EXHIBIT 4.10
EXHIBIT A1
[Face of Note]
CUSIP/CINS ____________
7 1/8% Senior Notes due 2013
No. ___ $____________
AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.
promises to pay to _____________ or registered assigns,
the principal sum of __________________________________________________ DOLLARS
on February 15, 2013.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Dated:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc., its
general partner
By: ______________________________________
Name:
Title:
AMERICAN REAL ESTATE FINANCE CORP.
By: ______________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By: __________________________________
Authorized Signatory
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[Back of Note]
7 1/8% Senior Notes due 2013
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. American Real Estate Partners, L.P., a Delaware
limited partnership ("AREP") and American Real Estate Finance Corp. ("AREP
Finance", together with AREP, the "Company"), promises to pay interest on
the principal amount of this Note at 7 1/8% per annum from
________________, 20__ until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually in arrears on February 15 and August 15 of
each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"). Interest on
the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided further
that the first Interest Payment Date shall be _____________, 20__. The
Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess
of the rate then in effect to the extent lawful; it will pay interest
(including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest and Liquidated Damages, if any,
(without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay or cause to pay interest
on the Notes (except defaulted interest) and Liquidated Damages, if any,
to the Persons who are registered Holders of Notes at the close of
business on the February 1 or August 1 next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of
the Indenture with respect to defaulted interest. The Notes will be
payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages, if any,
may be made by check mailed to the Holders at their addresses set forth in
the register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal of
and interest, premium and Liquidated Damages, if any, on, all Global Notes
and all other Notes the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent. Such payment will be in
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.
(3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any
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Paying Agent or Registrar without notice to any Holder. The Company or any
of its Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of February 7, 2005 (the "Indenture") among the Company, the Guarantor
and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the TIA.
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured obligations of the Company.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to February 15, 2009.
On or after February 15, 2009, the Company will have the option to redeem all or
a part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed to the applicable redemption date, if redeemed during the twelve-month
period beginning on February 15 of the years indicated below, subject to the
rights of Holders on the relevant record date to receive interest on the
relevant interest payment date:
Year Percentage
- ---- ----------
2009............................................. 103.563%
2010............................................. 101.781%
2011 and thereafter.............................. 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to February 15, 2008, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including
Additional Notes) issued under the Indenture at a redemption price of 107.125%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings; provided that at least 65% of the aggregate principal
amount of Notes issued under the Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by AREP and its
Subsidiaries (including any Guarantor)) and such redemption occurs within 60
days of the date of the closing of such Equity Offering.
(6) MANDATORY REDEMPTION.
Other than in connection with redemption pursuant to Gaming Laws, the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
(7) REDEMPTION PURSUANT TO GAMING LAWS
If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:
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(1) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority; or
(2) is denied such license or qualification or not found suitable;
AREP shall then have the right, at its option:
(1) to require each such Holder or Beneficial Owner to dispose of its
Notes within 30 days (or such earlier date as may be required by the applicable
Gaming Authority) of the occurrence of the event described in clause (1) or (2)
above, or
(2) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:
(a) the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, if any, to the earlier of the date of
redemption, the date 30 days after such Holder or Beneficial Owner is required
to apply for a license, qualification or finding of suitability (or such shorter
period that may be required by any applicable Gaming Authority) if such Holder
or Beneficial Owner fails to do so ("Application Date") or of the date of denial
of license or qualification or of the finding of unsuitability by such Gaming
Authority;
(b) the price at which such Holder or Beneficial Owner acquired the Notes,
together with accrued and unpaid interest and Liquidated Damages, if any, to the
earlier of the date of redemption, the Application Date or the date of the
denial of license or qualification or of the finding of unsuitability by such
Gaming Authority; and
(c) such other lesser amount as may be required by any Gaming Authority.
Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:
(1) to exercise, directly or indirectly, through any trustee or nominee or
any other person or entity, any right conferred by the Notes, the Note Guarantee
or the Indenture; or
(2) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantee or any remuneration in any form with respect to the Notes and
the Note Guarantee from the Company, any Note Guarantor or the Trustee, except
the redemption price referred to above.
AREP shall notify the Trustee in writing of any such redemption as soon as
practicable. Any Holder or Beneficial Owner that is required to apply for a
license, qualification or a finding of suitability will be responsible for all
fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities and the Company and any Note Guarantor will not reimburse any Holder
or Beneficial Owner for such expense.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to each Holder to
repurchase all or any part (equal to $1,000
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or an integral multiple thereof) of each Holder's Notes at a purchase
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of purchase, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant interest payment date (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the
Indenture.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 15 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address, except
that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction or discharge of the Indenture. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed.
