________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 16, 2007
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AMERICAN REAL ESTATE PARTNERS, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 1-9516 13-3398766
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(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
767 Fifth Avenue, Suite 4700
New York, New York 10153
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(Address of principal executive offices)(Zip code)
(212) 702-4300
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4 (c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.03 CREATION OF DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
UNDER AN OFF- BALANCE SHEET ARRANGEMENT OF REGISTRANT
American Real Estate Partners, L.P. (NYSE: ACP) ("AREP") today
announced that it had sold an aggregate of $300 million of its Variable Rate
Senior Convertible Notes due 2013 (the "Notes") to Portside Growth and
Opportunity Fund, an investment fund managed by Ramius Capital Group, LLC
("Ramius Capital"), and an investment fund managed by Highbridge Capital
Management, LLC ("Highbridge"), pursuant to an option granted to Ramius Capital
and Highbridge under a Securities Purchase Agreement entered into among the
Company, Ramius Capital and Highbridge. As a result, to date, AREP has sold a
total of $500 million of the Notes. The Notes were sold in a private
placement pursuant to Section 4(2) of the U.S. Securities Act of 1933 (the
"Securities Act").
As previously announced, AREP entered into the Securities Purchase
Agreement with Ramius Capital and Highbridge on April 4, 2007, pursuant to which
AREP sold an aggregate of $200 million of the Notes to Ramius Capital and
Highbridge on April 5, 2007. Under the terms of the Securities Purchase
Agreement, AREP granted Ramius Capital and Highbridge an option through April
13, 2007 to purchase up to an additional $400 million in aggregate principal
amount of the Notes. On April 12, 2007, Ramius Capital and Highbridge notified
the Company that they were exercising such option with respect to an additional
$300 million in aggregate principal amount of the Notes.
Under the terms of the Securities Purchase Agreement, AREP now has the
right, until May 5, 2007, to place an additional $100 million in aggregate
principal amount of the Notes with other investors, subject to an option granted
to Ramius Capital and Highbridge to purchase such additional Notes on or before
April 25, 2007.
The Notes bear interest at a rate of LIBOR minus 125 basis points, but
no less than 4.0% nor higher than 5.5%, and are convertible into Depositary
Units of AREP at a conversion price of $132.595 per share, subject to
adjustments in certain circumstances.
The Notes have not been and will not be registered under the Securities
Act and may not be offered or sold in the United States absent registration or
an applicable exemption from the registration requirements of the Securities
Act.
In connection with the sale of the Notes, AREP and the Initial Buyers
have entered into a Registration Rights Agreement, pursuant to which AREP has
agreed to file one or more shelf registration statements with respect to resales
of Depositary Units issuable upon conversion of the Notes.
SECTION 3 - SECURITIES AND TRADING MARKETS
ITEM 3.02 UNREGISTERED SALE OF EQUITY SECURITIES
The information provided in Item 2.03 regarding the issuance and terms
of the Variable Rate Senior Convertible Notes is hereby incorporated by
reference.
The Notes are being issued in a private placement pursuant to Rule 144A
and Section 4(2) of the Securities Act and Rule 506 of Regulation D as
promulgated by the SEC under the Securities Act.
SECTION 8 - OTHER EVENTS
ITEM 8.01 OTHER EVENTS
On April 17, 2007, the Company issued a press release, a copy of which
is furnished as Exhibit 99.1.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(D) EXHIBITS
EXHIBIT 10.44 - Form of Variable Rate Senior Convertible Notes due 2013
EXHIBIT 99.1 - Press release dated April 17, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN REAL ESTATE PARTNERS, L.P.
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(Registrant)
Date: April 17, 2007 By: AMERICAN PROPERTY INVESTORS, INC.,
its General Partner
By: /s/ Keith A Meister
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Keith A. Meister
Principal Executive Officer
EXHIBIT 10.44
[Face of Note]
- -------------------------------------------------------------------------------
CUSIP/CINS 029169 AA7
Variable Rate Senior Convertible 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 August 15, 2013.
