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As filed with the Securities and Exchange Commission on April 21, 2006
Registration No. 333-126069

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Amendment No. 1
to
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
AMERICAN REAL ESTATE PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
 	 	 	
Delaware	 	13-3398766	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification Number)	
AMERICAN REAL ESTATE FINANCE CORP.
(Exact name of registrant as specified in its charter)
 	 	 	
Delaware	 	20-1059842	
(State or Other Jurisdiction of
Incorporation or Organization)	 	(I.R.S. Employer
Identification number)	
100 South Bedford Road
Mt. Kisco, New York 10549
(914) 242-7700
(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)
Jon F. Weber
President
100 South Bedford Road
Mt. Kisco, New York 10549
(914) 242-7700
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With copies to:
Steven L. Wasserman, Esq.
James T. Seery, Esq.
DLA Piper Rudnick Gray Cary US LLP
1251 Avenue of the Americas
New York, New York 10020
(212) 835-6000
     Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.
 
     If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.    o
     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box     þ
     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering     o
     If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.     o
     If this Form is a registration statement pursuant to General Instruction 1.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box:     o
     If this Form is a post-effective amendment to registration statement filed pursuant to General Instruction 1.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box:     o
CALCULATION OF REGISTRATION FEE

 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Proposed Maximum	 	 	Proposed Maximum	 	 	Amount of	
Title of Each Class of	 	 	Amount to be	 	 	Offering Price	 	 	Aggregate	 	 	Registration	
Securities to be Registered	 	 	Registered(1)	 	 	per Unit	 	 	Offering Price(1)(2)	 	 	Fee(3)(4)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Depositary units(3)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred units(3)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Debt securities(3)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Warrants(3)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Guarantees of Debt Securities(5)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Total	 	 	 	 	 	 	 	 	$1,000,000,000	 	 	$117,700	

 	 	
(1) 	Not applicable pursuant to Form S-3 General Instruction II(D).	
(2) 	Estimated solely for the purpose of determining the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, and based upon the maximum aggregate offering price of all securities being registered.	
(3) 	Such indeterminate number as may from time to time be issued at indeterminate prices registered hereunder.	
 	 	
(4) 	Previously paid.	

(5) 	Any series of debt securities issued by American Real Estate Finance Corp. will be guaranteed by American Real Estate Partners, L.P. Pursuant to Rule 457(n), no separate fee is payable with respect to the guarantees of the debt securities being registered.	
 	 	
     The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant will file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement will become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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The information in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
	
SUBJECT TO COMPLETION, DATED APRIL 21, 2006
PROSPECTUS
$1,000,000,000
AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.
Depositary Units Representing Limited Partnership Interests
Preferred Units Representing Limited Partnership Interests
Debt Securities
Warrants to Purchase Debt Securities, Preferred Units or Depositary Units
        We will provide the specific terms for each of these securities in supplements to this prospectus. You should read carefully this prospectus and any supplement before you invest.
      Our depositary units are listed on the New York Stock Exchange under the symbol “ACP”.
      This prospectus may not be used to complete sales of securities unless it is accompanied by a prospectus supplement.
       Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 3.
 
       Neither the Securities and Exchange Commission nor any state securities commission has approvedor disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
The date of this prospectus is                     , 2006.

 
TABLE OF CONTENTS
 	 	 	 	 	 	 	 	 	
 FORWARD-LOOKING INFORMATION	 	 	ii	 	 	 	 	 	
 OUR COMPANY	 	 	1	 	 	 	 	 	
 RATIO OF EARNINGS TO FIXED CHARGES	 	 	1	 	 	 	 	 	
 ABOUT THIS PROSPECTUS	 	 	2	 	 	 	 	 	
 RISK FACTORS	 	 	3	 	 	 	 	 	
 USE OF PROCEEDS	 	 	22	 	 	 	 	 	
 DESCRIPTION OF DEPOSITARY UNITS	 	 	23	 	 	 	 	 	
 DESCRIPTION OF PREFERRED UNITS	 	 	25	 	 	 	 	 	
 OUR PARTNERSHIP AGREEMENT AND CERTAIN PROVISIONS OF DELAWARE LAW	 	 	26	 	 	 	 	 	
 DESCRIPTION OF DEBT SECURITIES	 	 	33	 	 	 	 	 	
 DESCRIPTION OF WARRANTS TO PURCHASE DEBT SECURITIES	 	 	40	 	 	 	 	 	
 DESCRIPTION OF WARRANTS TO PURCHASE DEPOSITARY UNITS OR PREFERRED UNITS	 	 	41	 	 	 	 	 	
 PLAN OF DISTRIBUTION	 	 	42	 	 	 	 	 	
 LEGAL MATTERS	 	 	42	 	 	 	 	 	
 EXPERTS	 	 	42	 	 	 	 	 	
 WHERE YOU CAN FIND MORE INFORMATION	 	 	44	 	 	 	 	 	
 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	 	 	44	 	 	 	 	 	
 EX-4.7: FORM OF INDENTURE	
 FORM OF INDENTURE	
 OPINION OF DLA PIPER RUDNICK GRAY CARY US LLP	
 EX-12.1: RATIO OF EARNINGS TO FIXED CHARGES	
 EX-23.1: CONSENT OF GRANT THORNTON LLP	
 EX-23.2: CONSENT OF GRANT THORNTON LLP	
 EX-23.3: CONSENT OF KPMG LLP	
 EX-23.4: CONSENT OF KPMG LLP	
 EX-23.5: CONSENT OF ERNST & YOUNG LLP	
 EX-23.6: CONSENT OF DEGOLYER AND MACNAUGHTON	
 EX-23.7: CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.	
 EX-23.8: CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.	
 EX-23.9: CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.	
 EX-23.10: CONSENT OF PRATOR BETT, L.L.C.	
      You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell securities. The information in this document may only be accurate on the date of this document.

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FORWARD-LOOKING INFORMATION
      This prospectus and the information incorporated herein by reference contain forward-looking statements. These forward-looking statements are not historical facts, but rather our beliefs and expectations based on our current expectations, estimates, projections, beliefs and assumptions about our company and industry. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These risks include those set forth in the section of this prospectus called “Risk Factors.”
      Those risks are representative of factors that could affect the outcome of the forward-looking statements. These and the other factors discussed elsewhere in this prospectus and the documents incorporated by reference herein are not necessarily all of the important factors that cause our results to differ materially from those expressed in our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which reflect our view only as of the respective dates of this prospectus and the documents incorporated herein by reference or other dates which are specified in those documents.

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OUR COMPANY
      American Real Estate Partners, L.P., or AREP, is a master limited partnership formed in Delaware on February 17, 1987. We are a diversified holding company engaged in a variety of businesses.
      Our core businesses currently include oil and gas exploration and production, gaming, real estate and home fashion. We may also seek to acquire additional businesses that are distressed or in out-of-favor industries and will consider the divestiture of businesses from which we do not foresee adequate future cash flow or appreciation potential. In addition, we invest our available liquidity in debt and equity securities with a view to enhancing returns as we continue to assess further acquisitions of operating businesses.
      Our general partner is American Property Investors, Inc., the general partner, or API, a Delaware corporation, which is indirectly wholly owned by Carl C. Icahn. We own our businesses and conduct our investment activities through a subsidiary limited partnership, American Real Estate Holdings Limited Partnership, or AREH, in which we own a 99% limited partnership interest, and its subsidiaries. API also acts as the general partner for AREH. API has a 1% general partnership interest in each of us and AREH. As of March 1, 2006, affiliates of Mr. Icahn beneficially owned 55,655,382 units representing AREP limited partner interests, or the depositary units, representing approximately 90.0% of the outstanding depositary units, and 9,346,044 cumulative pay-in-kind redeemable preferred units, representing AREP limited partner interests, or the preferred units, representing approximately 86.5% of the outstanding preferred units.
      Our depositary units, representing limited partnership interests, trade on the New York Stock Exchange under the symbol “ACP.”
      As used in this prospectus, “we,” “us,” “our,” “company” and AREP mean American Real Estate Partners, L.P., and, unless the context indicates otherwise, include our subsidiaries.
      Our principal executive offices are located at 100 South Bedford Road, Mt. Kisco, New York 10549. Our phone number is (914) 242-7700.
      American Real Estate Finance Corp., or AREP Finance, a Delaware corporation, is our wholly-owned subsidiary. AREP Finance was incorporated on April 19, 2004 and was formed solely for the purpose of serving as a co-issuer of debt securities of AREP. AREP Finance does not and will not have any operations or assets and will not have any revenues. AREP Finance’s principal business address is 100 South Bedford Road, Mt. Kisco, New York 10549 and its telephone number is (914) 242-7700.
RATIO OF EARNINGS TO FIXED CHARGES
      The following table sets forth our ratio of earnings to fixed charges for the periods indicated. For purposes of computing the ratio of earnings to fixed charges, earnings represent earnings from continuing operations before income taxes, equity in earnings (loss) of investees and minority interest plus fixed charges. Fixed charges include (a) interest on indebtedness (whether expensed or capitalized), (b) amortization premiums, discounts and capitalized expenses related to indebtedness and (c) the portion of rent expense we believe to be representative of interest.
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Years Ended December 31,	 	
 	 	 	 	
 	 	2005	 	 	2004	 	 	2003	 	 	2002	 	 	2001	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ratio of earnings to fixed charges	 	 	—	(1)	 	 	2.4	 	 	 	2.0	 	 	 	2.4	 	 	 	2.2	 	

 	 	
(1) 	Fixed charges exceeded earnings by $41.7 million for 2005.	

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ABOUT THIS PROSPECTUS
      This prospectus is part of a registration statement that we filed with the SEC using a “shelf” registration process. Under this shelf process, we may offer, from time to time, in one or more offerings:
 	 	 	
 	• 	depositary units;	
 	 	 	
 	• 	preferred units;	
 	 	 	
 	• 	debt securities; or	
 	 	 	
 	• 	warrants to purchase our debt securities, depositary units or preferred units.	
      The total offering price of these securities will not exceed $1,000,000,000.
      This prospectus provides you with a general description of the securities we may offer. Each time we offer securities, we will provide you with a prospectus supplement that will describe the specific amounts, prices and terms of the securities we offer. The prospectus supplement also may add, update or change information contained in this prospectus.
      We may sell the securities to or through underwriters, dealers or agents or directly to purchasers. We and our agents reserve the sole right to accept and to reject in whole or in part any proposed purchase of securities. The prospectus supplement, which we will provide to you each time we offer securities, will provide the names of any underwriters, dealers or agents involved in the sale of the securities, and any applicable fee, commission or discount arrangements with them. See “Plan of Distribution.”

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RISK FACTORS
      Investing in our securities involves risks that could affect us and our business as well as the industries in which we operate and invest. Before purchasing our securities, you should carefully consider the following risks and the other information in this prospectus and the applicable prospectus supplement, as well as the documents incorporated by reference herein. Each of the risks described could result in a decrease in the value of our securities and your investment in them.
General
 	 	
 	Our general partner and its control person could exercise their influence over us to your detriment.	
      Mr. Icahn, through affiliates, currently owns 100% of API, our general partner, and approximately 90.0% of our depositary units and 86.5% of our preferred units, and, as a result, has the ability to influence many aspects of our operations and affairs. API also is the general partner of AREH.
      We have invested and may in the future invest in entities in which Mr. Icahn or his affiliates also invest or purchase investments from him or his affiliates. Although API has never received fees in connection with our investments, our partnership agreement allows for the payment of these fees. Mr. Icahn or his affiliates may pursue other business opportunities in which we compete and there is no requirement that any additional business opportunities be presented to us.
      The interests of Mr. Icahn and his affiliates including their interests in entities in which they and we have invested or may invest in the future, may differ from your interests as a unit holder and, as such, he and they may take actions that may not be in your interest. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, Mr. Icahn’s interests might conflict with your interests as a unit holder.
 	 	
 	Certain of our management are committed to the management of other businesses.	
      Certain of the individuals who conduct the affairs of API, including the chairman of our board of directors, Mr. Icahn, and our principal executive officer and vice chairman of the board of directors, Keith A. Meister, are, and will in the future be, committed to the management of other businesses owned or controlled by Mr. Icahn and his affiliates. Accordingly, these individuals may focus significant amounts of time and attention on managing these other businesses. Conflicts may arise between our interests and the other entities or business activities in which such individuals are involved. Conflicts of interest may arise in the future as such affiliates and we may compete for the same assets, purchasers and sellers of assets or financings.
 	 	