(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register
the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(11) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes or the Note Guarantees may be
amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
including Additional Notes, if any, voting as a single class, and any
existing Default or Event or Default or compliance with any provision of
the Indenture or the Notes or the Note Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture
or the Notes or the Note Guarantees may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or a Guarantor's obligations to Holders of the
Notes and Note Guarantees in case of a merger or consolidation, to make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture
under the TIA, to conform the text of the Indenture or the Notes to any
provision of the "Description of Notes" section of the Company's Offering
Memorandum dated February 1, 2005, as supplemented, relating to the
initial offering of the Notes, to the extent that such provision in that
"Description of Notes" was intended to be a verbatim recitation of a
provision of the Indenture, the Note Guarantees or the Notes; to provide
for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture,
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or to allow any Guarantor to execute a supplemental indenture to the
Indenture and/or a Note Guarantee with respect to the Notes.
(13) DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages,
if any, with respect to the Notes; (ii) default in the payment when due of
the principal of, or premium, if any, on, the Notes when the same becomes
due and payable at maturity, upon redemption (including in connection with
an offer to purchase) or otherwise, (iii) failure by the Company to comply
with Section 4.15, of the Indenture; (iv) failure by the Company or any
Guarantor to comply with Sections 4.07, 4.09, 4.16 or 4.17 for 30 days
after written notice from the Trustee, (v) failure by the Company or any
Guarantor for 60 days after written notice to the Company by the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes
including Additional Notes, if any, then outstanding voting as a single
class to comply with any of the other agreements in the Indenture or the
Notes; (vi) default under certain other agreements relating to
Indebtedness of the Company or any Guarantor which default results in the
acceleration of such Indebtedness prior to its express maturity; (vii)
certain final judgments for the payment of money that remain undischarged
for a period of 60 days; (viii) certain events of bankruptcy or insolvency
with respect to the Company or any Guarantor that is a Significant
Subsidiary and (ix) except as permitted by the Indenture, any Note
Guarantee is held in any judicial proceeding to be unenforceable or
invalid or ceases for any reason to be in full force and effect or AREH or
any other Guarantor or any Person acting on behalf of any Guarantor denies
or disaffirms its obligations under such Guarantor's Note Guarantee. If
any Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Notes
will become due and payable immediately without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. Subject to certain limitations, Holders of a majority in
aggregate principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest or premium or Liquidated Damages, if any,) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by
notice to the Trustee may, on behalf of the Holders of all of the Notes,
rescind an acceleration or waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest or premium or Liquidated
Damages, if any, on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required, upon becoming
aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
managing member), direct or indirect member, partner, employee,
incorporator or stockholder of the Company API, or the general partner of
the Company or any Guarantor or any of the Guarantors, as such, will not
have any liability for any obligations of the Company or the Guarantors
under the Notes, the Note Guarantees or the Indenture or for any claim
based on, in respect of, or by
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reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes will have all the rights set forth in the
Registration Rights Agreement dated as of February 7, 2005, among the
Company, the Guarantor and the other parties named on the signature pages
thereof or, in the case of Additional Notes, Holders of Restricted Global
Notes and Restricted Definitive Notes will have the rights set forth in
one or more registration rights agreements, if any, among the Company, the
Guarantor and the other parties thereto, relating to rights given by the
Company and the Guarantor to the purchasers of any Additional Notes
(collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes, and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed
thereon.
(20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: ________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.15 of the Indenture, check the box below:
-- Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount you elect to
have purchased:
$___________________
Date: _______________
Your Signature: _______________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: _______________________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
at maturity of this
Amount of decrease Amount of increase in Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
at maturity of at maturity of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
- ---------------- ---------------- ---------------- ------------- ---------
* This schedule should be included only if the Note is issued in global form.
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EXHIBIT A2
[Face of Regulation S Temporary Global Note]
CUSIP/CINS __________
7 1/8% Senior Notes due 2013
No. ___ $__________
AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.
promises to pay to ______________ or registered assigns,
the principal sum of ________________________________________________ DOLLARS
on February 15, 2013.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Dated:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc., its
general partner
By: _____________________________________
Name:
Title:
AMERICAN REAL ESTATE FINANCE CORP.
By: _____________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By:_______________________________
Authorized Signatory
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[Back of Regulation S Temporary Global Note]
7 1/8% Senior Notes due 2013
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE PARTNERS, L.P.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF American REal Estate Partners, L.P. AND AMERICAN REAL ESTATE FINANCE
CORP. THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
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SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO AMERICAN REAL
ESTATE PARTNERS, L.P. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
AMERICAN REAL ESTATE PARTNERS, L.P. SO REQUESTS), (2) TO AMERICAN REAL ESTATE
PARTNERS, L.P. OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. American Real Estate Partners, L.P., a Delaware
limited partnership ("AREP") and American Real Estate Finance Corp. ("AREP
Finance", together with AREP, the "Company"), promises to pay interest on
the principal amount of this Note at 7 1/8% per annum from
________________, 20__ until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually in arrears on February 15 and August 15 of
each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"). Interest on
the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided further
that the first Interest Payment Date shall be _____________, 20__. The
Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess
of the rate then in effect to the extent lawful; it will pay interest
(including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest and Liquidated Damages, if any,
(without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.