Interest Payment Dates: January 15, April 15, July 15 and October 15
Record Dates: January 1, April 1, July 1 and October 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
[Back of Note]
Variable Rate Senior Convertible Notes due 2013
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 AND THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF AMERICAN REAL ESTATE
PARTNERS, L.P. AND AMERICAN REAL ESTATE FINANCE CORP. THAT (A) SUCH SECURITY AND
THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a) (1), (2), (3) OR (7) OF THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN
BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO AMERICAN REAL ESTATE PARTNERS, L.P. THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF AMERICAN REAL ESTATE PARTNERS, L.P. SO REQUESTS), (2) TO
AMERICAN REAL ESTATE PARTNERS, L.P. OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE. IF AT ANY TIME THE NEVADA GAMING COMMISSION FINDS THAT A HOLDER OF
THIS SECURITY OR THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF IS
UNSUITABLE TO CONTINUE TO OWN THE SECURITY (OR THE DEPOSITARY UNITS ISSUABLE
UPON CONVERSION HEREOF), AMERICAN REAL ESTATE PARTNERS, L.P. SHALL HAVE THE
RIGHT TO REQUIRE SUCH HOLDER TO DISPOSE OF SUCH SECURITY OR DEPOSITARY UNITS, AS
APPLICABLE, AS PROVIDED BY THE GAMING LAWS OF THE STATE OF NEVADA AND THE
REGULATIONS PROMULGATED THEREUNDER. ALTERNATIVELY, AMERICAN REAL ESTATE
PARTNERS, L.P. SHALL HAVE THE RIGHT TO REDEEM THE SECURITY FROM THE HOLDER AT A
PRICE SPECIFIED IN THE INDENTURE GOVERNING THE SECURITY. NEVADA GAMING LAWS AND
REGULATIONS RESTRICT THE RIGHT UNDER CERTAIN CIRCUMSTANCES: (A) TO PAY OR
RECEIVE ANY INTEREST UPON SUCH SECURITY; (B) TO EXERCISE, DIRECTLY OR THROUGH
ANY TRUSTEE OR NOMINEE, ANY VOTING RIGHT CONFERRED BY SUCH SECURITY; OR (C) TO
RECEIVE ANY REMUNERATION IN ANY FORM FROM AMERICAN REAL ESTATE PARTNERS, L.P.,
FOR SERVICES RENDERED OR OTHERWISE.
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"), promise to pay interest on
the principal amount of this Note at the interest rate set forth below from
April 5, 2007 until maturity and shall pay the Additional Interest, if any,
payable pursuant to Section 2 of the Registration Rights Agreement referred
to below. The Company will pay interest and Additional Interest, if any,
quarterly in arrears on January 15, April 15, July 15 and October 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 April 5, 2007; 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 July 15, 2007 and the last interest payment date
shall be August 15, 2013 (the "Maturity Date"). Interest on the Notes (the
"Interest Rate") shall accrue at a rate equal to LIBOR minus one and one
quarter percent (1.25%) per annum; provided that the Interest Rate shall at
no time be less than four percent (4.0%) per annum nor greater than five
and one half percent (5.5%) per annum. The applicable Interest Rate in
respect of the Notes shall be determined by the Calculation Agent for each
quarterly interest period on the last Trading Day of the immediately
preceding quarterly period. 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 Additional Interest, 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 be paid
interest on the Notes (except defaulted interest) and Additional Interest,
if any, to the Persons who are registered Holders of Notes at the close of
business on the January 1, April 1, July 1 and October 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 Additional Interest, 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 Additional Interest, if any, may be
made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that, in respect of any Holder with an
aggregate principal amount of Notes in excess of $2,000,000, at the request
of such Holder in writing to the Company, interest on such Holder's Notes
shall be paid by wire transfer in immediately available funds. 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) REGISTRAR, PAYING AGENT, CONVERSION AGENT AND CALCULATION AGENT.