 	To service our indebtedness and pay distributions with respect to our units, we will require a significant amount of cash. Our ability to maintain our current cash position or generate cash depends on many factors beyond our control.	
      Our ability to make payments on and to refinance our indebtedness, to pay distributions with respect to our units and to fund operations will depend on existing cash balances and our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.
      Our current businesses and businesses that we acquire may not generate sufficient cash to service our debt. In addition, we may not generate sufficient cash flow from operations or investments and future borrowings may not be available to us in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

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 	We may be subject to the pension liabilities of our affiliates.	
      Mr. Icahn, through certain affiliates, currently owns 100% of API and approximately 90.0% of our outstanding depositary units and approximately 86.5% of our outstanding preferred units. Applicable pension and tax laws make each member of a “controlled group” of entities, generally defined as entities in which there is at least an 80% common ownership interest, jointly and severally liable for certain pension plan obligations of any member of the controlled group. These pension obligations include ongoing contributions to fund the plan, as well as liability for any unfunded liabilities that may exist at the time the plan is terminated. In addition, the failure to pay these pension obligations when due may result in the creation of liens in favor of the pension plan or the Pension Benefit Guaranty Corporation, or the PBGC, against the assets of each member of the controlled group.
      As a result of the more than 80% ownership interest in us by Mr. Icahn’s affiliates, we and our subsidiaries are subject to the pension liabilities of all entities in which Mr. Icahn has a direct or indirect ownership interest of at least 80%. One such entity, ACF Industries LLC, is the sponsor of several pension plans which are underfunded by a total of approximately $21.8 million on an ongoing actuarial basis and $135.2 million if those plans were terminated, as most recently reported by the plans’ actuaries. These liabilities could increase or decrease, depending on a number of factors, including future changes in promised benefits, investment returns, and the assumptions used to calculate the liability. As members of the controlled group, we would be liable for any failure of ACF to make ongoing pension contributions or to pay the unfunded liabilities upon a termination of the ACF pension plans. In addition, other entities now or in the future within the controlled group that includes us may have pension plan obligations that are, or may become, underfunded and we would be liable for any failure of such entities to make ongoing pension contributions or to pay the unfunded liabilities upon a termination of such plans.
      The current underfunded status of the ACF pension plans requires ACF to notify the PBGC of certain “reportable events,” such as if we cease to be a member of the ACF controlled group, or if we make certain extraordinary dividends or stock redemptions. The obligation to report could cause us to seek to delay or reconsider the occurrence of such reportable events.
      Starfire Holding Corporation, which is 100% owned by Mr. Icahn, has undertaken to indemnify us and our subsidiaries from losses resulting from any imposition of pension funding or termination liabilities that may be imposed on us and our subsidiaries or our or their assets as a result of being a member of the Icahn controlled group. The Starfire indemnity provides, among other things, that so long as such contingent liabilities exist and could be imposed on us, Starfire will not make any distributions to its stockholders that would reduce its net worth to below $250.0 million. Nonetheless, Starfire may not be able to fund its indemnification obligations to us.
 	 	
 	We are subject to the risk of becoming an investment company.	
      Because we are a holding company and a significant portion of our assets may, from time to time, consist of investments in companies in which we own less than a 50% interest, we run the risk of inadvertently becoming an investment company that is required to register under the Investment Company Act of 1940, as amended. Registered investment companies are subject to extensive, restrictive and potentially adverse regulation relating to, among other things, operating methods, management, capital structure, dividends and transactions with affiliates. Registered investment companies are not permitted to operate their business in the manner in which we operate our business, nor are registered investment companies permitted to have many of the relationships that we have with our affiliated companies.
      In order not to become an investment company required to register under the Investment Company Act, we monitor the value of our investments and structure transactions with an eye toward the Investment Company Act. As a result, we may structure transactions in a less advantageous manner than if we did not have Investment Company Act concerns, or we may avoid otherwise economically desirable transactions due to those concerns. In addition, events beyond our control, including significant appreciation or depreciation in the market value of certain of our publicly traded holdings or adverse developments with

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respect to our ownership of certain of our subsidiaries, such as our loss of control of WestPoint International, Inc., or WPI, could result in our inadvertently becoming an investment company.
      If it were established that we were an investment company, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, in an action brought by the SEC, that we would be unable to enforce contracts with third parties or that third parties could seek to obtain rescission of transactions with us undertaken during the period it was established that we were an unregistered investment company.
 	 	
 	We may become taxable as a corporation.	
      We operate as a partnership for federal income tax purposes. This allows us to pass through our income and deductions to our partners. We believe that we have been and are properly treated as a partnership for federal income tax purposes. However, the Internal Revenue Service, or IRS, could challenge our partnership status and we could fail to qualify as a partnership for past years as well as future years. Qualification as a partnership involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended. For example, a publicly traded partnership is generally taxable as a corporation unless 90% or more of its gross income is “qualifying” income, which includes interest, dividends, oil and gas revenues, real property rents, gains from the sale or other disposition of real property, gain from the sale or other disposition of capital assets held for the production of interest or dividends, and certain other items. We believe that in all prior years of our existence at least 90% of our gross income was qualifying income and we intend to structure our business in a manner such that at least 90% of our gross income will constitute qualifying income this year and in the future. However, there can be no assurance that such structuring will be effective in all events to avoid the receipt of more than 10% of non-qualifying income. If less than 90% of our gross income constitutes qualifying income, we may be subject to corporate tax on our net income at regular corporate tax rates. Further, if less than 90% of our gross income constituted qualifying income for past years, we may be subject to corporate level tax plus interest and possibly penalties. In addition, if we register under the Investment Company Act of 1940, it is likely that we would be treated as a corporation for U.S. federal income tax purposes and subject to corporate tax on our net income at regular corporate tax rates. The cost of paying federal and possibly state income tax, either for past years or going forward, would be a significant liability and would reduce our funds available to make interest and principal payments on the notes. To meet the qualifying income test we may structure transactions in a less advantageous manner or avoid otherwise economically desirable transactions.
 A successful IRS contest of the federal income tax positions we take may adversely affect the market for our depositary units, preferred units, or debt securities and the costs of any contest will be borne by us and, therefore, indirectly by our unitholders and our general partner.
      We have not requested a ruling from the IRS with respect to any matter affecting us. The IRS may adopt positions that differ from the positions we take. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we take. A court may not concur with some or all of the positions we take. Any contest with the IRS may materially and adversely affect the market for our depositary units, preferred units, or debt securities and the price at which they trade. In addition, the costs of any contest with the IRS, principally legal, accounting and related fees, will be borne indirectly by our unitholders and our general partner.
 	 	
 	During 2004 and 2005, we identified three significant deficiencies in our internal control over financial reporting. If we were to discover other significant deficiencies in the future, including at any recently acquired entity, it may affect adversely our ability to provide timely and reliable financial information and satisfy our reporting obligations under federal securities laws, which also could affect our ability to remain listed with the New York Stock Exchange or the market price of our depositary units.	
      Effective internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable

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financial reports or prevent fraud, our reputation and operating results would be harmed. We have discovered two significant deficiencies in internal controls at the Holding Company and one of a subsidiary as defined under interim standards adopted by the Public Company Accounting Oversight Board, or PCAOB, that require remediation. A “significant deficiency” is a control deficiency, or combination of control deficiencies, that adversely affect a company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with generally accepted accounting principles such that there is a more than remote likelihood that a misstatement of a company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected.
      Throughout 2005, we implemented processes to address a significant deficiency in our consolidation process reported by management in 2004 during its evaluation of the effectiveness of the design and operation of our disclosure controls and procedures and our internal controls over financial reporting.
      During the third quarter of 2005, we identified a significant deficiency related to our periodic reconciliation, review and analysis of investment accounts. This significant deficiency arose from a lack of monitoring and review controls. We have engaged additional resources and enhanced our treasury function to provide what we believe is the appropriate level of control.
      During the fourth quarter of 2005, National Energy Group, Inc.’s management identified a significant deficiency related to the lack of a detailed review of the assumptions utilized in the determination of its deferred tax asset valuation allowance. National Energy Group has implemented procedures to verify the detailed review of the tax provision by its third party tax advisor including verification of the review and validation of all assumptions used in the determination of the deferred tax asset valuation allowance. Neither WPI nor Atlantic Coast Entertainment Holdings, Inc. has completed its review of internal control over financial reporting.
      To the extent that any material weakness or significant deficiency exists in our or our consolidated subsidiaries internal control over financial reporting, such deficiencies may adversely affect our ability to provide timely and reliable financial information necessary for the conduct of our business and satisfaction of our reporting obligations under federal securities laws, which could affect our ability to remain listed with the New York Stock Exchange. Ineffective internal and disclosure controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our depositary units or the rating of our debt.
Risks Relating to Our Equity Securities
 	 	
 	The market for our securities may be volatile.	
      The market for our equity securities may be subject to disruptions that could cause substantial volatility in their prices. Any such disruptions may adversely affect the value of your securities.
 	 	
 	The price for our depositary units listed on the New York Stock Exchange may not be indicative of their fair value.	
      Our depositary units are currently listed on the New York Stock Exchange, or NYSE. The trading volume for our depositary units historically has been limited. During the period from September 30, 2005 through December 31, 2005, the average daily trading volume of our depositary units has been approximately 10,379 depositary units. During this period, the market price of our depositary units has ranged from $28.70 to $47.37. During the period from January 1, 2006 through March 31, 2006, the average daily trading volume of our depositary units has been approximately 13,374 depositary units. During this period, the market price of our depositary units has ranged from $33.54 to $47.37. On April 11, 2006, the closing price per depositary unit as listed on the NYSE was $45.60. The prices at which our depositary units have been listed may not be indicative of their fair value. If you purchase our depositary units, you may not be able to resell those depositary units at or above your purchase price. In addition, an active public trading market for our depositary units may not develop or, if developed, may

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not be sustained. We cannot assure you that any securities analysts will initiate or maintain coverage of our company and our depositary units.
 	 	
 	We have only recently made cash distributions to our unitholders and future distributions, if any, can be affected by numerous factors.	
      We made cash distributions with respect to each of the third and fourth quarters of 2005 in the amount of $.10 per depositary unit and our board of directors approved a cash distribution of $0.10 per depositary unit in the first quarter of 2006. The payment of future distributions will be determined by the board of directors of our general partner quarterly, based on a review of a number of factors, including those described below and other factors that it deems relevant at the time that declaration of a distribution is considered. Our ability to pay distributions will depend on numerous factors, including: the availability of adequate cash flow from operations; the proceeds, if any, from divestitures; our capital requirements and other obligations; restrictions contained in our and our subsidiaries’ financing arrangements, and our issuances of additional equity and debt securities. The availability of cash flow in the future depends as well upon events and circumstances outside our control, including prevailing economic and industry conditions and financial, business and similar factors. No assurance can be given that we will be able to make distributions or as to the timing of any distribution. If distributions are made, there can be no assurance that holders of depositary units may not be required to recognize taxable income in excess of cash distributions made in respect of the period in which a distribution is made.
 	 	
 	Holders of our depositary units have limited voting rights, rights to participate in our management and control of us.	
      Our general partner manages and operates AREP. Unlike the holders of common stock in a corporation, holders of outstanding units have only limited voting rights on matters affecting our business. Holders of depositary units have no right to elect the general partner on an annual or other continuing basis, and our general partner generally may not be removed except pursuant to the vote of the holders of not less than 75% of the outstanding depositary units. In addition, removal of the general partner may result in a default under our debt securities. As a result, given that Mr. Icahn and his affiliates own 90.0% of our outstanding depositary units, holders of depositary units other than Mr. Icahn and his affiliates have limited say in matters affecting our operations, and may find it difficult to attempt to gain control or influence our activities.
 	 	
 	Holders of depositary units may not have limited liability in certain circumstances and may be liable for the return of distributions that cause our liabilities to exceed our assets.	
      We conduct our businesses through AREH in several states. Maintenance of limited liability will require compliance with legal requirements of those states. We are the sole limited partner of AREH. Limitations on the liability of a limited partner for the obligations of a limited partnership have not clearly been established in several states. If it were determined that AREH has been conducting business in any state without compliance with the applicable limited partnership statute or the possession or exercise of the right by the partnership, as limited partner of AREH, to remove AREH’s general partner, to approve certain amendments to the AREH partnership agreement or to take other action pursuant to the AREH partnership agreement, constituted “control” of AREH’s business for the purposes of the statutes of any relevant state, AREP and/or unitholders, under certain circumstances, might be held personally liable for AREH’s obligations to the same extent as our general partner. Further, under the laws of certain states, AREP might be liable for the amount of distributions made to AREP by AREH.
      Holders of our depositary units may also have to repay AREP amounts wrongfully distributed to them. Under Delaware law, we may not make a distribution to holders of common units if the distribution causes our liabilities to exceed the fair value of our assets. Liabilities to partners on account of their partnership interests and nonrecourse liabilities are not counted for purposes of determining whether a distribution is permitted. Delaware law provides that a limited partner who receives such a distribution and knew at the time of the distribution that the distribution violated Delaware law will be liable to the limited partnership for the distribution amount for three years from the distribution date.

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      Additionally, under Delaware law an assignee who becomes a substituted limited partner of a limited partnership is liable for the obligations, if any, of the assignor to make contributions to the partnership. However, such an assignee is not obligated for liabilities unknown to him or her at the time he or she became a limited partner if the liabilities could not be determined from the partnership agreement.
Risks Relating to Our Structure
 	 	
 	We are a holding company and will depend on the businesses of our subsidiaries to satisfy our obligations.	
      We are a holding company. In addition to cash and cash equivalents, U.S. government and agency obligations, marketable equity and debt securities and other short-term investments, our assets consist primarily of investments in our subsidiaries. Moreover, if we make significant investments in operating businesses, it is likely that we will reduce the liquid assets at AREP and AREH in order to fund those investments and ongoing operations. Consequently, our cash flow and our ability to meet our debt service obligations and make distributions with respect to depositary units and preferred units likely will depend on the cash flow of our subsidiaries and the payment of funds to us by our subsidiaries in the form of loans, dividends, distributions or otherwise.
      The operating results of our subsidiaries may not be sufficient to make distributions to us. In addition, our subsidiaries are not obligated to make funds available to us, and distributions and intercompany transfers from our subsidiaries to us may be restricted by applicable law or covenants contained in debt agreements and other agreements to which these subsidiaries may be subject or enter into in the future. The terms of any borrowings of our subsidiaries or other entities in which we own equity may restrict dividends, distributions or loans to us. For example, the notes issued by our indirect wholly-owned subsidiary, American Casino & Entertainment Properties LLC, or ACEP, contain restrictions on dividends and distributions and loans to us, as well as on other transactions with us. ACEP also has a credit agreement which contains financial covenants that have the effect of restricting dividends or distributions. Our subsidiary, NEG Oil & Gas LLC, has a credit facility which restricts dividends, distributions and other transactions with us. These agreements preclude our receiving payments from the operations of our Gaming and our Oil & Gas properties which account for a significant portion of our revenues and cash flows. We are negotiating similar facilities for WPI, Atlantic Coast and our real estate development properties which may also restrict dividends, distributions and other transactions with us. To the degree any distributions and transfers are impaired or prohibited, our ability to make payments on our debt will be limited.
 	 	