(2) METHOD OF PAYMENT. The Company will pay or cause to pay interest
on the Notes (except defaulted interest) and Liquidated Damages, if any,
to the Persons who are registered Holders of Notes at the close of
business on the February 1 or August 1 next preceding the
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Interest Payment Date, even if such Notes are canceled after such record
date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The
Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for
such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages, if any,
may be made by check mailed to the Holders at their addresses set forth in
the register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal of
and interest, premium and Liquidated Damages, if any, on, all Global Notes
and all other Notes the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent. Such payment will be in
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.
(3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of February 7, 2005 (the "Indenture") among the Company, the Guarantor
and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the TIA.
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured obligations of the Company.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Company will not have the option to redeem the Notes prior to
February 15, 2009. On or after February 15, 2009, the Company will have
the option to redeem all or a part of the Notes upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, on the Notes redeemed to the
applicable redemption date, if redeemed during the twelve-month period
beginning on February 15 of the years indicated below, subject to the
rights of Holders on the relevant record date to receive interest on the
relevant interest payment date:
Year Percentage
- ---- ----------
2009................................... 103.563%
2010................................... 101.781%
2011 and thereafter.................... 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to February 15, 2008, the Company may on
one or more occasions redeem up to 35% of the aggregate principal amount
of Notes (including Additional Notes) issued under the Indenture at a
redemption price of 107.125% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, to the redemption
date, with the net cash proceeds of one or more Equity Offerings; provided
that at least 65% of the aggregate principal
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amount of Notes issued under the Indenture remains outstanding immediately
after the occurrence of such redemption (excluding Notes held by AREP and
its Subsidiaries (including any Guarantor)) and such redemption occurs
within 60 days of the date of the closing of such Equity Offering.
(6) MANDATORY REDEMPTION.
Other than in connection with redemption pursuant to Gaming Laws, the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
(7) REDEMPTION PURSUANT TO GAMING LAWS
If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:
(1) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority; or
(2) is denied such license or qualification or not found suitable;
AREP shall then have the right, at its option:
(1) to require each such Holder or Beneficial Owner to dispose of its
Notes within 30 days (or such earlier date as may be required by the applicable
Gaming Authority) of the occurrence of the event described in clause (1) or (2)
above, or
(2) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:
(a) the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, if any, to the earlier of the date of
redemption, the date 30 days after such Holder or Beneficial Owner is required
to apply for a license, qualification or finding of suitability (or such shorter
period that may be required by any applicable Gaming Authority) if such Holder
or Beneficial Owner fails to do so ("Application Date") or of the date of denial
of license or qualification or of the finding of unsuitability by such Gaming
Authority;
(b) the price at which such Holder or Beneficial Owner acquired the Notes,
together with accrued and unpaid interest and Liquidated Damages, if any, to the
earlier of the date of redemption, the Application Date or the date of the
denial of license or qualification or of the finding of unsuitability by such
Gaming Authority; and
(c) such other lesser amount as may be required by any Gaming Authority.
Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:
(1) to exercise, directly or indirectly, through any trustee or nominee or
any other person or entity, any right conferred by the Notes, the Note Guarantee
or the Indenture; or
A2-5
(2) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantee or any remuneration in any form with respect to the Notes and
the Note Guarantee from the Company, any Note Guarantor or the Trustee, except
the redemption price referred to above.
AREP shall notify the Trustee in writing of any such redemption as soon as
practicable. Any Holder or Beneficial Owner that is required to apply for a
license, qualification or a finding of suitability will be responsible for all
fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities and the Company and any Note Guarantor will not reimburse any Holder
or Beneficial Owner for such expense.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to each Holder to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, subject
to the rights of Holders on the relevant record date to receive interest
due on the relevant interest payment date (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company
will mail a notice to each Holder setting forth the procedures governing
the Change of Control Offer as required by the Indenture.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 15 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address, except
that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction or discharge of the Indenture. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed.
(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register
the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day distribution compliance period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.