Initially, Wilmington Trust Company, the Trustee under the Indenture, will
act as Registrar, Paying Agent, Conversion Agent and Calculation Agent. The
Company may change any Registrar, Paying Agent or Calculation Agent 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 April 5, 2007 (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) 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:
(a) 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
(b) is denied such license or qualification or not found
suitable;
AREP shall then have the right, at its option:
(a) 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 (a) or (b) above, or
(b) 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:
(i) the principal amount thereof, together with accrued and
unpaid interest and Additional Interest, if any, to the earlier of the
date of redemption, the date 30 days after such Holder or Beneficial
Owner is required to apply for a license, qualification or finding of
suitability (or such shorter period that may be required by any
applicable Gaming Authority) if such Holder or Beneficial Owner fails
to do so ("Application Date") or of the date of denial of license or
qualification or of the finding of unsuitability by such Gaming
Authority;
(ii) the price at which such Holder or Beneficial Owner acquired
the Notes, together with accrued and unpaid interest and Additional
Interest, if any, to the earlier of the date of redemption, the
Application Date or the date of the denial of license or qualification
or of the finding of unsuitability by such Gaming Authority; and
(iii) 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:
(a) 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
(b) to receive any interest, Additional Interest, 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
pursuant to the provisions of the Indenture. 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.
(6) MANDATORY REDEMPTION. Other than in connection with redemption in
the event of a Fundamental Transaction as described below, the Company is
not required to make mandatory redemption or sinking fund payments with
respect to the Notes.
(7) CONVERSION. Subject to the terms and conditions of the Indenture,
a Holder may convert at any time each of its Notes into the Company's
Depositary Units at the Conversion Price. The Conversion Price in effect at
any given time is subject to adjustment. A Holder may convert fewer than
all of such Holder's Notes so long as the Notes converted are an integral
multiple of $1,000 principal amount. If this Note shall be surrendered for
conversion during the period from the close of business on the Record Date
to the opening of business on the day immediately following the Interest
Payment Date, it shall be accompanied by payment, in funds acceptable to
the Company, of an amount equal to the interest otherwise payable on such
Interest Payment Date on the Principal Amount being converted; provided,
however, that no such payment need be made if there shall exist at the time
of conversion a default in the payment of interest on the Notes.
(8) FORCED CONVERSION. The Company may, at its option, automatically
convert all or a portion of the Notes at any time on or after April 5, 2009
and prior to the Maturity Date if: (i) the VWAP per Depositary Unit has
exceeded 150% of the Conversion Price then in effect for at least 20
Trading Days within a period of 30 consecutive Trading Days ending within 5
Trading Days of the Forced Conversion Notice Date; and (ii) the Equity
Conditions shall have been satisfied as of the date of the Forced
Conversion Notice. The Holders shall be entitled to receive a Make-Whole
Premium in accordance with Article 15 of the Indenture for any Forced
Conversion which occurs following the public announcement of a Fundamental
Change during the applicable Fundamental Change Repurchase Period. If at
any time during the Forced Conversion Period, the Equity Conditions are no
longer satisfied, the Company shall provide a notice to the Trustee and
each Holder of such failure and, unless the Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes waive
such failure, the Company shall be required to withdraw the Forced
Conversion Notice.
(9) REPURCHASE AT THE OPTION OF HOLDER. If prior to the Maturity Date
there shall have occurred a Fundamental Change, each Holder shall have the
option to require all or a portion of its Notes to be repurchased in cash
by the Company on the Fundamental Change Settlement Date for the principal
amount of the Notes to be repurchased, together with accrued and unpaid
interest and Additional Interest, if any, to, but excluding, the
Fundamental Change Settlement Date, plus a Make-Whole Premium, if
applicable.
(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 forced conversion, except for the unconverted portion of any
Note being converted in part.
(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,
to decrease the Conversion Price as set forth in the Indenture, or 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, or to amend, modify, revise or supplement the
Indenture to conform to certain amendments, modifications, revisions or
supplements made to substantially identical provisions of the Company's
outstanding unsecured Indebtedness. Under certain circumstances, including
proportional payment of consideration in respect of such waiver, the
Holders of the Notes will be deemed to have waived compliance by the
Company of provisions of the Notes or the Indenture, if the holders of the
Company's outstanding unsecured Indebtedness waive compliance with the same
requirements.