 	We or our subsidiaries may be able to incur substantially more debt.	
      We or our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our 8.125% senior notes due 2012 and our 7.125% senior notes due 2013 do not prohibit us or our subsidiaries from doing so. We may incur additional indebtedness if we comply with certain financial tests contained in the indentures that govern these notes. As of December 31, 2005, based upon these tests, we could have incurred up to approximately $1.4 billion of additional indebtedness. Our subsidiaries, other than AREH, are not subject to any of the covenants contained in the indentures with respect to our debt, including the covenant restricting debt incurrence. If new debt is added to our and our subsidiaries’ current debt levels, the related risks that we, and they now face could intensify.
 	 	
 	Our failure to comply with the covenants contained under any of our debt instruments, including the indentures governing our outstanding notes, including our failure as a result of events beyond our control, could result in an event of default which would materially and adversely affect our financial condition.	
      If there were an event of default under one of our debt instruments, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately. In addition, any event of default or declaration of acceleration under one debt instrument could result in an

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event of default under one or more of our other debt instruments. It is possible that, if the defaulted debt is accelerated, our assets and cash flow may not be sufficient to fully repay borrowings under our outstanding debt instruments and we cannot assure you that we would be able to refinance or restructure the payments on those debt securities.
 	 	
 	To service our indebtedness and pay distributions with respect to our units, we will require a significant amount of cash. Our ability to maintain our current cash position or generate cash depends on many factors beyond our control.	
      Our ability to make payments on and to refinance our indebtedness, to pay distributions with respect to our units and to fund operations will depend on existing cash balances and our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.
      In addition, we may not generate sufficient cash flow from operations or investments and future borrowings may not be available to us in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity needs. For 2005, fixed charges exceeded earnings, as defined by rules of the SEC, by $41.7 million. We may need to refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.
Risks Relating to Our Business
 	 	
 	General	
      In addition to the following risk factors specific to each of our businesses, all of our businesses are subject to the effects of the following:

 	• 	the continued threat of terrorism;	

 	 	 	
 	• 	economic downturn;	

 	 	 	
 	• 	loss of any of our or our subsidiaries key personnel;	

 	 	 	
 	• 	the availability, as needed, of additional financing; and;	

 	 	 	
 	• 	the continued availability of insurance at acceptable rates.	
 	 	 	
Oil & Gas
 	 	
 	Oil and gas prices are volatile. A decrease in oil and natural gas prices could have a material adverse effect on our business, financial condition, cash flows or results of operations.	
      A substantial decline in the prices NEG Oil & Gas receives for our oil and gas production would have a material adverse effect on NEG Oil & Gas, as our future financial condition, revenues, results of operations, cash flows, rate of growth and the carrying value of our oil and gas properties depend primarily upon those prices. For example, changes in the prices we receive for oil and gas could affect our ability to finance capital expenditures, make acquisitions, pay dividends, borrow money and satisfy our financial obligations. In addition, declines in prices could reduce the amount of oil and natural gas that we can produce economically and, as a result, could have a material adverse effect on our reserves. Oil and natural gas are commodities and their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, prices have been volatile and are likely to continue to be volatile in the future, especially given current world geopolitical conditions. The prices of oil and gas are affected by a variety of other factors that are beyond our control, including:
 	 	 	
 	• 	changes in global supply and demand for oil and natural gas;	
 	 	 	
 	• 	commodity processing, gathering and transportation availability;	
 	 	 	
 	• 	actions of the Organization of Petroleum Exporting Countries;	
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 	• 	domestic and foreign governmental regulations and taxes;	
 	 	 	
 	• 	domestic and foreign political conditions, including embargoes, affecting oil-producing activity;	
 	 	 	
 	• 	the level of global oil and natural gas exploration activity and inventories;	
 	 	 	
 	• 	the price and availability of domestic and imported oil and natural gas;	
 	 	 	
 	• 	the price, availability and consumer acceptance of alternative fuel sources;	
 	 	 	
 	• 	the availability of refining capacity;	
 	 	 	
 	• 	technological advances affecting energy consumption;	
 	 	 	
 	• 	weather conditions;	
 	 	 	
 	• 	financial and commercial market uncertainty;	
 	 	 	
 	• 	worldwide economic conditions; and	
 	 	 	
 	• 	disruptions as a result of natural calamities.	
      These factors and the volatility of the energy markets generally make it extremely difficult to predict future oil and gas price movements. Our production is weighted toward natural gas, making earnings and cash flow more sensitive to natural gas price fluctuations.
 	 	
 	Estimating our reserves, production and future net cash flow is difficult to do with any certainty.	
      Estimating quantities of proved oil and gas reserves is a complex process that requires interpretations of available technical data and various estimates, including estimates based upon assumptions relating to economic factors, including future commodity prices, production costs, production and ad valorem taxes and availability of capital, estimates of required capital expenditures and workover and remedial costs, and the assumed effect of governmental regulation. In addition, there are numerous uncertainties about when reserves may be classified as proved as opposed to possible or probable. Furthermore, actual results will vary from our estimates and such variances may be significant.
      At December 31, 2005, 50% of the estimated proved reserves for NEG Oil & Gas were proved undeveloped and 8% were proved developed non-producing. Estimates of proved undeveloped reserves and proved developed non-producing reserves are almost always based on analogy to existing wells instead of the performance data used to estimate producing reserves. Recovery of proved undeveloped reserves requires significant capital expenditures and successful drilling operations. Revenues from estimated proved developed non-producing reserves will not be realized until some time in the future, if at all. The reserve data assumes that we will be required to make significant capital expenditures to develop its reserves. Although we have prepared estimates of our reserves and the costs associated with these reserves in accordance with industry standards, these estimates may not be accurate, development may not occur as scheduled and actual results may not be as estimated.
 	 	
 	Prospects that we decide to drill may not yield gas or oil in commercially viable quantities.	
      A prospect is a property on which NEG Oil & Gas has identified what our geoscientists believe, based on available seismic and geological information, to be indications of gas or oil. NEG Oil & Gas’ prospects are in various stages of evaluation, ranging from a prospect that is ready to drill to a prospect that will require substantial additional seismic data processing and interpretation. However, the use of seismic data and other technologies and the study of producing fields in the same area will not enable NEG Oil & Gas to know conclusively prior to drilling and testing whether gas or oil will be present or, if present, whether gas or oil will be present in sufficient quantities to recover drilling or completion costs or to be economically viable. From January 1, 2003 through December 31, 2005, NEG Oil & Gas participated in drilling a total of 279 gross wells, of which 25 have been identified as dry holes. If we drill additional wells that we identify as dry holes in our current and future prospects, our drilling success rate may decline and materially harm our business.

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 	Our Oil & Gas business involves significant operating risks.	
      Our operations are subject to all the risks normally incident to the operation and development of oil and natural gas properties and the drilling of oil and gas wells, including:
 	 	 	
 	• 	well blowouts;	
 	 	 	
 	• 	craterings and explosions;	
 	 	 	
 	• 	pipe failures and ruptures;	
 	 	 	
 	• 	pipeline accidents and failures;	
 	 	 	
 	• 	casing collapses;	
 	 	 	
 	• 	unexpected formations or pressures;	
 	 	 	
 	• 	fires;	
 	 	 	
 	• 	mechanical and operational problems that affect production;	
 	 	 	
 	• 	formations with abnormal pressures;	
 	 	 	
 	• 	uncontrollable flows of oil, natural gas, brine or well fluids; and	
 	 	 	
 	• 	releases of contaminants into the environment, including groundwater contamination.	
      In addition to lost production and increased costs, these hazards could cause serious injuries, fatalities, contamination or property damage for which NEG Oil & Gas could be held responsible. The potential consequences of these hazards are particularly severe for NEG Oil & Gas because a significant portion of our operations are conducted offshore and in other environmentally sensitive areas. While NEG Oil & Gas maintains insurance against many of these risks, we do not maintain insurance in amounts that cover all of the losses to which we may be subject, and the insurance we have may not continue to be available on acceptable terms. The occurrence of an uninsured or underinsured loss could result in significant costs that could have a material adverse effect on our financial condition and operations.
 	 	
 	The marketability of our production is dependent upon gathering systems, transportation facilities and processing facilities that we do not control.	
      Market conditions and the unavailability of satisfactory oil and natural gas transportation arrangements may hinder our access to oil and natural gas markets or delay our production. The marketability of our oil and natural gas production depends in part upon the availability, proximity and capacity of pipelines, gas gathering systems, transportation barges and processing facilities owned by third parties. We do not control these facilities and they may not be available to us in the future. Alternative delivery methods could be either prohibitively expensive or available only after a period of delay, if at all.
      Any significant change in relationships with third party operators or market factors affecting operator of any third-party transportation and processing facilities NEG Oil & Gas uses could adversely impact its ability to deliver to market the oil and natural gas we produce and thereby cause a significant interruption in our operations. These are risks for which NEG Oil & Gas generally does not maintain insurance. Accordingly, our financial condition and results of operations would be adversely affected if one or more transportation, gathering or processing facility, became unavailable or otherwise unable to provide services.
 	 	
 	Commodity price risk management activities may limit future revenues from price increases and result in financial losses or reduce its income.	
      To reduce exposure to fluctuations in the prices of oil and gas, NEG Oil & Gas enters into derivative contracts with respect to a substantial portion of its oil and gas production. Its revolving credit facility currently permits us to use derivatives for up to 80% of the expected volumes associated with proved developed producing reserves. Derivative contracts expose us to risk of financial loss in some circumstances, including when:
 	 	 	
 	• 	production is less than expected;	
 	 	 	
 	• 	a counterparty to a derivative contract fails to perform under the contract;	
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 	• 	there is a change in the expected differential between the underlying price in the derivative contract and actual prices received; or	
 	 	 	
 	• 	there is a sudden, unexpected event that materially impacts oil or natural gas prices.	
      Total net realized losses on derivative instruments included in the oil and gas revenues for NEG Oil & Gas were $51.3 million in 2005 and $16.6 million in 2004. In addition, rising oil and gas prices caused us to incur unrealized commodity derivative losses of $69.3 million in 2005. These unrealized losses resulted because we do not elect hedge accounting treatment for our derivative positions. Changes in the fair market value of the derivative positions were therefore required to be recognized in our statement of operations.
      NEG Oil & Gas may incur realized and unrealized losses of this type in the future. Derivative contracts may also limit the benefit we would otherwise receive from increases in the prices for oil and gas. Oil and gas revenues may continue to experience significant volatility in the future due to changes in the fair value of the derivative contracts. The prices NEG Oil & Gas receives for our oil and gas production affect its:
 	 	 	
 	• 	cash flow available for capital expenditures:	
 	 	 	
 	• 	ability to borrow and raise additional capital;	
 	 	 	
 	• 	quantity of oil and natural gas it can produce;	
 	 	 	
 	• 	quantity of oil and gas reserves; and	
 	 	 	
 	• 	operating results for oil and natural gas activities.	
      NEG Oil & Gas generally enters into derivative contracts for a substantial portion of our expected future oil and gas production to reduce our exposure to commodity price decreases. Changes in the fair value of our derivatives contracts have a direct effect on our revenue.
      NEG Oil & Gas has used cost-free collars and options to put products to a purchaser at a specified price, or floor. In these transactions, NEG Oil & Gas will usually have the option to receive from the counterparty to the derivative contracts a specified price or the excess of a specified price over a floating marketing price. If the floating price exceeds the fixed price, the party to the derivative contract is required to pay the counterparty all or a portion of these differences multiplied by the quantity subject to the derivative contract.
      As of December 31, 2005, NEG Oil & Gas was not a party to any derivative contracts that require an initial deposit of cash collateral. However, its working capital could be impacted in the future if it enters into derivative arrangements that require cash collateral and commodity prices subsequently change in a manner adverse to us. Further, the obligation to post cash or other collateral could, if imposed, adversely affect our liquidity.
 	 	
 	We may experience difficulty finding and acquiring additional reserves and may be unable to compensate for the depletion of proved reserves.	
      The future success and growth of our operations depend upon the ability of NEG Oil & Gas to find or acquire additional economically recoverable oil and gas reserves. Except to the extent that it conducts successful exploration or development activities or acquires properties containing proved reserves, our proved reserves will generally decline as they are produced. The decline rate varies depending upon reservoir characteristics and other factors. Future oil and gas reserves and production, and, therefore, cash flow and income will be highly dependent upon the level of success in exploiting current reserves and acquiring or finding additional reserves. The business of exploring for, developing or acquiring reserves is capital intensive. To the extent cash flow from operations is not sufficient and external sources of capital become limited or unavailable, the ability to make the necessary capital investments to maintain or expand our asset base of oil and gas reserves could be impaired. Development projects and acquisition activities may not result in additional reserves. NEG Oil & Gas may not have success drilling productive wells at economic returns sufficient to replace our current and future production and reserves which we acquire may contain undetected problems or issues that did not initially appear to be significant to us.