A2-6
(11) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes or the Note Guarantees may be
amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
including Additional Notes, if any, voting as a single class, and any
existing Default or Event or Default or compliance with any provision of
the Indenture or the Notes or the Note Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture
or the Notes or the Note Guarantees may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or a Guarantor's obligations to Holders of the
Notes and Note Guarantees in case of a merger or consolidation, to make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture
under the TIA, to conform the text of the Indenture or the Notes to any
provision of the "Description of Notes" section of the Company's Offering
Memorandum dated February 1, 2005, as supplemented, relating to the
initial offering of the Notes, to the extent that such provision in that
"Description of Notes" was intended to be a verbatim recitation of a
provision of the Indenture, the Note Guarantees or the Notes; to provide
for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Note Guarantee with
respect to the Notes.
(13) DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages,
if any, with respect to the Notes; (ii) default in the payment when due of
the principal of, or premium, if any, on, the Notes when the same becomes
due and payable at maturity, upon redemption (including in connection with
an offer to purchase) or otherwise, (iii) failure by the Company to comply
with Section 4.15, of the Indenture; (iv) failure by the Company or any
Guarantor to comply with Sections 4.07, 4.09, 4.16 or 4.17 for 30 days
after written notice from the Trustee, (v) failure by the Company or any
Guarantor for 60 days after written notice to the Company by the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes
including Additional Notes, if any, then outstanding voting as a single
class to comply with any of the other agreements in the Indenture or the
Notes; (vi) default under certain other agreements relating to
Indebtedness of the Company or any Guarantor which default results in the
acceleration of such Indebtedness prior to its express maturity; (vii)
certain final judgments for the payment of money that remain undischarged
for a period of 60 days; (viii) certain events of bankruptcy or insolvency
with respect to the Company or any Guarantor that is a Significant
Subsidiary and (ix) except as permitted by the Indenture, any Note
Guarantee is held in any judicial proceeding to be unenforceable or
invalid or ceases for any reason to be in full force and effect or AREH or
any other Guarantor or any Person acting on behalf of any Guarantor denies
or disaffirms its obligations under such Guarantor's Note Guarantee. If
any Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Notes
will become due and payable immediately without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. Subject to certain limitations, Holders of a majority in
aggregate
A2-7
principal amount of the then outstanding Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders
of the Notes notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal or
interest or premium or Liquidated Damages, if any,) if it determines that
withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by notice to the
Trustee may, on behalf of the Holders of all of the Notes, rescind an
acceleration or waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or premium or Liquidated Damages, if
any, on, or the principal of, the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required, upon becoming aware of any Default
or Event of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
managing member), direct or indirect member, partner, employee,
incorporator or stockholder of the Company API, or the general partner of
the Company or any Guarantor or any of the Guarantors, as such, will not
have any liability for any obligations of the Company or the Guarantors
under the Notes, the Note Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes will have all the rights set
forth in the Registration Rights Agreement dated as of February 7, 2005,
among the Company, the Guarantor and the other parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes will have the
rights set forth in one or more registration rights agreements, if any,
among the Company, the Guarantor and the other parties thereto, relating
to rights given by the Company and the Guarantor to the purchasers of any
Additional Notes (collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes, and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed
thereon.
A2-8
(20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.
A2-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: _________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 of the Indenture, check the box below:
-- Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount you elect to
have purchased:
$_______________
Date: _______________
Your Signature: _________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: _________________________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-11
SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY
GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges of a part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:
Principal Amount
Amount of decrease in Amount of increase in at maturity of this
Principal Amount Principal Amount Global Note following Signature of authorized
at maturity of at maturity of such decrease officer of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
- ---------------- --------------------- --------------------- --------------------- -----------------------
A2-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel, Esq.
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Telecopier No.: (302) 636-4140
Attention: Michael G. Oller
Re: 7 1/8% Senior Notes due 2013
Reference is hereby made to the Indenture, dated as of February 7, 2005
(the "Indenture"), among American Real Estate Partners, L.P. ("AREP"), American
Real Estate Finance Corp. ("AREP Finance", together with AREP, the "Company"),
the Guarantor party thereto and Wilmington Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S PERMANENT GLOBAL NOTE
OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a Person in the United States and (x) at
the time the buy order was
B-1
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchasers). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Permanent Global Note,
the Regulation S Temporary Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144, Rule
903 or Rule 904, and the Transferor hereby further certifies that it has
not engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by
the Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached
to this certification), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI
Global Note and/or the Restricted Definitive Notes and in the Indenture
and the Securities Act.
B-2
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_________________________________
[Insert Name of Transferor]
By: _____________________________
Name:
Title:
Dated: _______________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Telecopier No.: (302) 636-4140
Attention: Michael G. Oller
Re: 7 1/8% Senior Notes due 2013
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of February 7, 2005
(the "Indenture"), among American Real Estate Partners, L.P. ("AREP"), American
Real Estate Finance Corp. ("AREP Finance", together with AREP, the "Company"),
the Guarantor party thereto and Wilmington Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and
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pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
[ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
C-2
_______________________________
[Insert Name of Transferor]
By: _______________________________
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Facsimile No.: (914) 242-9282
Attention: Felicia P. Buebel,Esq.
