, as soon
as reasonably practicable, an earning statement covering a
period of twelve (12) months, beginning within three (3)
months after the effective date of the Registration
Statement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(j) The Company will appoint a
transfer agent and registrar for all the Registrable
Securities covered by the Registration Statement not later
than the effective date of the Registration Statement.
(k) The Company shall take all
steps necessary to enable the Holders to avail themselves of
the prospectus delivery mechanism set forth in Rule 153
(or successor thereto) under the Securities Act, if available.
(l) In connection with an
underwritten offering, the Company will cooperate, to the
extent reasonably requested by the managing Underwriter
for the offering or the Purchaser, in customary efforts to
sell the securities under the offering, including, without
limitation, participating in "road shows" on a schedule as
shall be reasonably satisfactory to, and not unduly
burdensome on, the Company; provided that the Company
shall not be obligated to participate in more than one such
offering in any twelve (12)-month period and any such
participation by the Company shall be at the expense of the
managing Underwriter or the Purchaser unless the
Company shall also be offering securities in such
underwritten offering.
The Company may require the
Purchaser promptly to furnish in writing to the Company
such information regarding the intended methods of
distribution of the Registrable Securities as the Company
may from time to time reasonably request and such other
information as may be legally required in connection with
such registration, including, without limitation, all such
information as may be requested by the Commission or the
NASD or any state securities commission or similar
authority. If the Purchaser fails to provide such
information requested in connection with such registration
within ten (10) business days after receiving such written
request, then the Company may cease pursuit of such
registration until such information is provided.
The Purchaser agrees that, upon
receipt of any notice from the Company of the happening
of any event of the kind described in Section 2.1(e) hereof,
the Purchaser will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration
Statement until the Purchaser's receipt of the copies of the
supplemented or amended prospectus contemplated by
Section 2.1(e)(iv) hereof, and, if so directed by the
Company, the Purchaser will deliver to the Company all
copies, other than permanent file copies then in the
Purchaser's possession, of the most recent prospectus
covering the Registrable Securities at the time of receipt of
such notice.
<PAGE>
SECTION 2.2. Registration
Expenses. In connection with registration hereunder, the
Company shall pay the following registration expenses
incurred in connection therewith (the "Registration
Expenses"): (i) all registration and filing fees, (ii) fees and
expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of a single
firm of counsel in connection with blue sky qualifications
of the Registrable Securities), (iii) printing expenses, (iv)
the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the
fees and expenses incurred in connection with the listing or
quotation of the Registrable Securities, (vi) fees and
disbursements of counsel for the Company and customary
fees and expenses for independent certified public
accountants retained by the Company (including the
expenses of any (A) opinion letters or costs associated with
delivery by counsel to the Company of an opinion letter or
opinion letters or (B) comfort letters or costs associated
with the delivery by independent certified public
accountants of a comfort letter or comfort letters, in each
case required by or requested pursuant to Section 2.1(h)
hereof), (vii) the fees and expenses of any special experts
retained by the Company in connection with such
registration and (viii) reasonable fees and expenses of a
single firm of counsel of the Purchaser with respect to such
registration (including without limitation its review of the
Registration Statement and due diligence with respect
thereto and related matters through the period that
registration is required hereunder) as contemplated by the
Subscription Agreement. The Company shall have no
obligation to pay any underwriting fees, discounts or
commissions attributable to the sale of Registrable
Securities, or the cost of any special audit required by the
Purchaser, such costs to be borne by the Purchaser.