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 	Shortages of oil field equipment, services and qualified personnel could reduce our cash flow and adversely affect the results of operations of NEG Oil & Gas.	
      The demand for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists, engineers and other professionals in the oil and natural gas industry can fluctuate significantly, often in correlation with oil and natural gas prices, causing periodic shortages. Historically, there have been shortages of drilling rigs and other oil field equipment as demand for rigs and equipment has increased along with the number of wells being drilled. These factors also cause significant increases in costs for equipment, services and personnel. Higher oil and natural gas prices generally stimulate demand and result in increased prices for drilling rigs, crews and associated supplies, equipment and service. It is beyond the control and ability of NEG Oil & Gas to predict whether these conditions will exist in the future and, if so, what their timing and duration will be. These types of shortages or price increases could significantly decrease the profit margin, cash flow and operating results, or restrict our ability to drill the wells and conduct the operations which we currently have planned and budgeted.
 	 	
 	Oil and gas exploration, exploitation and development activities may not be successful.	
      Exploration, exploitation and development activities are subject to many risks. For example, we cannot assure you that new wells drilled by NEG Oil & Gas will be productive or that NEG Oil & Gas will recover all or any portion of its investment in such wells. Drilling for oil and gas often involves unprofitable efforts, not only from dry wells but also from wells that are productive but do not produce sufficient oil or gas to return a profit at then-realized prices after deducting drilling, operating and other costs. The seismic data and other technologies that are used do not allow NEG Oil & Gas to know conclusively prior to drilling a well that oil or gas is present or that it can be produced economically. The cost of exploration, exploitation and development activities is subject to numerous uncertainties beyond our control, and cost factors can adversely affect the economics of a project. Further, our development activities may be curtailed, delayed or canceled as a result of numerous factors, including:
 	 	 	
 	• 	title problems;	
 	 	 	
 	• 	problems in delivery of our oil and natural gas to market;	
 	 	 	
 	• 	pressure or irregularities in geological formations;	
 	 	 	
 	• 	equipment failures or accidents;	
 	 	 	
 	• 	shortages of, or delays in obtaining, equipment or qualified personnel;	
 	 	 	
 	• 	adverse weather conditions;	
 	 	 	
 	• 	reductions in oil and natural gas prices;	
 	 	 	
 	• 	compliance with environmental and other governmental requirements; and	
 	 	 	
 	• 	costs of, or shortages or delays in the availability of, drilling rigs, equipment and services.	

 	Our acquisition activities may not be successful.	
      NEG Oil & Gas intends to acquire additional oil and gas properties, or businesses that own or operate such properties, when attractive opportunities arise. NEG Oil & Gas may not be able to identify suitable acquisition opportunities. If NEG Oil & Gas does identify an appropriate acquisition candidate, it may be unable to negotiate mutually acceptable terms with the seller or finance the acquisition. As a result of recent increases in oil and gas prices, acquisition prices also have increased, potentially making it more difficult for us to identify and complete acquisitions suitable for us. If NEG Oil & Gas is unable to complete suitable acquisitions, it will be more difficult to replace reserves. In addition, successfully completed acquisitions involve a number of risks, including:
 	 	 	
 	• 	unexpected losses of key employees, customers and suppliers of an acquired business;	
 	 	 	
 	• 	difficulties in conforming the financial, technical and management standards, processes, procedures and controls of the acquired business with those of our existing operations; and	
 	 	 	
 	• 	diversion of management and other resources.	
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      Moreover, the success of any acquisition will depend on a variety of factors, including the ability of NEG Oil & Gas to accurately assess the reserves associated with the property, future oil and gas prices and operating costs, potential environmental and other liabilities and other factors. These assessments are necessarily inexact. As a result, it may not recover the purchase price of a property from the sale of production from the property or recognize an acceptable return from such sales. The risks normally associated with acquisitions are heightened in the current environment, as market prices of oil and gas properties are generally high compared to historical norms and could continue to rise. In addition, NEG Oil & Gas may face greater risks if we acquire properties in areas where we may be less familiar with operating, regulatory and other issues specific to those areas.
 	 	
 	We may not be able to compete successfully in the future with respect to acquiring prospective reserves, developing reserves, marketing its production, attracting and retaining quality personnel, implementing new technologies and raising additional capital.	
      NEG Oil & Gas operates in a competitive environment for acquiring properties, marketing oil and gas, integrating new technologies and employing skilled personnel. Many of its competitors possess and employ substantially greater financial, technical and personnel resources. Those companies may be willing and able to pay more for producing oil and natural gas properties and prospects than the financial resources of NEG Oil & Gas permits, and may be able to define, evaluate, bid for and purchase a greater number of properties and prospects. Competitors may also enjoy technological advantages over us and may be able to implement new technologies more rapidly. Additionally, there is substantial competition for capital available for investment in the oil and natural gas industry.
 	 	
 	We cannot control activities on properties we do not operate. If NEG Oil & Gas is not able to fund required capital expenditures with respect to non-operated properties, it may result in a reduction or forfeiture of the interests of NEG Oil & Gas in those properties.	
      Other companies operated approximately 41% of the value of our proved reserves as of December 31, 2005. NEG Oil & Gas has limited ability to exercise influence over operations for these properties or their associated costs. Our dependence on the operator and other working interest owners for these projects and our limited ability to influence operations and associated costs could prevent the realization of our targeted returns on capital with respect to exploration, exploitation, development or acquisition activities. The success and timing of exploration, exploitation and development activities on properties operated by others depend upon a number of factors that may be outside our control including:
 	 	 	
 	• 	the timing and amount of capital expenditures;	
 	 	 	
 	• 	the operator’s expertise and financial resources;	
 	 	 	
 	• 	approval of other participants in drilling wells; and	
 	 	 	
 	• 	selection of technology.	
      Where we are not the majority owner or operator of a particular oil and natural gas project, we may have no control over the timing or amount of capital expenditures associated with the project. If we are not willing and able to fund required capital expenditures relating to a project when required by the majority owner or operator, our interests in the project may be reduced or forfeited.
 	 	
 	Our activities are subject to complex laws and regulations, including environmental laws and regulations, that can adversely affect the cost, manner and feasibility of doing business.	
      Operations and facilities of NEG Oil & Gas are subject to extensive federal, state and local laws and regulations relating to exploration for, and the exploitation, development, production and transportation of, oil and gas, including environmental and safety matters. In addition, certain laws impose strict liability for the costs of remediating contamination at properties that NEG Oil & Gas owns or operates or where

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wastes generated by our operations have been disposed, regardless of whether such disposal was lawful at the time that it occurred. Applicable laws and regulations include those relating to:
 	 	 	
 	• 	land use restrictions where many of our operations are located;	
 	 	 	
 	• 	drilling bonds and other financial responsibility requirements;	
 	 	 	
 	• 	spacing of wells;	
 	 	 	
 	• 	emissions into the air;	
 	 	 	
 	• 	unitization and pooling of properties;	
 	 	 	
 	• 	habitat and endangered species protection, reclamation and remediation;	
 	 	 	
 	• 	the containment and disposal of hazardous substances, oil field waste and other waste materials;	
 	 	 	
 	• 	the use of underground storage tanks;	
 	 	 	
 	• 	the use of underground injection wells, which affects the disposal of water and other produced liquids from our wells;	
 	 	 	
 	• 	safety precautions;	
 	 	 	
 	• 	the prevention of oil spills;	
 	 	 	
 	• 	releases of contaminants into the environment;	
 	 	 	
 	• 	wetlands protection;	
 	 	 	
 	• 	the closure of exploration and production facilities; and	
 	 	 	
 	• 	operational reporting requirements.	
      Under these laws and regulations, NEG Oil & Gas could be liable for:
 	 	 	
 	• 	governmental sanctions, such as fines, penalties, and injunctive relief;	
 	 	 	
 	• 	property and natural resource damages;	
 	 	 	
 	• 	releases or discharges of hazardous materials;	
 	 	 	
 	• 	well reclamation costs;	
 	 	 	
 	• 	oil spill clean-up costs;	
 	 	 	
 	• 	other remediation and clean-up costs;	
 	 	 	
 	• 	plugging and abandonment costs, which may be particularly high in the case of offshore facilities;	
 	 	 	
 	• 	personal injuries; and	
 	 	 	
 	• 	other environmental damages.	
      Although NEG Oil & Gas believes it is in substantial compliance with all applicable environmental laws and regulations and that its liabilities are not material, we cannot be certain that existing environmental laws or regulations applicable to our operations, as currently interpreted or reinterpreted in the future, or future laws or regulations, will not harm our business, results of operations and financial condition.
      Some environmental laws and regulations impose strict liability. Strict liability means that in some situations NEG Oil & Gas could be exposed to liability for clean-up costs and other damages as a result of conduct that was lawful at the time it occurred or for the conduct of prior operators or other third parties. In addition, we may be required to make large and unanticipated capital expenditures to comply with applicable laws and regulations, for example by installing and maintaining pollution control devices. Similarly, plugging and abandonment obligations will be substantial and may be more than NEG Oil & Gas has estimated. It is not possible for us to estimate reliably the amount and timing of all future

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expenditures related to environmental matters, but they may be material. In addition, our operations could be adversely affected by federal and state laws that require environmental impact studies to be conducted before governmental authorities can take certain actions, including, in some cases, the issuance of permits to us. Environmental risks generally are not fully insurable.
 	 	
 	We may be required to write down the carrying value of our properties.	
      Under full cost accounting rules, NEG Oil & Gas may be required to write down the carrying value of properties when oil and gas prices decrease or when there are substantial downward adjustments of estimated proved reserves, increases in our estimates of development costs or deterioration in our exploration results. NEG Oil & Gas uses the full cost method of accounting for oil and gas exploitation, development and exploration activities. Under full cost accounting rules, NEG Oil & Gas performs a “ceiling test.” This test is an impairment test and generally establishes a maximum, or “ceiling,” of the book value of oil and gas properties that is equal to the expected after-tax present value of the future net cash flows from proved reserves, including the effect of cash flow hedges, calculated using prevailing prices on the last day of the relevant period. If the net book value of properties, reduced by any related net deferred income tax liability, exceeds the ceiling, NEG Oil & Gas writes down the book value of the properties. Depending on the magnitude of any future impairments, a ceiling test write down could significantly reduce NEG Oil & Gas’ income or produce a loss. Ceiling test computations use commodity prices prevailing on the last day of the relevant period, making it impossible to predict the timing and magnitude of any future write downs. To the extent finding and development costs increase, NEG Oil & Gas will become more susceptible to ceiling test write downs in low price environments.
 	 	
 	Changes in the financial condition of any of our large oil and gas purchasers could make it difficult to collect amounts due from those purchasers.	
      For 2005, 68% of our oil and natural gas revenues were generated from sales to six purchasers. A material adverse change in the financial conditions of any these purchasers could adversely impact future revenues and our ability to collect current accounts receivable from such purchasers. Additionally, the loss of any of these purchasers could have an adverse impact on our revenues.
Gaming
 	 	
 	The gaming industry is highly regulated. The gaming authorities and state and municipal licensing authorities have significant control over our operations.	
      Our properties currently conduct licensed gaming operations in Nevada and New Jersey. Various regulatory authorities, including the Nevada State Gaming Control Board, Nevada Gaming Commission and the New Jersey Casino Control Commission, require our properties to hold various licenses and registrations, findings of suitability, permits and approvals to engage in gaming operations and to meet requirements of suitability. These gaming authorities also control approval of ownership interests in gaming operations. These gaming authorities may deny, limit, condition, suspend or revoke our gaming licenses, registrations, findings of suitability or the approval of any of our ownership interests in any of the licensed gaming operations conducted in Nevada and New Jersey, any of which could have a significant adverse effect on our business, financial condition and results of operations, for any cause they may deem reasonable. If we violate gaming laws or regulations that are applicable to us, we may have to pay substantial fines or forfeit assets. If, in the future, we operate or have an ownership interest in casino gaming facilities located outside of Nevada or New Jersey, we may also be subject to the gaming laws and regulations of those other jurisdictions.
      The sale of alcoholic beverages at our Gaming properties is subject to licensing and regulation by local authorities. Any limitation, condition, suspension or revocation of any such license, and any disciplinary action may, and revocation would, reduce the number of visitors to our casinos to the extent the availability of alcoholic beverages is important to them. Any reduction in our number of visitors will reduce our revenue and cash flow.

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 	Rising operating costs for our gaming properties could have a negative impact on our profitability.	
      The operating expenses associated with our gaming properties could increase due to some of the following factors:
 	 	 	
 	• 	our properties use significant amounts of electricity, natural gas and other forms of energy, and energy price increases may reduce our profitability;	
 	 	 	
 	• 	our Nevada properties use significant amounts of water and a water shortage may adversely affect our operations;	
 	 	 	
 	• 	some of our employees are covered by collective bargaining agreements and we may incur higher costs or work slow-downs or stoppages due to union activities; and	
 	 	 	
 	• 	our reliance on slot machine revenues and the concentration of manufacturing of slot machines in certain companies could impose additional costs on us.	