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Telecopier No.: (302) 636-4140
Attention: Michael G. Oller
Re: 7 1/8% Senior Notes due 2013
Reference is hereby made to the Indenture, dated as of February 7,
2005 (the "Indenture"), among American Real Estate Partners, L.P. ("AREP"),
American Real Estate Finance Corp. ("AREP Finance", together with AREP, the
"Company"), the Guarantor party thereto and Wilmington Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the
D-1
EXHIBIT D
Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any Person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a transaction
meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
D-2
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
__________________________________________
[Insert Name of Accredited Investor]
By: ______________________________________
Name:
Title:
Dated: _______________________
D-3
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of February 7, 2005 (the "Indenture"),
among American Real Estate Partners, L.P. ("AREP"), American Real Estate Finance
Corp. ("AREP Finance", together with AREP, the "Company"), the Guarantor party
thereto and Wilmington Trust Company, as trustee (the "Trustee"), (a) the due
and punctual payment of the principal of, premium and Liquidated Damages, if
any, and interest on, the Notes, whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal of and interest on the Notes, if any, if lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of the Indenture and (b) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article 10 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Note Guarantee.
Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound
by such provisions and (b) appoints the Trustee attorney-in-fact of such Holder
for all purposes
Capitalized terms used but not defined herein have the meanings given to
them in the Indenture.
[NAME OF GUARANTOR(S)]
By: _______________________________
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of American Real Estate Partners, L.P., a Delaware
limited partnership, as issuer ("AREP") (or its permitted successor), American
Real Estate Finance Corp., a Delaware corporation, as co-issuer ("AREP Finance",
together with AREP, the "Company"), the other Guarantors (as defined in the
Indenture referred to herein) and Wilmington Trust Company, as trustee under the
Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of February 7, 2005 providing for the
issuance of 7 1/8% Senior Notes due 2013 (the "Notes");
WHEREAS, the Indenture provides that a Guaranteeing Subsidiary may execute
and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's
Obligations under the Notes and the Indenture on the terms and conditions set
forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Note Guarantee and in the Indenture including but not limited
to Article 10 thereof.
4. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator, manager (or managing member) direct or indirect member, partner or
stockholder of the Company, AREH, API or any additional Guarantor shall have any
liability for any obligations of the Company, AREH, API or any additional
Guarantor under the Notes, this Indenture, any Note Guarantee or for any claim
based on, in respect of, or by reason of such obligations or its creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
F-1
6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
F-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc., its
general partner
By: _______________________________
Name:
Title:
AMERICAN REAL ESTATE FINANCE CORP.
By: _______________________________
Name:
Title:
AMERICAN REAL ESTATE HOLDINGS LIMITED
PARTNERSHIP
By: American Property Investors, Inc., its
general partner
By: _______________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________
Authorized Signatory
F-3
EXHIBIT G
FORM OF SECURITY AND CONTROL AGREEMENT
This Security and Control Agreement (this "Agreement") dated as of
[__________], 200[___] among American Real Estate Partners, L.P. (the "Grantor"
or "AREP"), Wilmington Trust Company in its capacity as Trustee on behalf of the
Holders (as defined in the Indenture) (the "Secured Party") and Wilmington Trust
Company in its capacity as a "bank" as defined in Section 9-102 of the UCC (in
such capacity, the "Financial Institution"). Capitalized terms used but not
defined herein shall have the meanings assigned in the Indenture, dated as of
February 7, 2005, between the Grantor, American Real Estate Holdings Limited
Partnership, a Delaware limited partnership ("AREH") and the Secured Party (the
"Indenture"). All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York.
WHEREAS, the Grantor, AREH and the Secured Party on behalf of the
Noteholders have entered into the Indenture relating to the Grantor's and
AMERICAN Real Estate Finance Corp.'s, a Delaware corporation ("Finance Corp",
together with the Grantor, the "Issuers"), 7 1/8% senior notes due 2013;
WHEREAS, the Grantor and the Secured Party are entering into this
Agreement to grant the Secured Party a security interest in the Pledged Account
(as hereinafter defined) and the Collateral (as hereinafter defined);
WHEREAS, the parties hereto are entering into this Agreement to
perfect and ensure the priority of such security interest;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. GRANT OF SECURITY.