ARTICLE III
PAYMENTS BY THE COMPANY
SECTION 3.1 Payments by
the Company. In the event the Registration Statement is
not filed by the Filing Deadline or declared effective by the
Effectiveness Deadline (or after the Registration Statement
has been declared effective by the Commission, sales of all
the Registrable Securities (including any Registrable
Securities required to be registered pursuant to Section
2.1(b) hereof) cannot be made pursuant to the Registration
Statement (by reason of a stop order, the Company's failure
to update the Registration Statement, the need to file and
have declared effective a post-effective amendment or any
other reason outside the control of the Purchaser), then the
Company will make payments to the Purchaser in such
amounts and at such times as shall be determined pursuant
to this Section 3.1 as partial relief for the damages to the
Purchaser by reason of any such delay in or reduction of
their ability to sell the Registrable Securities (which
remedy shall not be exclusive of any other remedies
available at law or in equity), provided that, in the event of
a Delaying Event requires the filing of a post-effective
amendment to the Registration Statement, no payment shall be
<PAGE>
required to the extent sales of Registrable Securities
cannot be made pursuant to the Registration Statement for
periods aggregating no more than ninety (90) days in any
365-day period. The Company shall pay to the Purchaser
an amount equal to (i) (A) .01 times (B) the aggregate
stated value of Preferred Shares held by the Purchaser
(including, without limitation, Preferred Shares that have
been converted into Registrable Securities then held by
such Purchaser but excluding any Preferred Shares as to
which the Registrable Securities received upon conversion
have been sold) times (ii) the sum of: (A) the number of
months (prorated per day for partial months) following the
Filing Deadline that the Registration Statement is not filed
pursuant to Section 2.1(a) or following the Effectiveness
Deadline that the Registration Statement is not declared
effective by the Commission, as the case may be, plus (B)
the number of months (prorated per day for partial months)
following the Effectiveness Deadline that sales cannot be
made pursuant to the Registration Statement after the
Registration Statement has been declared effective. Such
amounts shall be paid in cash or, at the Purchaser's option,
may be received (subject to the Maximum Share Issuance,
as defined in the Series D Designation) in a number of
shares of Common Stock as determined based upon the
applicable Conversion Price (as defined in the Series D
Designation) on each date that such payment is due. Any
shares of Common Stock so issued shall constitute
Registrable Securities. If the Purchaser desires to receive
the amounts due hereunder in shares of Common Stock, it
shall so notify the Company in writing at least two (2)
business days prior to the date on which such amounts are
payable, and such shares of Common Stock shall be
delivered on the last day upon which the cash amount
would otherwise be due in accordance with the following
sentence. Payments of cash pursuant hereto shall be made
within three (3) business days after the end of the period
that gives rise to such obligation, provided that, if any such
period extends for more than thirty (30) days, payments
shall be made for each such thirty (30) day period within
three (3) business days after the end of such thirty (30) day
period.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1.
Indemnification by the Company. The Company agrees
to indemnify and hold harmless the Purchaser, its partners,
Affiliates, officers, directors, employees and duly
authorized agents, and each Person or entity, if any, who
controls the Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act,
together with the partners, Affiliates, officers, directors,
employees and duly authorized agents of such controlling
Person or entity (collectively, the "Controlling Persons"),
from and against any loss, claim, damage, liability,
reasonable attorneys' fees, costs or expenses and costs and
expenses of investigating and defending any such claim
(collectively, "Damages"), joint or several, and any action
in respect thereof to which the Purchaser, its partners,
Affiliates, officers, directors, employees and duly
authorized agents, and any such Controlling Person may
become subject under the Securities Act or otherwise,
insofar as such Damages (or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
<PAGE>
statement of a material fact contained in any
Registration Statement or prospectus relating to the
Registrable Securities or any preliminary prospectus, or
arises out of, or are based upon, any omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
(in the case of any prospectus or preliminary prospectus, in
light of the circumstances in which they were made) not
misleading, except insofar as the same are based upon
information furnished in writing to the Company by the
Purchaser or an Underwriter expressly for use therein, and
shall reimburse the Purchaser, its partners, Affiliates,
officers, directors, employees and duly authorized agents,
and each such Controlling Person for any reasonable legal
and other expenses reasonably incurred by the Purchaser,
its partners, Affiliates, officers, directors, employees and
duly authorized agents, or any such Controlling Person in
investigating or defending or preparing to defend against
any such Damages or proceedings as such expenses are
incurred; provided, however, that the Company shall not be
liable to the Purchaser to the extent that any such Damages
arise out of or are based upon an untrue statement or
omission made in any preliminary prospectus if (i) the
Purchaser failed to send or deliver a copy of the final
prospectus with or prior to the delivery of written
confirmation of the sale by the Purchaser to the Person
asserting the claim from which such Damages arise, and
(ii) the final prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or
alleged omission; provided further, however, that the
Company shall not be liable in any such case to the extent
that any such Damages arise out of or are based upon an
untrue statement or alleged untrue statement or omission or
alleged omission in any prospectus if (x) such untrue
statement or omission or alleged omission is corrected in
an amendment or supplement to such prospectus and (y)
having previously been furnished by or on behalf of the
Company with copies of such prospectus as so amended or
supplemented, the Purchaser thereafter fails to deliver such
prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the
Person asserting the claim from which such Damages arise.