 	We face substantial competition in the gaming industry.	
      The Gaming industry in general, and the markets in which we compete in particular, are highly competitive:
 	 	 	
 	• 	we compete with many world class destination resorts with greater name recognition, different attractions, amenities and entertainment options;	
 	 	 	
 	• 	we compete with the continued growth of gaming on Native American tribal lands;	
 	 	 	
 	• 	the existence of legalized gambling in other jurisdictions may reduce the number of visitors to our properties;	
 	 	 	
 	• 	certain states have legalized, and others may legalize, casino gaming in specific venues, including race tracks and/or in specific areas, including metropolitan areas from which we traditionally attract customers; and	
 	 	 	
 	• 	our properties also compete and will in the future compete with all forms of legalized gambling.	
      Many of our competitors have greater financial, selling and marketing, technical and other resources than we do. We may not be able to compete effectively with our competitors and we may lose market share, which could reduce our revenue and cash flow.
 	 	
 	Our acquisition of the Flamingo in Laughlin, Nevada and the Traymore site in Atlantic City, New Jersey may not be successful.	
      Our subsidiary, American Casino & Entertainment LLC, through its subsidiaries, AREP Laughlin Corporation and AREP Boardwalk LLC, has entered into an agreement to purchase the Flamingo Hotel & Casino in Laughlin, Nevada and 7.7 acres of land in Atlantic City, New Jersey, formerly known as the Traymore site, from Harrah’s Entertainment for an aggregate purchase price of $170.0 million. American Casino & Entertainment intends to assign the rights to acquire the Flamingo to ACEP. The acquisition of the Flamingo is subject to the satisfaction of several conditions, including obtaining approval of Nevada gaming authorities and we cannot be certain that the condition will be satisfied. We anticipate that payment of the acquisition price will be made from a combination of ACEP’s available cash and borrowing under its senior secured revolving facility. This will reduce cash that otherwise would be available for other purposes and will require additional borrowing by ACEP. It may be some time before we recover our investment in the Flamingo, if we succeed in doing so at all.
      In addition, ACEP currently plans to spend approximately $40.0 million through 2008 to refurbish rooms, upgrade amenities and acquire new gaming equipment for the Flamingo. Acquisitions generally involve significant risks, including difficulties in the assimilation of the operations, services and corporate culture of the acquired company. We may not successfully manage and integrate the Flamingo’s operations with ours. The benefits from the acquisition of the Flamingo are based on projections and assumptions

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related to our program to upgrade and refurbish the facilities, as well as recent results. As a result, we cannot be certain that we will realize the anticipated benefits.
      We will acquire the Atlantic City property through American Casino & Entertainment’s direct subsidiary, AREP Boardwalk. We are seeking financing for the acquisition but cannot guarantee that financing will be available, or that it will be on favorable terms and we may be required to fund the purchase from available cash. The property is largely undeveloped and produces little income. During the development process we will incur substantial costs which will not be recouped unless and until the property becomes income-producing. Development is subject to a variety of governmental approvals, including NJCAA and New Jersey Commission approval should we elect to locate a casino on the site. We cannot be certain that the property will be developed successfully.
 	 	
 	The Sands has recently incurred operating losses which could result in our determining that, for financial reporting purposes, our investment has been impaired.	
      During 2005, The Sands incurred an operating loss relating to its operations. Although The Sands continues to generate positive cash flow, if The Sands continues to incur losses we may conclude that, for financial reporting purposes, the carrying value of The Sands’ fixed assets is impaired. If, as a result, we were to write-off all or a portion of The Sands’ fixed assets, it could adversely affect our results.
 	 	
 	Creditors of GB Holdings, Inc., or GBH, have indicated that they intend to challenge the transactions consummated in July 2004, which, among other things resulted in the transfer of The Sands to ACE Gaming, and intend to attempt to subordinate our claims against GBH to those of other creditors.	
      We own approximately 77.5% of GBH’s outstanding common stock. GBH’s principal asset is 41.7% of the common stock of Atlantic Coast. On September 29, 2005, GBH filed for protection under Chapter 11 of the U.S. Bankruptcy Code. As a result, we determined that we no longer control GBH under applicable accounting rules and have deconsolidated our investment for financial reporting purposes. Creditors of GBH have indicated that they intend to challenge the transactions in July 2004 that, among other things, resulted in the transfer of The Sands to ACE Gaming, the exchange certain of GBH’s notes for 3% senior secured convertible notes of Atlantic Coast, and, ultimately, our owning 58.3% of the Atlantic Coast shares. The creditors also have indicated that, if they succeed in challenging these transactions, they intend to seek to rescind the July 2004 transactions and attempt to equitably subordinate, in bankruptcy, AREP’s claims against GBH to the claims of such creditors. If such a suit is brought we intend to vigorously defend AREP and its subsidiaries against such claims, however we cannot predict the outcome of the litigation.
Real Estate Operations
 	 	
 	Our investment in property development may be more costly than anticipated.	
      We have invested and expect to continue to invest in unentitled land, undeveloped land and distressed development properties. These properties involve more risk than properties on which development has been completed. Unentitled land may not be approved for development. These investments do not generate any operating revenue, while costs are incurred to obtain government approvals and develop the properties. Construction may not be completed within budget or as scheduled and projected rental levels or sales prices may not be achieved and other unpredictable contingencies beyond our control could occur. We will not be able to recoup any of such costs until such time as these properties, or parcels thereof, are either disposed of or developed into income-producing assets.
 	 	
 	We may be subject to environmental liability as an owner or operator of development and rental real estate.	
      Under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may become liable for the costs of removal or remediation of certain hazardous substances, pollutants and contaminants released on, under, in or from its property. These laws often impose liability

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without regard to whether the owner or operator knew of, or was responsible for, the release of such substances. To the extent any such substances are found in or on any property invested in by us, we could be exposed to liability and be required to incur substantial remediation costs. The presence of such substances or the failure to undertake proper remediation may adversely affect the ability to finance, refinance or dispose of such property. We generally conduct a Phase I environmental site assessment on properties in which we are considering investing. A Phase I environmental site assessment involves record review, visual site assessment and personnel interviews, but does not typically include invasive testing procedures such as air, soil or groundwater sampling or other tests performed as part of a Phase II environmental site assessment. Accordingly, there can be no assurance that these assessments will disclose all potential liabilities or that future property uses or conditions or changes in applicable environmental laws and regulations or activities at nearby properties will not result in the creation of environmental liabilities with respect to a property.
Home Fashion
 	 	
 	A recent court order may result in our ownership of WPI being reduced to less than 50%. Uncertainties arising from this decision may adversely affect WPI’s operations and prospects and the value of our investment in it.	
      In November and December 2005, the U.S. District Court for the Southern District of New York rendered a decision in Contrarian Funds Inc. v. WestPoint Stevens, Inc. et al..  and issued orders reversing certain provisions of the bankruptcy court order pursuant to which we acquired our ownership of a majority of the common stock of a newly formed company, WPI. WPI acquired substantially all of the assets of West Point Stevens. On April 13, 2006, the Bankruptcy Court entered a remand order which provides, among other things, that all of the shares and rights to acquire shares of WPI issued to us and the other first lien lenders or held in escrow pursuant to court order constituted “replacement collateral”, other than 5,250,000 shares that we acquired for cash. The 5,250,000 shares represent approximately 27% of the 19,498,389 shares of WPI now outstanding. According to the remand order, we would share  pro rata  with the other first lien lenders in proceeds realized from the disposition of the replacement collateral and, to the extent there is remaining replacement collateral after satisfying first lien lender claims, we would share  pro rata  with the other second lien lenders in any further proceeds. We were holders of approximately 39.99% of the outstanding first lien debt and approximately 51.21% of the outstanding second lien debt. We intend to appeal the remand order along with the prior orders that modified and vacated portions of the sale order. The Bankruptcy Court entered an order staying the remand order pending its appeal.
      We currently own approximately 67.7% of the outstanding shares of common stock of WPI. As a result of the District Court’s order and the proceedings on remand, our percentage of the outstanding shares of common stock of WPI could be reduced to less than 50% and perhaps substantially less. If we were to lose control of WPI, it could adversely affect the business and prospects of WPI and the value of our investment in it. In addition, we consolidated the results and balance sheet of WPI as of December 31, 2005 and for the period from the date of acquisition through December 31, 2005. If we were to own less than 50% of the outstanding common stock and lose control of WPI, we would no longer consolidate it and our financial statements could be materially different than as presented as of December 31, 2005 and for the year then ended.
 	 	
 	WPI recently acquired its business from the former owners through bankruptcy proceedings. We cannot assure you that it will be able to operate profitably.	
      WPI acquired the assets of WestPoint Stevens as part of its bankruptcy proceedings. Certain of the issues that contributed to WestPoint Stevens’ filing for bankruptcy, such as intense industry competition, the inability to produce goods at a cost competitive with overseas suppliers, the increasing prevalence of direct sourcing by principal customers and continued incurrence of overhead costs associated with an enterprise larger than the current business can profitably support, continue to exist and may continue to affect WPI’s business operations and financial condition adversely. In addition, during the protracted

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bankruptcy proceedings of WestPoint Stevens, several of its customers reduced the volume of business done with WestPoint Stevens. We have installed new management to address these issues, but we cannot assure you that new management will be effective. In the first quarter of 2006, the Home Fashion segment experienced increased losses and negative cash flow from operations. We expect that WPI will continue to operate at a loss during 2006 and 2007, and we cannot assure you that losses will not continue to increase or that WPI will be able to operate profitably in the future.

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 	WPI may not be able to secure additional financing to meet its future needs.	
      Other than the credit facility provided by AREH which matures on August 7, 2006, WPI has not yet obtained any additional credit facilities and we cannot assure you that it will be able to do so on terms that are acceptable to it. Moreover, the pending litigation relating to the ownership of WPI has hindered the consummation of the rights offering pursuant to which WPI was to raise $92 million in incremental equity and there can be no assurance as to when or if such offering will occur and whether AREP will remain obligated to purchase any additional shares pursuant thereto. In addition, we have not yet ascertained the full extent to which additional capital will be required to retain WPI’s customers and make investments required to attain a competitive cost structure. As a result, we cannot assure you that WPI will be able to obtain the capital that will be required to continue operations or to repay amounts due under the AREH credit facility.
      From time to time, WPI may explore additional financing methods and other means to make needed investments. Such financing methods could include stock issuance or debt financing. If WPI’s business does not improve, it is likely that this financing would be available, if at all, only on terms that are not advantageous and potentially highly dilutive to existing stockholders of WPI.
 	 	
 	The loss of any of WPI’s large customers could have an adverse effect on WPI’s business.	
      During 2005 and 2004, WPI’s six largest customers accounted for approximately 51% of its net sales (including net sales by WestPoint Stevens). WPI has experienced a significant decline in net sales to one of its largest customers. Sales to this customer have declined from $202.4 million for 2004 to $51.5 million for 2005 (including net sales by WestPoint Stevens). In addition, many other retailers have indicated that they intend to significantly increase their direct sourcing of home fashion products from foreign sources. The loss of any of WPI’s largest accounts, or a material portion of sales to those accounts, would have an adverse effect upon its business, which could be material.
 	 	
 	A portion of WPI’s sales are derived from licensed designer brands. The loss of a significant license could have an adverse effect on WPI’s business.	
      A portion of WPI’s sales is derived from licensed designer brands. The license agreements for WPI’s designer brands generally are for a term of two or three years. Some of the licenses are automatically renewable for additional periods, provided that sales thresholds set forth in the license agreements are met. The loss of a significant license could have an adverse effect upon WPI’s business, which effect could be material. Under certain circumstances, these licenses can be terminated without WPI’s consent due to circumstances beyond WPI’s control.
 	 	
 	A shortage of the principal raw materials WPI uses to manufacture its products could force WPI to pay more for those materials and, possibly, cause WPI to increase its prices, which could have an adverse effect on WPI’s operations.	
      Any shortage in the raw materials WPI uses to manufacture its products could adversely affect its operations. The principal raw materials that WPI uses in the manufacture of its products are cotton of various grades and staple lengths and polyester and nylon in staple and filament form. Since cotton is an agricultural product, its supply and quality are subject to weather patterns, disease and other factors. The price of cotton is also influenced by supply and demand considerations, both domestically and worldwide, and by the cost of polyester. Although WPI has been able to acquire sufficient quantities of cotton for its operations in the past, any shortage in the cotton supply by reason of weather patterns, disease or other factors, or a significant increase in the price of cotton, could adversely affect its operations. The price of man-made fibers, such as polyester and nylon, is influenced by demand, manufacturing capacity and costs, petroleum prices, cotton prices and the cost of polymers used in producing these fibers. In particular, the effect of increased energy prices may have a direct impact upon the cost of dye and chemicals, polyester and other synthetic fibers. Any significant prolonged petrochemical shortages could significantly affect the availability of man-made fibers and could cause a substantial increase in demand for cotton. This could

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result in decreased availability of cotton and possibly increased prices and could adversely affect WPI’s operations.
 	 	
 	The home fashion industry is highly competitive and WPI’s success depends on WPI’s ability to compete effectively in the market.	
      The home fashion industry is highly competitive. WPI’s future success will, to a large extent, depend on its ability to remain a low-cost producer and to remain competitive. WPI competes with both foreign and domestic companies on, among other factors, the basis of price, quality and customer service. In the home fashion market, WPI competes with many companies, the largest of which is Springs Global US, Inc., a company formed by the merger of Coteminas S.A., a major Brazilian textile producer, with Springs Industries, Inc. WPI’s future success depends on its ability to remain competitive in the areas of marketing, product development, price, quality, brand names, manufacturing capabilities, distribution and order processing. We cannot assure you of WPI’s ability to compete effectively in any of these areas. Any failure to compete effectively could adversely affect WPI’s sales and, accordingly, its operations. Additionally, the easing of trade restrictions over time has led to growing competition from low priced products imported from Asia and Latin America. The lifting of import quotas in 2005 has accelerated the loss of WPI’s market share. There can be no assurance that the foreign competition will not grow to a level that could have an adverse effect upon WPI ’s ability to compete effectively.
 	 	