(a) The Grantor hereby assigns, grants, hypothecates and
pledges to, and grants a lien on and a security interest in favor of the Secured
Party, on behalf of the Noteholders, on all estate, right, title and interest of
the Grantor, whether now owned or hereafter acquired, in the Pledged Account and
in all cash and other assets or property held therein or credited thereto or
received in connection therewith and all proceeds thereof, including all rights
of the Grantor to receive moneys due in respect of such Pledged Account, and all
claims with respect to such Pledged Account, all income or gain earned in
respect of any assets held in or credited to such Pledged Account, and all
proceeds receivable or received when any asset held in or credited to such
Pledged Account is collected, exchanged or otherwise disposed of, whether
voluntarily or involuntarily (all of the foregoing being collectively referred
to as the "Collateral").
(b) The Grantor agrees that from time to time it shall
promptly execute and deliver all instruments and documents, and take all
actions, that may be reasonably necessary, or that the Secured Party may
reasonably request, in order to perfect and protect the assignment and security
interest granted or intended to be granted hereby or to enable the Secured Party
to exercise or enforce its rights and remedies hereunder with respect to the
G-1
Pledged Account and the Collateral. Furthermore, the Grantor hereby authorizes
the Secured Party to file such financing or continuation statements, or
amendments thereto, and such other instruments, endorsements or notices, as the
Secured Party may reasonably deem necessary or advisable in order to perfect and
preserve the assignment and security interest granted or purported to be granted
hereby.
(c) The Grantor represents and warrants that:
(i) the Agreement constitutes the valid and legally binding
obligation of the Grantor, enforceable in accordance with its terms and
conditions;
(ii) it has not assigned any of its rights under the Pledged Account
or the Collateral;
(iii) it has not executed and is not aware of any effective
financing statement, security agreement, control agreement or other instrument
similar in effect covering all or any part of the Pledged Account or the
Collateral;
(iv) it has full power and authority to grant a security interest in
and assign its right, title and interest in the Pledged Account and the
Collateral; and
(v) upon the execution and delivery of this Agreement by the
Grantor, the security interest granted to the Secured Party pursuant to this
Agreement in and to the Pledged Account and the Collateral will constitute, a
first priority perfected security interest.
SECTION 2. ESTABLISHMENT AND MAINTENANCE OF COLLATERAL ACCOUNTS.
(a) The Financial Institution hereby represents and warrants
that it has established and currently maintains the account listed on Schedule 1
hereto as a separate account segregated from all other custodial, collateral or
other accounts, and that the Grantor is its sole customer with respect to such
account (such account and any successor account being referred to herein as the
"Pledged Account.") The Financial Institution agrees to act as bank with respect
to the Pledged Account and covenants and agrees that it shall not change the
name or account number of the Pledged Account without the prior written consent
of the Secured Party or, except in an Event of Default, the Grantor;
(b) The Financial Institution represents and warrants that the
Pledged Account is a "deposit account" (as defined in Section 9-102(a)(29) of
the UCC); and
(c) Each of the Financial Institution and the Grantor
represents, warrants and covenants that no investment property (as defined in
Section 9-102(a)(49) of the UCC) shall be deposited or otherwise included in the
Pledged Account and agrees no funds on deposit in the Pledged Account shall be
invested in any investment property.
SECTION 3. SECURED PARTY'S CONTROL OF THE PLEDGED ACCOUNTS. If at
any time the Financial Institution shall receive any instruction (within the
meaning of Section 9-104 of the UCC, i.e., an order directing the disposition of
funds in a Pledged Account) originated by
G-2
the Secured Party, the Financial Institution shall comply with such instruction
without further consent by the Grantor or any other person.
SECTION 4. GRANTOR'S ACCESS TO THE ACCOUNT.
(a) It is understood and agreed that until this Agreement is
terminated in accordance with the terms hereof, the Financial Institution shall
not comply with instructions of the Grantor or any person other than the Secured
Party without the express consent of the Secured Party to each such instruction;
(b) Except if an Event of Default shall have occurred and be
continuing, if at any Quarterly Determination Date the amount of Collateral
exceeds the amount required to then be deposited in the Pledged Account pursuant
to Section 4.16 of the Indenture, the Grantor may provide a Notice of Partial
Release in substantially the form of Exhibit A hereto requesting that the
Secured Party instruct the Financial Institution to release such excess amount
to the Grantor.
SECTION 5. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event
that the Financial Institution has or subsequently obtains by agreement, by
operation of law or otherwise a security interest in the Pledged Account or the
Collateral, the Financial Institution hereby agrees that such security interest
shall be subordinate to the security interest of the Secured Party. The money
and other items credited to the Pledged Account will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any person
other than the Secured Party.