The Company also agrees to indemnify any Underwriters
of the Registrable Securities, their officers and directors
and each Person or entity who controls such Underwriters
on customary terms.
SECTION 4.2.
Indemnification by the Purchaser. The Purchaser agrees
to indemnify and hold harmless the Company, its partners,
Affiliates, officers, directors, employees and duly
authorized agents and each Person or entity, if any, who
controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act,
together with the partners, Affiliates, officers, directors,
employees and duly authorized agents of such controlling
Person, to the same extent as the foregoing indemnity from
the Company to the Purchaser, but only with reference to
information related to the Purchaser or its plan of
distribution furnished in writing by the Purchaser or on the
Purchaser's behalf expressly for use in any registration
statement or prospectus relating to the Registrable
Securities, or any amendment or supplement thereto, or any
preliminary prospectus. In case any action or proceeding
shall be brought against the Company or its partners,
Affiliates, officers, directors, employees or duly authorized
agents or any such controlling Person or its partners, Affiliates, officers,
<PAGE>
directors, employees or duly authorized
agents, in respect of which indemnity may be sought
against the Purchaser, the Purchaser shall have the rights
and duties given to the Company, and the Company or its
partners, Affiliates, officers, directors, employees or duly
authorized agents, or such controlling Person, or its
partners, Affiliates, officers, directors, employees or duly
authorized agents, shall have the comparable rights and
duties given to the Purchasers by Section 4.1. The
Purchaser also agrees to indemnify and hold harmless any
Underwriters of the Registrable Securities with reference to
the same information as to which it agrees to indemnify the
Company referenced above, their officers and directors and
each Person who controls such Underwriters on customary
terms. The Company shall be entitled to receive
indemnities on customary terms from Underwriters, selling
brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same
extent as provided above, with respect to information so
furnished in writing by such persons specifically for
inclusion in any prospectus or the Registration Statement.
SECTION 4.3. Conduct of
Indemnification Proceedings. Promptly after receipt by
any person or entity in respect of which indemnity may be
sought pursuant to Section 4.1 or 4.2 (an "Indemnified
Party") of notice of any claim or the commencement of any
action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the Person against whom such
indemnity may be sought (an "Indemnifying Party"), notify
the Indemnifying Party in writing of the claim or the
commencement of such action; in the event an Indemnified
Party shall fail to give such notice as provided in this
Section 4.3 and the Indemnifying Party to whom notice
was not given was unaware of the proceeding to which
such notice would have related and was materially
prejudiced by the failure to give such notice, the
indemnification provided for in Section 4.1 or 4.2 shall be
reduced to the extent of any actual prejudice resulting from
such failure to so notify the Indemnifying Party; provided,
that the failure to notify the Indemnifying Party shall not
relieve it from any liability which it may have to an
Indemnified Party otherwise than under Section 4.1 or 4.2.
If any such claim or action shall be brought against an
Indemnified Party, the Indemnifying Party shall be entitled
to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified Indemnifying
Party, to assume the defense thereof with counsel
reasonably satisfactory to the Indemnified Party. After
notice from the Indemnifying Party to the Indemnified
Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable
costs of investigation; provided that the Indemnified Party
shall have the right to employ separate counsel to represent
the Indemnified Party and its controlling persons who may
be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Indemnified Party
against the Indemnifying Party, but the fees and expenses
of such counsel shall be for the account of such
Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) in the reasonable judgment
of the Company and such Indemnified Party, representation
of both parties by the same counsel would be
<PAGE>
inappropriate due to actual or potential conflicts of interest between
them, it being understood, however, that the Indemnifying
Party shall not, in connection with any one such claim or
action or separate but substantially similar or related claims
or actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all
Indemnified Parties or for fees and expenses that are not
reasonable. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any
settlement of any claim or pending or threatened
proceeding in respect of which the Indemnified Party is or
could have been a party and indemnity could have been
sought hereunder by such Indemnified Party unless such
settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such
claim or proceeding. Whether or not the defense of any
claim or action is assumed by an Indemnifying Party, such
Indemnifying Party will not be subject to any liability for
any settlement made without its consent, which consent
will not be unreasonably withheld.