 	WPI intends to increase the percentage of its products that are made overseas. There is no assurance that WPI will be successful in obtaining goods of sufficient quality on a timely basis and on advantageous terms. WPI will be subject to additional risks relating to doing business overseas.	
      WPI intends to increase the percentage of its products that are made overseas and may face additional risks associated with these efforts. Adverse factors that WPI may encounter include:
 	 	 	
 	• 	challenges caused by distance;	
 	 	 	
 	• 	language and cultural differences;	
 	 	 	
 	• 	legal and regulatory restrictions;	
 	 	 	
 	• 	the difficulty of enforcing agreements with overseas suppliers;	
 	 	 	
 	• 	currency exchange rate fluctuations;	
 	 	 	
 	• 	political and economic instability;	
 	 	 	
 	• 	potential adverse tax consequences; and	
 	 	 	
 	• 	higher costs associated with doing business internationally.	

 	There has been consolidation of retailers of WPI’s products that may reduce its profitability.	
      Retailers of consumer goods have become fewer and more powerful over time. As buying power has become more concentrated, pricing pressure on vendors has grown. With the ability to buy imported products directly from foreign sources, retailers’ pricing leverage has increased and also allowed for growth in private label brands that displace and compete with WPI proprietary brands. Retailers’ pricing leverage has resulted in a decline in WPI’s unit pricing and margins and resulted in a shift in product mix to more private label programs. If WPI is unable to diminish the decline in its pricing and margins, it may not be able to achieve or maintain profitability.
 	 	
 	WPI is subject to various federal, state and local environmental and health and safety laws and regulations. If it does not comply with these regulations, it may incur significant costs in the future to become compliant.	
      WPI is subject to various federal, state and local laws and regulations governing, among other things, the discharge, storage, handling, usage and disposal of a variety of hazardous and non-hazardous

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substances and wastes used in, or resulting from, its operations, including potential remediation obligations under those laws and regulations. WPI’s operations are also governed by federal, state and local laws and regulations relating to employee safety and health which, among other things, establish exposure limitations for cotton dust, formaldehyde, asbestos and noise, and which regulate chemical, physical and ergonomic hazards in the workplace. Consumer product safety laws, regulations and standards at the federal and state level govern the manufacture and sale of products by WPI. Although WPI does not expect that compliance with any of these laws and regulations will adversely affect its operations, we cannot assure you that regulatory requirements will not become more stringent in the future or that WPI will not incur significant costs to comply with those requirements.
Investments
 	 	
 	We may not be able to identify suitable investments, and our investments may not result in favorable returns or may result in losses.	
      Our partnership agreement allows us to take advantage of investment opportunities we believe exist outside of our operating businesses. The equity securities in which we may invest may include common stocks, preferred stocks and securities convertible into common stocks, as well as warrants to purchase these securities. The debt securities in which we may invest may include bonds, debentures, notes, or non-rated mortgage-related securities, municipal obligations, bank debt and mezzanine loans. Certain of these securities may include lower rated or non-rated securities which may provide the potential for higher yields and therefore may entail higher risk and may include the securities of bankrupt or distressed companies. In addition, we may engage in various investment techniques, including derivatives, options and futures transactions, foreign currency transactions, “short” sales and leveraging for either hedging or other purposes. We may concentrate our activities by owning a significant or controlling interest in certain investments. We may not be successful in finding suitable opportunities to invest our cash and our strategy of investing in undervalued assets may expose us to numerous risks.
 	 	
 	Our investments may be subject to significant uncertainties.	
      Our investments may not be successful for many reasons including, but not limited to:
 	 	 	
 	• 	fluctuation of interest rates;	
 	 	 	
 	• 	lack of control in minority investments;	
 	 	 	
 	• 	worsening of general economic and market conditions;	
 	 	 	
 	• 	lack of diversification;	
 	 	 	
 	• 	fluctuation of U.S. dollar exchange rates; and	
 	 	 	
 	• 	adverse legal and regulatory developments that may affect particular businesses.	
      We have invested in securities, including “long” and “short” positions which, in some cases, have resulted and in the future could result in significant realized and unrealized losses.
USE OF PROCEEDS
      Except as described in any prospectus supplement, the net proceeds from the sale of the securities will be added to our general funds and used for general business purposes, including, among other things, additions to working capital, financing of capital expenditures and acquisitions. We continually identify, evaluate and discuss with others acquisition opportunities. We continually evaluate potential acquisition candidates and intend to continue to pursue transactions. However, we have not reached any agreements, commitments or understandings for any future acquisitions other than those arrangements, if any, as described in documents incorporated by reference or in prospectus supplements.

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      When we offer a particular series of securities, the prospectus supplement relating to that offering will describe the intended use of the net proceeds received from that offering. We will retain broad discretion in the use of the net proceeds.
DESCRIPTION OF DEPOSITARY UNITS
      The following description of our depositary units does not purport to be complete and is qualified in its entirety by reference to applicable Delaware law, and to provisions of our partnership agreement, as amended, and the depositary agreement, as amended, related to the depositary agreement, or the depositary agreement entered into among us, the Registrar and Transfer Company, as depositary, or the depositary, and the unitholders.
General
      The depositary units represent limited partner interests in AREP. The percentage interest in AREP represented by a depositary unit is equal to the ratio it bears at the time of such determination to the total number of depositary units in AREP (including any undeposited depositary units) outstanding, multiplied by 99%, which is the aggregate percentage interest in AREP of all holders of depositary units. Subject to the rights and preferences of preferred units, each depositary unit evidences entitlement to a portion of AREP’s distributions and an allocation of AREP’s net income and net loss, as determined in accordance with our partnership agreement. We are authorized to issue additional depositary units or other securities from time to time to unitholders or additional investors without the consent or approval of holders of depositary units, or unitholders. There is no limit to the number of depositary units or additional classes of units, including preferred units, that may be issued. The board of directors of our general partner has the power, without any further action by the unitholders, to issue units with such designations, preferences and relative, participating or other special rights, powers and duties, including rights, powers and duties senior to existing classes of depositary units or preferred units. The depositary units have no preemptive rights.
Transfer of Depositary Units
      Until a depositary unit has been transferred on the books of the depositary, we and the depositary will treat the record holder of the unit as the absolute owner for all purposes. A transfer of depositary units will not be recognized by the depositary or us unless and until the transferee of the depositary units, or a subsequent transferee, executes and delivers a transfer application to the depositary. Transfer applications appear on the back of each depositary receipt and also will be furnished at no charge by the depositary upon receipt of a request for it. By executing and delivering a transfer application to the depositary, a subsequent transferee automatically requests admission as a substituted unitholder in the partnership, agrees to be bound by the terms and conditions of our partnership agreement and grants a power of attorney to our general partner.
      On a monthly basis, the depositary will, on behalf of subsequent transferees who have submitted transfer applications, request the general partner to admit such subsequent transferees as substituted limited partners of AREP. If our general partner consents to such substitution, a subsequent transferee will be admitted to the partnership as a substituted limited partner upon the recordation of such subsequent transferee’s name in our books and records. Upon admission, which is in the sole discretion of our general partner, he will be entitled to all of the rights of a limited partner under the Delaware Revised Uniform Limited Partnership Act, or the Delaware Act, and pursuant to our partnership agreement.
      A subsequent transferee will, after submitting a transfer application to the depositary but before being admitted to AREP as a substituted unitholder of record, have the rights of an assignee under the Delaware Act and our partnership agreement, including the right to receive its pro rata share of distributions. A subsequent transferee who does not execute and deliver a transfer application to the depositary will not be recognized as the record holder of depositary units and will only have the right to transfer or assign its depositary units to a purchaser or other transferee. Therefore, such subsequent transferee will neither receive distributions from the partnership nor be entitled to vote on partnership matters or any other rights

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to which record holders of depositary units are entitled under the Delaware Act or pursuant to our partnership agreement. Distributions made in respect of the depositary units held by such subsequent transferees will continue to be paid to the transferor of such depositary units.
      A subsequent transferee will be deemed to be a party to the depositary agreement and to be bound by its terms and conditions whether or not such subsequent transferee executes and delivers a transfer application to the depositary. A transferor will have no duty to ensure the execution of a transfer application by a subsequent transferee and will have no liability or responsibility if such subsequent transferee neglects or chooses not to execute and deliver the transfer application to the depositary. Whenever depositary units are transferred, the transfer application requires that a subsequent transferee answer a series of questions. The required information is designed to provide us with the information necessary to prepare our tax information return.
Withdrawal of Depositary Units from Deposit
      A unitholder may withdraw from the depositary the depositary units represented by its depositary receipts upon written request and surrender of the depositary receipts evidencing the depositary units in exchange for a certificate issued by us evidencing the same number of depositary units. A subsequent transferee is required to become a unitholder of record before being entitled to withdraw depositary units from the depositary. Depositary units which have been withdrawn from the depositary, and therefore are not evidenced by depositary receipts, are not transferable except upon death, by operation of law, by transfer to us or redeposit with the depositary. A holder of depositary units withdrawn from deposit will continue to receive its respective share of distributions and allocations of net income and losses pursuant to our partnership agreement. In order to transfer depositary units withdrawn from the depositary other than upon death, by operation of law or to the partnership, a unitholder must redeposit the certificate evidencing such withdrawn depositary units with the depositary and request issuance of depositary receipts representing such depositary units, which depositary receipts then may be transferred. Any redeposit of such withdrawn depositary units with the depositary requires 60 days’ advance written notice and payment to the depositary of a redeposit fee initially $5.00 per 100 depositary units or portion thereof, and will be subject to the satisfaction of certain other procedural requirements under the depositary agreement.
Replacement of Lost Depositary Receipts and Certificates
      A unitholder or subsequent transferee who loses or has its certificate for depositary units or depositary receipts stolen or destroyed may obtain a replacement certificate or depositary receipt by furnishing an indemnity bond and by satisfying certain other procedural requirements under the depositary agreement.
Amendment of Depositary Agreement
      Subject to the restrictions described below, any provision of the depositary agreement, including the form of depositary receipt, may, at any time and from time to time, be amended by the mutual agreement of us and the depositary in any respect deemed necessary or appropriate by them, without the approval of the holders of depositary units. No amendment to the depositary agreement, however, may impair the right of a holder of depositary units to surrender a depositary receipt and to withdraw any or all of the deposited depositary units evidenced by a depositary receipt or to redeposit depositary units pursuant to the depositary agreement and receive a depositary receipt evidencing redeposited depositary units.
      The depositary will furnish notice to each record holder of a depositary unit, and to each securities exchange on which depositary units are listed for trading, of any material amendment made to the depositary agreement. Each record holder of a depositary unit at the time any amendment of the depositary agreement becomes effective will be deemed, by continuing to hold the depositary unit, to consent and agree to the amendment and to be bound by the depositary agreement, as so amended.

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      The depositary will give notice of the imposition of any fee or charge, other than fees and charges provided for in the depositary agreement, or change to the fees and charges, upon record holders of depositary units to any securities exchange on which the depositary units are listed for trading and to all record holders of depositary units. The imposition of any fee or charge, or change to them, will not be effective until the expiration of 30 days after the date of such notice, unless it becomes effective in the form of an amendment to the depositary agreement effected by us and the depositary.
Termination of Depositary Agreement
      We may not terminate the depositary agreement unless the termination (1) is in connection with us entering into a similar agreement with a new depositary selected by the general partner, (2) is as a result of our receipt of an opinion of counsel to the effect that the termination is necessary for us to avoid being treated as an “association” taxable as a corporation for federal income tax purposes or to avoid being in violation of any applicable federal or state securities laws or (3) is in connection with our dissolution.
      The depositary will terminate the depositary agreement, when directed to do so by us, by mailing notice of termination to the record holders of depositary units then outstanding at least 60 days before the date fixed for the termination in such notice. Termination will be effective on the date fixed in such notice, which date must be at least 60 days after it is mailed. Upon termination of the depositary agreement, the depositary will discontinue the transfer of depositary units, suspend the distribution of reports, notices and disbursements and cease to perform any other acts under the depositary agreement, except in the event the depositary agreement is not being terminated in connection with us entering into a similar agreement with a new depositary, the depositary will assist in the facilitation of the withdrawal of depositary units by holders who desire to surrender their depositary receipts.
Resignation or Removal of Depositary
      The depositary may resign as depositary and may be removed by us at any time upon 60 days’ written notice. The resignation or removal of the depositary becomes effective upon the appointment of a successor depositary by us and written acceptance by the successor depositary of its appointment. In the event a successor depositary is not appointed within 75 days of notification of such resignation or removal, the general partner will act as depositary until a successor depositary is appointed. Any corporation into or with which the depositary may be merged or consolidated will be the successor depositary without the execution or filing of any document or any further act.
DESCRIPTION OF PREFERRED UNITS
      We are authorized to issue preferred units having rights senior to our depository units and to our currently outstanding cumulative pay-in-kind preferred units. The board of directors of our general partner is authorized to establish the powers, rights, preferences, privileges and designations of one or more class of preferred units without further approval, including:
 	 	 	
 	• 	distribution rights;	
 	 	 	
 	• 	conversion rights;	
 	 	 	
 	• 	voting rights;	
 	 	 	