SECTION 6. REMEDIES. If any Event of Default shall have occurred and
be continuing, the Secured Party may exercise in respect of the Pledged Account
and the Collateral, in addition to all other rights and remedies provided for
herein, in the Indenture or otherwise available to it at law or in equity, all
right and remedies of the Secured Party on default under the UCC (whether or not
the UCC applies to the affected Pledged Account or any Collateral) to collect,
enforce or satisfy any Obligation then owing, whether by acceleration or
otherwise, including, without limitation, applying any or all of the cash in the
Pledged Account in full or partial satisfaction of the Obligations, or otherwise
selling in one or more public or private sales or retaining in full or partial
satisfaction of the Obligations any or all of the Collateral granted hereunder.
SECTION 7. CHOICE OF LAW. This Agreement shall each be governed by
the laws of the State of New York. Regardless of any provision in any other
agreement, for purposes of the UCC, with respect to the Pledged Account, New
York shall be deemed to be the bank's jurisdiction (within the meaning of
Section 9-304 of the UCC). The Pledged Account shall be governed by the laws of
the State of New York.
SECTION 8. CONFLICT WITH OTHER AGREEMENTS. The Financial Institution
hereby represents, warrants, covenants and agrees that:
(a) There are no other agreements entered into between the
Financial Institution and the Grantor (or any other person) with respect to the
Pledged Account or the Collateral;
G-3
(b) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any person other than the
Secured Party relating to the Pledged Account or the Collateral pursuant to
which it agrees or has agreed to comply with instructions (within the meaning of
Section 9-104 of the UCC) of such other person;
(c) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Grantor or the Secured
Party purporting to limit or condition the obligation of the Financial
Institution to comply with instructions with respect to the Pledged Account or
the Collateral; and
(d) In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into with respect to the Pledged Account or the Collateral, the terms of this
Agreement shall prevail.
SECTION 9. ADVERSE CLAIMS. The Financial Institution represents and
warrants that except for the claims and interest of the Secured Party and of the
Grantor in the Pledged Account and the Collateral, it does not know of any
security interest in, lien on or claim to, or other interest in, the Pledged
Account or the Collateral. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Pledged Account or the Collateral, the
Financial Institution will promptly notify the Secured Party and the Grantor
thereof.
SECTION 10. ADDITIONAL PROVISIONS REGARDING MAINTENANCE OF ACCOUNTS.
The Financial Institution covenants and agrees:
(a) Statements and Confirmations. The Financial Institution
will promptly send copies of all statements, confirmations and other
correspondence concerning the Pledged Account or the Collateral, simultaneously
to each of the Grantor and the Secured Party at the address for each set forth
in Section 14 of this Agreement.
(b) Tax Reporting. All interest, if any, relating to the
Pledged Account, shall be reported to the Internal Revenue Service and all state
and local taxing authorities under the name and taxpayer identification number
of the Grantor.
SECTION 11. ADDITIONAL REPRESENTATION AND WARRANTY OF THE FINANCIAL
INSTITUTION. The Financial Institution represents and warrants that this
Agreement constitutes the valid and legally binding obligation of the Financial
Institution, enforceable in accordance with its terms and conditions.
SECTION 12. INDEMNIFICATION OF FINANCIAL INSTITUTION AND SECURED
PARTY.
(a) The Grantor hereby agrees that the Financial Institution shall
be relieved from liabilities (i) arising from the error of judgment made in good
faith by it, unless it is proved that the Financial Institution was negligent in
ascertaining the pertinent facts; and (ii) with respect to any action it takes
or omits to take in good faith in accordance with a direction received pursuant
to the terms of this Agreement.
G-4
The Financial Institution (i) will not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or within
the rights or powers conferred upon it by this Agreement; (ii) may act through
its attorneys and agents and will not be responsible for the misconduct or
negligence of any attorney or agent appointed with due care; (iii) may
conclusively rely upon any document believed by it to be genuine and to have
been signed or presented by the proper person and it need not investigate any
fact or matter stated in any such document; and (iv) may consult with counsel of
its choice and the written advice of such counsel will be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
The Grantor will indemnify the Financial Institution and hold it
harmless against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Agreement, including the costs and expenses of enforcing this
Agreement against the Grantor (including this Section 12) and defending itself
against any claim (whether asserted by the Grantor or any other person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except any such loss, liability or expense attributable to its
negligence or bad faith. The Financial Institution will notify the Grantor
promptly of any claim for which it may seek indemnity. Failure by the Financial
Institution to so notify the Grantor will not relieve the Grantor of its
obligations hereunder. The Grantor will defend the claim and the Financial
Institution will cooperate in the defense. The Financial Institution may have
separate counsel and the Grantor will pay the reasonable fees and expenses of
such counsel. The Grantor need not pay for any settlement made without its
consent, which consent will not be unreasonably withheld.