SECTION 4.4. Contribution.
If the indemnification provided for in this Article IV is
unavailable to the Indemnified Parties in respect of any
Damages referred to herein, then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages (i) as
between the Company and the Purchaser, on the one hand,
and the Underwriters, on the other hand, in such proportion
as is appropriate to reflect the relative benefits received by
the Company and the Purchaser, on the one hand, and the
Underwriters, on the other hand, from the offering of the
Registrable Securities, or if such allocation is not permitted
by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits but also the relative
fault of the Company and the Purchaser, on the one hand,
and of the Underwriters, on the other hand, in connection
with the statements or omissions which resulted in such
Damages, as well as any other relevant equitable
considerations, and (ii) as between the Company, on the
one hand, and the Purchaser, on the other hand, in such
proportion as is appropriate to reflect the relative fault of
the Company and of the Purchaser in connection with such
statements or omissions, as well as any other relevant
equitable considerations. The relative benefits received by
the Company and the Purchaser, on the one hand, and the
Underwriters, on the other hand, shall be deemed to be in
the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the
Purchaser bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as
set forth in the table on the cover page of the prospectus.
The relative fault of the Company and the Purchaser, on the
one hand, and of the Underwriters, on the other hand, shall
be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact
relates to information supplied by the Company and the
Purchaser or by the Underwriters. The relative fault of the
Company, on the one hand, and of the Purchaser, on the
other hand, shall be determined by reference to, among other things,
whether the
<PAGE>
untrue or alleged untrue statement
of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such
party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission.
The Company and the Purchaser
agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata
allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of
allocation that does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified
Party as a result of the Damages referred to in the
immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of
this Section 4.4, no Underwriter shall be required to
contribute any amount in excess of the amount by which
the total price at which the Registrable Securities
underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages
that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or
omission or alleged omission, and the Purchaser shall in no
event be required to contribute any amount in excess of the
amount by which the total price at which the Registrable
Securities of the Purchaser were offered to the public (less
underwriting discounts and commissions) less the amount
paid by the Purchaser to the Company for the Preferred
Shares exceeds the amount of any damages that the
Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent
misrepresentation.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Term. The
registration rights provided to the holders of Registrable
Securities hereunder shall terminate on such date as there
shall be no Registrable Securities; provided, however, that
the provisions of Article IV hereof shall survive any
termination of this Agreement.
SECTION 5.2. Rule 144. The
Company covenants that it will file all reports required to
be filed by it under the Securities Act and the Exchange
Act and that it will take such further action as registered
holders of Registrable Securities may reasonably request,
all to the extent required from time to time to enable the
Purchaser to sell Registrable Securities without registration
under the Securities Act
<PAGE>
within the limitation of the
exemptions provided by (a) Rule 144, as such Rule may be
amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. If at any
time the Company is not required to file such reports, it
will, upon the reasonable request of any registered holder
of Registrable Securities, make publicly available other
information so long as necessary to permit sales pursuant to
Rule 144, within the limitations of the exemption provided
thereby. Upon the request of the Purchaser, the Company
will deliver to the Purchaser a written statement as to
whether it has complied with such requirements.
SECTION 5.3. Restrictions on
Sale by the Company and Others. If, and to the extent,
reasonably requested by the managing Underwriter or
Underwriters in the case of an underwritten public offering,
that includes Registrable Securities as contemplated by
Section 2.1, the Company shall use reasonable commercial
efforts to cause its Affiliates to agree not to effect any
public sale or distribution of any securities similar to those
being registered in accordance with Section 2.1 hereof, or
any securities convertible into or exchangeable or
exercisable for such securities, during the thirty (30) days
prior to, and during the period beginning on the effective
date of the Registration Statement (except as part of the
Registration Statement) until all of the Registrable
Securities offered thereunder have been sold pursuant to
such underwritten public offering, provided, however, that
such period shall not exceed ninety (90) days.
SECTION 5.4. Amendment
and Modification. Any provision of this Agreement may
be waived, provided that such waiver is set forth in a
writing executed by the party against whom the
enforcement of such waiver is sought. The provisions of
this Agreement, including the provisions of this sentence,
may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained
the written consent of the registered holders of a majority
of the then outstanding Series D Shares (for the purposes of
determining whether the consent of such holders have been
obtained, the registered holder of Registrable Securities
shall be deemed to hold the Series D Shares that were
converted into such Registrable Securities).