 	• 	redemption rights and terms of redemption; and	
 	 	 	
 	• 	liquidation preferences.	
      The rights, preferences, privileges and restrictions of the preferred units of each class will be fixed by a certificate of amendment to the partnership agreement relating to each class. The prospectus supplement relating to each class will specify the terms of the preferred units, including:
 	 	 	
 	• 	the maximum number of units in the class and the distinctive designation;	
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 	• 	the rights to share in partnership distributions;	
 	 	 	
 	• 	the terms on which the units may be redeemed, if at all;	
 	 	 	
 	• 	the rights of the class upon dissolution and liquidation of the partnership;	
 	 	 	
 	• 	the terms of any retirement or sinking fund for the purchase or redemption of the units of the class;	
 	 	 	
 	• 	the terms and conditions, if any, on which the units of the class will be convertible into, or exchangeable for, units of any other class or classes of securities;	
 	 	 	
 	• 	the voting rights, if any, on the units of the class; and	
 	 	 	
 	• 	any or all other preferences and relative, participating, operational or other special rights or qualifications, limitations or restrictions of the units.	
      We will describe the specific terms of a particular class of preferred units in the prospectus supplement relating to that class. The description of preferred units above and the description of the terms of a particular series of preferred units in the prospectus supplement are not complete. You should refer to the applicable certificate of amendment to our partnership agreement for complete information. The prospectus supplement will contain a description of U.S. federal income tax consequences relating to the particular series of preferred units.
OUR PARTNERSHIP AGREEMENT AND CERTAIN
PROVISIONS OF DELAWARE LAW
      The rights of a limited partner of the partnership are set forth in our partnership agreement. The following is a summary of certain provisions of our partnership agreement and the agreement of limited partnership of AREH, or the AREH partnership agreement, which is similar to our partnership agreement in all material respects (except for the preferred units). The following summary discusses certain provisions which relate to both, and is qualified in its entirety by reference to both our partnership agreement and the AREH partnership agreement. A reference to the “partnership agreement” in this prospectus refers to both of our partnership agreement and the AREH partnership agreement, unless otherwise indicated.
Removal of the General Partner
      Subject to certain limitations on the exercise by unitholders of voting rights, the general partner may be removed by the written consent or affirmative vote of holders of depositary units owning more than 75% of the total number of all outstanding depositary units, voting as a class, then held by unitholders, including the general partner and its affiliates to the extent that they are holders of depositary units. Upon the removal of the general partner by holders of depositary units, the holders of depositary units will be obligated to elect a successor general partner and to continue the business of the partnership. At the election of the general partner, a successor general partner will be required, at the effective date of its admission as a general partner, to purchase API’s 1% general partner interest directly from API for a price equal to its “fair market value,” as described below.
      If API does not elect to sell its interest, the successor general partner will be required to contribute to the capital of AREP cash in an amount equal to 1 / 99 th of the product of the number of depositary units outstanding immediately prior to the effective date of such successor general partner’s admission (but after giving effect to the conversion of API’s general partner interest into depositary units described below) and the average price at which the depositary units had been trading over the 20-day period immediately preceding the successor general partner’s admission. Thereafter, the successor general partner will be entitled to one percent (1%) of all partnership allocations and distributions.
      If API chooses not to sell its 1% general partner interest directly to a successor general partner, API’s general partner interest in AREP will be converted into depositary units, with the number of depositary units to be received to be based upon the “fair market value” of its general partner interest at the time of

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its removal and the average price at which the depositary units had been trading over the 20-day period preceding the effective date of API’s departure. In this regard, the “fair market value” of the departing general partner’s interest is the amount that would be distributable to API on account of the interest if AREP were to dispose of all of its assets in an orderly liquidation, commencing on the effective date of its removal at a price equal to the fair market value of those assets (discounted at the rate then payable on one-year U.S. Treasury obligations to the effective date of such removal to reflect the time reasonably anticipated to be necessary to consummate the sales), as agreed upon between API as the departing general partner and its successor, or, in the absence of an agreement, as determined by an independent appraiser.
      Upon removal of API from the partnership, API also will be removed as general partner of AREH and its general partner interest in AREH will either be purchased by the successor general partner or converted into depositary units (in which case the successor shall also contribute to the capital of AREH) in the same manner as provided above with respect to the partnership.
      The partnership agreement provides that, upon the departure of API and the conversion of its general partner interest in AREP to depositary units, AREP will, at the request of the departing general partner, file with the Securities and Exchange Commission up to three registration statements under the Securities Act registering the offering and sale of all or a portion of the depositary units owned by API, including those depositary units received upon conversion of its general partner interest in AREP and AREH. The cost of the first registrations will be borne by AREP and the cost of any other such registration will be borne by API.
Withdrawal of the General Partner
      The general partner may withdraw, but only if:
 	 	
 	      (1) the withdrawal is with the consent of a majority interest;	
 	 	
 	      (2) API, with the consent of a majority interest, transfers all of its interest as general partner in the partnership;	
 	 	
 	      (3) the transferee consents to be bound by the partnership agreement and the transferee has the necessary legal authority to act as successor general partner of the partnership; and	
 	 	
 	      (4) AREP receives an opinion of counsel to the effect that a vote by the unitholders and the admission of a new general partner is in conformity with local law, will not cause the loss of limited liability to the unitholders and will not cause AREP to be treated as an “association” taxable as a corporation for federal income tax purposes.	
      Notwithstanding the foregoing, API may, without the consent of the unitholders (to the extent permitted by law), transfer its interest as general partner in AREP to any person or entity that has, by merger, consolidation or otherwise, acquired all or substantially all of the assets or stock of API and continued its business, provided that such person or entity has a net worth no less than that of API and has accepted and agreed to be bound by the terms and conditions of the partnership agreement. The general partner also may mortgage, pledge, hypothecate or grant a security interest in its interest as general partner in AREP without the consent of unitholders.
Distributions
      The general partner has the power and authority to retain or use partnership assets or revenues as, in the sole and absolute discretion of the general partner, may be required to satisfy the anticipated present and future cash needs of the partnership, whether for operations, expansion, improvements, acquisitions or otherwise.
      Subject to Section 17-607 of the Delaware Act and to the provision with respect to distributions upon liquidation or dissolution of the partnership, the general partner, in its sole and absolute discretion, may make such distribution from partnership assets or otherwise as it deems appropriate in its sole discretion,

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quarterly, annually or at any other time. Any distributions will be distributed to the general partner and the record holders in accordance with their respective percentage interests.
      Distribution of proceeds on liquidation or dissolution of the partnership will be made; first to the payment of any debts and liabilities of the partnership which are then due and payable; next to the establishment of such reserves as the general partner deems reasonably necessary to provide for any future, contingent or unforeseen liabilities or obligations of the partnership; and next pro rata in accordance with and to the extent of the positive balances in the general partner’s and record holders’ respective capital accounts.
Allocations of Income and Loss
      The AREP partnership agreement provides, in general, that, after allocation to the holders of preferred units of an amount of income or gain equal to the 5% accrued distribution rate for the year, all items of income, gain, loss and deduction are allocated to API and to the holders of depositary units in accordance with their respective percentage ownership in the partnership. Items allocated to the holders of depositary units are further allocated among them pro rata in accordance with the respective number of depositary units owned by each of them. The partnership’s income gain, and loss and deduction, for federal income tax purposes, will be computed on an annual basis and apportioned equally among the calendar months among the general partner and record holders of depositary units in accordance with their percentage interests as of the close of business on the last day of the month in which taxable income or losses are apportioned. The partnership’s gains and losses from capital transactions generally will be allocated among the general partner and record holders of depositary units in proportion to their percentage interests as of the close of business on the last day of the month in which such gains and losses occurred. However, if gain from a capital transaction is recognized by the partnership over more than one calendar year, gain recognized by the partnership in years subsequent to the year in which the capital transaction occurred shall be allocated in the same manner as income of the partnership allocated.
Nevada Gaming Law Dispositions
      If any Nevada gaming authority requires that a limited partner be licensed, qualified or found suitable under any applicable Nevada gaming law and the limited partner

 	• 	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 Nevada gaming authority after being requested to do so by the Nevada gaming authority, or	

 	 	 	
 	• 	is denied such license or qualification or not found suitable,	
 	 	 	
then, the general partner will have the right, exercisable in its sole and absolute discretion,

 	• 	to require each the limited partner to dispose of its partnership interest within 30 days, or such earlier date as may be required by the applicable Nevada gaming authority, of the occurrence of the event described above, or	

 	• 	to redeem the partnership interest of the limited partner, on behalf of and for the account of the partnership, at a redemption price equal to lowest of:	

 	 	 	
 	• 	the market price for the partnership interest on the filing date, as defined, which, in the case of a depositary unit, will be the unit price;	

 	• 	the price at which such limited partner acquired the partnership interest; and	
 	 	 	
 	• 	such other lesser amount as may be required by any Nevada gaming authority.	
      Immediately upon a determination by a Nevada gaming authority that a limited partner will not be licensed, qualified or found suitable and must dispose of its partnership interest, the limited partner will, to the extent required by applicable Nevada gaming laws, have no further right to exercise, directly or indirectly, any rights to which limited partners or record holders are entitled under the Delaware Act or

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partnership agreement or to receive any distributions made by the partnership, except the redemption price.
New Jersey Gaming Law Dispositions
      Securities of the partnership are held subject to the condition that if a holder of any security is found to be disqualified by the New Jersey Casino Control Commission pursuant to the provisions of the New Jersey Casino Control Act, the holder will dispose of his interest in the partnership in accordance with the New Jersey Casino Control Act. The partnership agreement is deemed to include all provisions required by the Casino Control Act and the regulations under it.
Amendment of the Partnership Agreement
      Amendments to the partnership agreement may be proposed by the general partner or by holders of depositary units owning at least 10% of the total number of depositary units outstanding then owned by all unitholders. Any proposed amendment (other than those described below) must be approved by the general partner in writing and, subject to limitations on the exercise by unitholders of voting rights, by at least a majority interest in order to be adopted. Unless approved by API in writing and, subject to limitations on the exercise by unitholders of voting rights, by all of the holders of depositary units, no amendment may be made to the partnership agreement if the amendment, in the opinion of counsel would result in the loss of the limited liability of unitholders or AREP as the sole limited partner of AREH or would cause AREP or AREH to be treated as an association taxable as a corporation for federal income tax purposes. In addition, no amendment to the partnership agreement may be made which would:
 	 	 	
 	• 	enlarge the obligations of the general partner or any unitholder or convert the interest of any unitholder into the interest of a general partner;	
 	 	 	
 	• 	modify the expense reimbursement payable to the general partner and its affiliates pursuant to the partnership agreement or the fees and compensation payable to the general partner and its affiliates pursuant to the AREH partnership agreement;	
 	 	 	
 	• 	modify the order and method for allocations of net income and net loss or distributions of net cash flow from operations without the consent of the general partner or the unitholders adversely affected; or	
 	 	 	
 	• 	amend sections of the partnership agreement concerning amendments of the agreement without the consent of unitholders owning more than 95% of the total number of depositary units outstanding then held by all unitholders.	
Notwithstanding the foregoing, the general partner may make amendments to the partnership agreement without the consent of the unitholders, if such amendments are necessary or appropriate:
 	 	 	
 	• 	to reflect a change in the name or location of the principal office of the partnership;	
 	 	 	
 	• 	to reflect the admission, substitution, termination, or withdrawal of unitholders in accordance with the partnership agreement;	
 	 	 	
 	• 	to qualify AREP as a limited partnership or to ensure that AREP will not be treated as an association taxable as a corporation for federal income tax purposes;	
 	 	 	
 	• 	in connection with or as a result of the general partner’s determination that AREP does not or no longer will qualify as a partnership for federal income tax purposes, including, without limitation, an amendment reflecting the reorganization of AREP into a qualified “real estate investment trust”;	
 	 	 	
 	• 	to reflect a change that is of an inconsequential nature and does not adversely affect the unitholders in any material respect, or to cure any ambiguity, correct or supplement any provision in the partnership agreement not inconsistent with law or with other provisions, or make other changes with respect to matters arising under the partnership agreement that will not be inconsistent with law or with the provisions of the partnership agreement;	
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 	• 	to satisfy any requirements, conditions, or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state law;	
 	 	 	
 	• 	to facilitate the trading of the depositary units or comply with any requirement or guideline of any securities exchange on which the depositary units are or will be listed for trading;	
 	 	 	
 	• 	to make any change required or contemplated by the partnership agreement;	
 	 	 	
 	• 	to amend any provisions requiring any action by the general partner if applicable provisions of the Delaware Act related to AREP or AREH are amended or changed so that such action is no longer necessary; or	
 	 	 	