(b) The Secured Party shall be entitled to all benefits and rights
arising under the protections and indemnification granted to it by Grantor under
the terms of the Indenture in connection with any actions taken or omissions
made by the Secured Party with respect to its duties and obligations hereunder
as if such protections and indemnification were explicitly granted hereunder.
(c) The obligations of the Grantor under this Section 12 will
survive the termination of this Agreement.
SECTION 13. SUCCESSORS; ASSIGNMENT. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and assigns, except that neither the Grantor nor the
Financial Institution may delegate their obligations hereunder without the prior
written consent of the Secured Party. Additionally, in the event that the
Secured Party is replaced as Trustee under the Indenture any entity that
succeeds to such role shall be entitled to the benefits of this Agreement. The
Secured Party agrees to send written notice to the Financial Institution of any
such replacement.
SECTION 14. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.
G-5
Grantor:
American Real Estate Partners, L.P.
100 South Bedford Road
Mt. Kisco, New York 10549
Attention: Chief Financial Officer
Facsimile: (914) 242-9282
Secured Party:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Michael G. Oller
Facsimile: (302) 636-4140
Financial Institution:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Capital Markets
Trust Officer
Facsimile: (302) 636-4140
Any party may change its address for notices by giving notice to the
other parties hereto in the manner set forth above.
SECTION 15. AMENDMENT. No amendment or modification of this
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all of the parties hereto.
SECTION 16. TERMINATION.
(a) The obligations of the Financial Institution to the
Secured Party pursuant to this Agreement shall continue in effect until the
security interests of the Secured Party in the Pledged Account and the
Collateral have been terminated pursuant to the terms of the Indenture and the
Secured Party has notified the Financial Institution of such termination in
writing. The Secured Party agrees to provide Notice of Termination in
substantially the form of Exhibit B hereto to the Financial Institution upon the
request of the Grantor on or after the termination of the Secured Party's
security interest in the Pledged Account and the Collateral pursuant to the
terms of the Indenture. The termination of this Agreement shall not terminate
the Pledged Account or alter the obligations of the Financial Institution to the
Grantor pursuant to any other agreement with respect to the Pledged Account.
G-6
(b) Without limitation to the foregoing, if at any Quarterly
Determination Date, the Fixed Charge Coverage Ratio of AREP and the Guarantors
is at least 1.5 to 1.0 for the four consecutive fiscal quarters most recently
completed prior to such Quarterly Determination Date, the Secured Party shall
provide to the Financial Institution a Notice of Termination in the form of
Exhibit B.
SECTION 17. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing and
delivering one or more counterparts.
[Remainder of page intentionally left blank]
G-7
IN WITNESS WHEREOF, each of the Grantor, the Secured Party and the
Financial Institution have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date
first written above.
AMERICAN REAL ESTATE PARTNERS,
L.P., as Grantor
By: American Property Investors, Inc., its
general partner
By: ______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as Secured
Party in its capacity as Trustee on behalf
of the Noteholders
By: ______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, in its capacity
as Financial Institution
By: ______________________________________
Name:
Title:
G-8
SCHEDULE 1
Existing Deposit Account Subject to this Agreement
Exact Name of Account Account Number
G-9
Exhibit A
[Letterhead of Grantor]
[Date]
[Name and Address of Secured Party]
Attention: ______
Re: Notice of Partial Release
Reference is made to the Security and Control Agreement, between
you, the Financial Institution and the undersigned, dated as of [__________,
200__]. We hereby notify you that as of [________, 200__] the Collateral held in
the Pledged Account exceeded the amount required to be deposited in the Pledged
Account, as follows:
QUARTERLY DETERMINATION BALANCE: $[ ]
LESS: ONE YEAR OF INTEREST PAYMENTS: $[ ]
----
AMOUNT OF PARTIAL RELEASE: $[ ]
We hereby request that you instruct the Financial Institution to
release to us such Amount of Partial Release.
We hereby certify that no Event of Default has occurred and is
continuing under the Indenture.
Very truly yours,
[Grantor]
By: ______________________________
Title:
G-10
Exhibit B
[Letterhead of Grantor]
[Date]
[Name and Address of Secured Party]
Attention: ______
Re: Termination of Security and Control Agreement
You are hereby notified that the Security and Control Agreement
between you, the Grantor and the undersigned is terminated and you have no
further obligations to the undersigned pursuant to such Agreement.
Notwithstanding any previous instructions to you, you are hereby instructed to
accept all future directions with respect to account number _______from the
Grantor. This notice terminates any obligations you may have to the undersigned
with respect to such account, however nothing contained in this notice shall
alter any obligations which you may otherwise owe to the Grantor pursuant to any
other agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to American Real Estate Partners, L.P.
Very truly yours,
[Name of Secured Party]
By: ______________________________
Title:
G-11