Notwithstanding the foregoing, the waiver of any provision
hereof with respect to a matter that relates exclusively to
the rights of registered holders of Registrable Securities
whose securities are being resold pursuant to a Registration
Statement and does not directly or indirectly affect the
rights of other holders of Registrable Securities may be
given by holders of a majority of the Registrable Securities
being so resold; provided that the provisions of this
sentence may not be amended, modified or supplemented
except in accordance with the provisions of the
immediately preceding sentence. No course of dealing
between or among any Persons having any interest in this
Agreement will be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or
obligations of any Person under or by reason of this
Agreement.
SECTION 5.5. Successors and
Assigns; Entire Agreement. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
<PAGE>
benefit of the parties hereto and their respective successors
and assigns; provided, however, that the benefits and right
contemplated hereunder to be provided to any holder of
Series D Shares or Registrable Securities shall be limited to
the registered holder thereof. The Purchaser may assign its
rights under this Agreement to any subsequent holder of
Preferred Shares or Registrable Securities, provided that
the Company shall have the right to require any such
subsequent holder of Preferred Shares or Registrable
Securities to execute a counterpart of this Agreement as a
condition to such holder's claim to any rights hereunder.
This Agreement, together with the Subscription Agreement
and the Series D Designation sets forth the entire
agreement and understanding between the parties as to the
subject matter hereof and thereof and merges and
supersedes all prior discussions, agreements and
understandings (written or oral) of any and every nature
among them with respect to such subject matter.
SECTION 5.6. Separability.
In the event that any provision of this Agreement or the
application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent
jurisdiction, the remainder of this Agreement shall not be
affected except to the extent necessary to delete such
illegal, invalid or unenforceable provision unless that
provision held invalid shall substantially impair the
benefits of the remaining portions of this Agreement.
SECTION 5.7. Notices. All
notices, demands, requests, consents, approvals or other
communications required or permitted to be given
hereunder or that are given with respect to this Agreement
shall be in writing and shall be personally served or
deposited in the mail, registered or certified, return receipt
requested, postage prepaid, or delivered by reputable air
courier service with charges prepaid, or transmitted by
hand delivery, telegram, telex or facsimile, addressed as set
forth below, or to such other address as such party shall
have specified most recently by written notice: (i) if to the
Company, to: Alpha Hospitality Corporation, 12 East 49th
Street, New York, New York 10017, Attention: Thomas
Aro, Secretary, Facsimile No.: (212) 750-5171; with copies
(which shall not constitute notice) to: Parker Duryee Rosoff
& Haft, 529 Fifth Avenue, New York, New York 10017,
Attention: Herbert Kozlov, Esq., Facsimile No.: (212)
972-9487; and (ii) if to the Purchaser:
Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by
telegram, telex or facsimile. Notice otherwise sent as
provided herein shall be deemed given on the third
business day following the date mailed or on the second
business day following delivery of such notice by a
reputable air courier service.
SECTION 5.8. GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAW OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION 5.9. Headings. The headings in this Agreement
<PAGE>
are for convenience of reference only and shall not constitute a part of this
Agreement, nor shall they affect their meaning,
construction or effect.
SECTION 5.10. Counterparts.
This Agreement may be executed in counterparts, each of
which shall be deemed to be an original instrument and all
of which together shall constitute one and the same
instrument.
SECTION 5.11. Further
Assurances. Each party shall cooperate and take such
action as may be reasonably requested by another party in
order to carry out the provisions and purposes of this
Agreement and the transactions contemplated hereby.
SECTION 5.12. Remedies. In
the event of a breach or a threatened breach by any party to
this Agreement of its obligations under this Agreement,
any party injured or to be injured by such breach will be
entitled to specific performance of its rights under this
Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement
and granted by law. The parties agree that the provisions
of this Agreement shall be specifically enforceable, it being
agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will
be inadequate compensation for any loss and that any
defense or objection in any action for specific performance
or injunctive relief that a remedy at law would be adequate
is waived.
<PAGE>
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed
by the undersigned, thereunto duly authorized, as of the
date first set forth above.
ALPHA HOSPITALITY CORPORATION
By:
Name:
Title:
By:
Name:
Title: Authorized Signatory