(13) DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on, or Additional Interest, if
any, with respect to the Notes; (ii) default in the payment when due of the
principal of, or premium (including any Make-Whole Premium), if any, on,
the Notes when the same becomes due and payable at maturity, or otherwise,
(iii) failure by the Company to comply with Article 13 of the Indenture;
(iv) 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; (v) default under certain other
agreements relating to Indebtedness of the Company or any Guarantor which
default results in the acceleration thereof; (vi) certain final judgments
for the payment of money that remain undischarged for a period of 60 days;
(vii) failure to convert the Notes as required pursuant to the Indenture;
(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. Under certain circumstances, including
proportional payment of consideration in respect of such waiver, the
Holders of the Notes will be deemed to have waived the occurrence of an
Event of Default by the Company, if the holders of the Company's
outstanding unsecured Indebtedness waive the same event of default as
provided in the governing documents of the applicable unsecured
Indebtedness. If any Event of Default occurs and is continuing, and has not
been waived or deemed waived pursuant to the immediately preceding
sentence, 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 Additional Interest,
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
Additional Interest, 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, 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 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 April 4, 2007, 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, repurchase or conversion 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, repurchase or conversion, 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.
767 Fifth Avenue, Suite 4700
New York, New York 10153
Facsimile No.: (646) 365-2833
Attention: Felicia P. Buebel, Esq.
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).
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
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
- ---------------- ------------------ ------------------ ------------- ------------------
* This schedule should be included only if the Note is issued in global form.
EXHIBIT 99.1
AREP
FOR IMMEDIATE RELEASE
AMERICAN REAL ESTATE PARTNERS, L.P.
ANNOUNCES SALE OF $300 MILLION OF CONVERTIBLE NOTES; TOTAL SALES OF
CONVERTIBLE NOTES REACHES $500 MILLION
NEW YORK, NEW YORK / April 17, 2007 - American Real Estate Partners, L.P.
(NYSE:ACP) ("AREP") today announced that it had sold an aggregate of $300
million of its Variable Rate Senior Convertible Notes due 2013 (the "Notes") to
Portside Growth and Opportunity Fund, an investment fund managed by Ramius
Capital Group, LLC ("Ramius Capital"), and an investment fund managed by
Highbridge Capital Management, LLC ("Highbridge"), pursuant to an option granted
to Ramius Capital and Highbridge under a Securities Purchase Agreement entered
into among the Company, Ramius Capital and Highbridge. As a result, to date,
AREP has sold a total of $500 million of the Notes. The Notes were sold in a
private placement pursuant to Section 4(2) of the U.S. Securities Act of 1933
(the "Securities Act").
As previously announced, AREP entered into the Securities Purchase Agreement
with Ramius Capital and Highbridge on April 4, 2007, pursuant to which AREP sold
an aggregate of $200 million of the Notes to Ramius Capital and Highbridge on
April 5, 2007. Under the terms of the Securities Purchase Agreement, AREP
granted Ramius Capital and Highbridge an option through April 13, 2007 to
purchase up to an additional $400 million in aggregate principal amount of the
Notes. On April 12, 2007, Ramius Capital and Highbridge notified the Company
that they were exercising such option with respect to an additional $300 million
in aggregate principal amount of the Notes.
Under the terms of the Securities Purchase Agreement, AREP now has the right,
until May 5, 2007, to place an additional $100 million in aggregate principal
amount of the Notes with other investors, subject to an option granted to Ramius
Capital and Highbridge to purchase such additional Notes on or before April 25,
2007.
The Notes bear interest at a rate of LIBOR minus 125 basis points, but no less
than 4.0% nor higher than 5.5%, and are convertible into Depositary Units of
AREP at a conversion price of $132.595 per share, subject to adjustments in
certain circumstances.
The Notes have not been and will not be registered under the Securities Act and
may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the Securities Act.
AREP, a master limited partnership, is a diversified holding company engaged in
a variety of businesses. AREP's businesses currently include gaming; real estate
and home fashion. To learn more about AREP, please visit www.arep.com.
This release contains certain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, many of which are beyond
AREP's ability to control or predict. Forward-looking statements may be
identified by words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "will" or words of similar meaning and
include, but are not limited to, statements about the expected future business
and financial performance of AREP and its subsidiaries. AREP undertakes no
obligation to publicly update or review any forward-looking information, whether
as a result of new information, future developments or otherwise.
For further information, please contact:
Andrew Skobe
American Real Estate Partners, L.P.
(212) 702-4300
767 Fifth Avenue, New York, New York 10153 -
Telephone (212) 702-4300 Fax (212) 750-5841
NYSE- ACP