 	• 	to authorize AREP to issue units (or other securities) in one or more additional classes, or one or more series of classes, with any designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to existing classes of depositary units or preferred units, as shall be fixed by the general partner.	
Issuance of Additional Securities
      The partnership is authorized to issue additional depositary units or other securities from time to time to unitholders or additional investors without the consent or approval of unitholders. There is no limit to the number of depositary units or additional classes that may be issued. The board of directors of the general partner has the power, without any further action by the unitholders, to issue securities with such designations, preferences and relative, participating or other special rights, powers and duties, including rights, powers and duties senior to existing classes of depositary units or preferred units.
Meetings; Voting Rights of Unitholders
      Any action that is required or permitted to be taken by unitholders may be taken either at a meeting of the holders of depositary units or without a meeting if consents in writing setting forth the action so taken are signed by holders of depositary units owning not less than the minimum number of depositary units or preferred units that would be necessary to authorize or take such action at a meeting. Meetings of the holders of depositary units may be called by the general partner or by unitholders owning at least 10% of the total depositary units outstanding then owned by all such unitholders. Holders of depositary units may vote either in person or by proxy at meetings.
      Matters submitted to the unitholders for their consent will be determined by the affirmative vote, in person or by proxy, of a majority interest, except that a higher vote will be required for certain amendments described above, the removal of the general partner and the continuation of AREP after certain events that would otherwise cause dissolution.
      Each unitholder will have one vote for each depositary unit as to which the unitholder has been admitted as a unitholder. A subsequent transferee of depositary units who has not been admitted as a unitholder of record with respect to the depositary units will have no voting rights with respect to the depositary units, even if such subsequent transferee holds other depositary units as to which it has been admitted as a unitholder. The voting rights of a unitholder who transfers a depositary unit will terminate with respect to that depositary unit upon its transfer, whether or not the subsequent transferee is admitted as a unitholder of record with respect thereto. The partnership agreement does not provide for annual meetings of the unitholders.
Restriction on Short-Form Mergers
      Neither the general partner nor its affiliates will cause the partnership (in the event that the Delaware Act is amended to permit partnerships to engage in short form merger transactions), or any successor entity of the partnership, whether in its current form as a limited partnership or as converted to or succeeded by a corporation or other form of business association, to effect a merger or other business combination (in the event that such short-form merger statute applies to other business combinations) of

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the partnership or such successor, in each case pursuant to Section 253 of the General Corporation Law of Delaware, or any successor statute, or any similar short-form merger statute under the laws of Delaware or any other jurisdiction. This provision does not apply to any other merger or business combination transaction. In addition, no amendment to this provision is permitted without a unanimous vote of the record holders, unless the amendment has been approved by the audit committee, in which event only a majority interest, as defined, is required for approval of the amendment.
Liability of General Partner and Unitholders
      The general partner will be liable for all general obligations of the partnership to the extent not paid by the partnership. The general partner will not, however, be liable for the nonrecourse obligations of the partnership. Assuming that a unitholder does not take part in the control of the business of AREP and otherwise acts in conformity with the provisions of the partnership agreement, the liability of the unitholder will, under the Delaware Act, be limited, subject to certain possible exceptions, generally to the amount contributed by the unitholder or the unitholder’s predecessor in interest to the capital of the partnership, plus the unitholder’s share of any undistributed partnership income, profits or property. However, under the Delaware Act, a unitholder who receives a distribution from AREP that is made in violation of the Delaware Act and who knew at the time of the distribution that the distribution was improper, is liable to AREP for the amount of the distribution. Such liability or liability under other applicable Delaware law (such as the law of fraudulent conveyances) ceases after expiration of three years from the date of the applicable distribution.
      Under the Delaware Act, a partnership is prohibited from making a distribution to a partner to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified property of the partnership, exceed the fair value of the assets of the partnership (except that fair value of property that is subject to a liability for which the recourse of creditors is limited is included in the assets of the partnership only to the extent that the fair value of the property exceeds that liability). An assignee of a limited partner who becomes a substituted limited partner does not, under the Delaware Act, become liable for any obligation of the assignor to restore prior distributions.
Books and Reports
      The general partner is required to keep complete and accurate books with respect to the partnership’s business at the principal office of the partnership. The books are maintained for financial accounting purposes on the accrual basis, in accordance with generally accepted accounting principles. The fiscal year of AREP is the calendar year.
      Unitholders will be entitled to have access to AREP books and certain other records at reasonable times upon reasonable notice to the general partner, subject to certain limitations including those intended to protect confidential business information.
      The general partner will furnish to each unitholder, within 120 days after the close of each fiscal year, reports containing certain financial statements of AREP for the fiscal year, including a balance sheet and statements of income, unitholders’ equity and changes in financial position, which will be audited by a nationally recognized firm of independent certified public accountants. Within 90 days after the close of each taxable year, AREP will use its best efforts to furnish to each unitholder as of the last day of any month during such taxable year such information as may be required by the unitholders for the preparation of their individual federal, state and local tax returns. This information will be furnished in summary form so that certain complex calculations normally required can be avoided. The partnership’s ability to furnish such summary information may depend on the cooperation of unitholders in supplying certain information to the partnership.

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Power of Attorney
      Pursuant to the AREP partnership agreement, each unitholder of record appoints API and each of API’s authorized officers as the unitholder’s or substituted unitholder’s attorney-in-fact:
 	 	 	
 	• 	to enter into the depositary agreement and deposit the depositary units of the unitholder or substituted unitholder in the deposit account established by the depositary and admit the holders of depositary units and preferred units as limited partners in AREP, and	
 	 	 	
 	• 	to make, execute, file and/or record:	

 	• 	instruments with respect to any amendment of the partnership agreement;	
 	 	 	
 	• 	conveyances and other instruments and documents with respect to the dissolution, termination and liquidation of AREP pursuant to the terms of the partnership agreement;	
 	 	 	
 	• 	financing statements or other documents necessary to grant or perfect a security interest, mortgage, pledge or lien on all or any of the assets of the partnership;	
 	 	 	
 	• 	instruments or papers required to continue the business of AREP pursuant to the partnership agreement;	
 	 	 	
 	• 	instruments relating to the admission of substituted limited partners in the partnership; and	
 	 	 	
 	• 	all other instruments deemed necessary or appropriate to carry out the provisions of the partnership agreement. The power of attorney is irrevocable, will survive the subsequent death, incompetency, dissolution, disability, incapacity, bankruptcy or termination of the granting unitholder, and will extend to such unitholder’s heirs, successors and assigns.	
Death, Bankruptcy or Incompetency of a Unitholder
      The death, bankruptcy or adjudication of incompetency of a unitholder will not dissolve the partnership. In such event, the legal representatives of the unitholder will have all the rights of a unitholder for the purpose of settling or managing the estate and such power as the deceased, bankruptcy or incompetent unitholder possessed to assess, sell or transfer any part of his interest. The transfer of depositary units and preferred units by the legal representative to any person or entity is subject to all of the restrictions to which such transfer would have been subject if it had been made by the deceased, bankrupt or incompetent unitholder.
Termination, Dissolution and Liquidation
      The partnership will continue until December 31, 2085, unless sooner dissolved or terminated and its assets liquidated upon the occurrence of the earliest of:
 	 	 	
 	• 	the withdrawal, removal or bankruptcy of the general partner (subject to the right of the unitholders to reconstitute and continue the business of AREP by written agreement of a majority interest and designation by them of a successor general partner within 90 days);	
 	 	 	
 	• 	the written consent or affirmative vote of a majority interest, with the approval of the general partner, to dissolve and terminate the partnership;	
 	 	 	
 	• 	the sale or other disposition of all or substantially all of the assets of the partnership;	
 	 	 	
 	• 	the partnership’s insolvency or bankruptcy; or	
 	 	 	
 	• 	any other event causing or requiring a dissolution under the Delaware Act.	
      The unitholders’ right to continue AREP described above is subject to the receipt of an opinion of counsel to the effect that the continuation and the selection of a successor general partner will not result in the loss of limited liability of the unitholders and will not cause AREP to be treated as an association taxable as a corporation for federal income tax purposes. Upon dissolution, the general partner or other

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entity or person authorized to wind up the affairs of AREP will proceed to liquidate the assets of AREP and apply the proceeds of liquidation in the order of priority set forth in the partnership agreement.
DESCRIPTION OF DEBT SECURITIES
      We will issue our debt securities under one or more separate indentures between us and a trustee that we will name in the applicable supplement to this prospectus. Following the execution of any indenture, the indenture will be filed with the SEC and incorporated by reference in the registration statement of which this prospectus is a part.
      The following summary describes certain material terms and provisions of our debt securities. When we offer to sell a particular series of debt securities, we will describe the specific terms of the series in the applicable supplement to this prospectus. You should read the applicable indenture for more details regarding the provisions of particular debt securities.
General
      The debt securities will be our direct obligations which may be either senior debt securities or subordinated debt securities. The debt securities will be issued under one or more indentures. Senior securities and subordinated securities may be issued pursuant to separate indentures, in each case between us and a trustee, which may be the same indenture trustee, subject to such amendments or supplements as may be adopted from time to time. The senior indenture and the subordinated indenture, as amended or supplemented from time to time, are sometimes hereinafter referred to collectively as the “indentures.” The indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended. The statements made under this heading relating to the debt securities and the indentures are summaries of their provisions, do not purport to be complete and are qualified in their entirety by reference to the indentures and the debt securities.
Terms
      The indebtedness represented by the senior securities will rank equally with all our other unsecured and unsubordinated indebtedness. The indebtedness represented by subordinated securities will be subordinated in right of payment to the prior payment in full of our senior securities. The particular terms of the debt securities offered by us will be described in one or more supplements to this prospectus, along with any applicable federal income tax considerations unique to such debt securities. Accordingly, for a description of the terms of any series of debt securities, reference must be made to both the prospectus supplement relating to that series and the description of the debt securities set forth in this prospectus.
      Except as set forth in any prospectus supplement, our debt securities may be issued without limits as to aggregate principal amount, in one or more series, in each case as established from time to time by us or as set forth in the applicable indenture or in one or more supplemental indentures. All debt securities of one series need not be issued at the same time and, unless otherwise provided, a series may be reopened, without the consent of the holders of the debt securities of that series, for issuance of additional debt securities of that series.
      Any indenture trustee under an indenture may resign or be removed with respect to one or more series of debt securities and a successor indenture trustee may be appointed to act with respect to such series.
      The following sets forth certain general terms and provisions of the indentures and the debt securities. The prospectus supplement relating to the series of debt securities being offered will contain further terms of those debt securities, including the following specific terms:
 	 	
 	      (1) The title of the debt securities and whether the debt securities are secured, unsecured, senior securities or subordinated securities;	
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 	      (2) The aggregate principal amount of the debt securities and any limit on such aggregate principal amount;	
 	 	
 	      (3) The price (expressed as a percentage of the principal amount of the series) at which the debt securities will be issued and, if other than the principal amount of the debt securities, the portion of the principal amount of the debt securities payable upon declaration of the maturity of the debt securities, or (if applicable) the portion of the principal amount of the debt securities that is convertible into common units or preferred units, or the method by which any such portion shall be determined;	
 	 	
 	      (4) If convertible, the terms on which such debt securities are convertible, including the initial conversion price or rate and the conversion period and any applicable limitations on the ownership or transferability of the common units or preferred units receivable on conversion;	
 	 	
 	      (5) The date or dates, or the method for determining the date or dates, on which the principal of the debt securities will be payable;	
 	 	
 	      (6) The rate or rates (which may be fixed or variable), or the method by which the rate or rates shall be determined, at which the debt securities will bear interest, if any;	
 	 	
 	      (7) The date or dates, or the method for determining the date or dates, from which any interest will accrue, the dates on which any interest will be payable, the record dates for interest payment dates, or the method by which the record dates shall be determined, the persons to whom interest shall be payable, and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months;	
 	 	
 	      (8) The place or places where the principal of (and premium, if any) and interest, if any, on the debt securities will be payable, where the debt securities may be surrendered for conversion or registration of transfer or exchange and where notices or demands to or upon us with respect to the debt securities and the applicable indenture may be served;	
 	 	
 	      (9) The period or periods, if any, within which, the price or prices at which and the other terms and conditions upon which the debt securities may, pursuant to any optional or mandatory redemption provisions, be redeemed, as a whole or in part, at our option;	
 	 	
 	      (10) Our obligation, if any, to redeem, repay or purchase the debt securities pursuant to any sinking fund or analogous provision or at the option of a holder of the debt securities, and the period or periods within which, the price or prices at which and the other terms and conditions upon which the debt securities will be redeemed, repaid or purchased, as a whole or in part, pursuant to such obligation;	
 	 	
 	      (11) If other than U.S. dollars, the currency or currencies in which such debt securities are denominated and payable, which may be a foreign currency or units of two or more foreign currencies or a composite currency or currencies, and the terms and conditions relating thereto;	
 	 	
 	      (12) Whether the amount of payments of principal of (and premium, if any) or interest, if any, on such debt securities may be determined with reference to an index, formula or other method (which index, formula or method may, but need not, be based on a currency, currencies, currency unit or units, or composite currency or currencies) and the manner in which such amounts shall be determined;	
 	 	
 	      (13) Whether the debt securities will be issued in certificated or book-entry form and, if so, the identity of the depositary for such securities;	
 	 	
 	      (14) Whether such debt securities will be in registered or bearer form or both and, if in registered form, the denominations thereof if other than $1,000 and any integral multiple thereof and, if in bearer form, the denominations thereof and terms and conditions relating thereto;	
 	 	
 	      (15) The applicability, if any, of the defeasance and covenant defeasance provisions described in this prospectus or set forth in the applicable prospectus supplement and indenture, or any modification thereof;	
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 	      (16) Whether and under what circumstances we will pay any additional amounts on the debt securities in respect of any tax, assessment or governmental charge and, if so, whether we will have the option to redeem the debt securities in lieu of making such payment;	

 	      (17) Any deletions from, modifications of or additions to the events of default or our covenants, to the extent different from those described in this prospectus, and any change in the right of any trustee or any of the holders to declare the principal amount of any debt securities due and payable;	

 	      (18) The provisions, if any, relating to the security provided for the debt securities; and	
 	 	
 	      (19) Any other terms of the debt securities not inconsistent with the provisions of the applicable indenture.	
      If so provided in the applicable prospectus supplement, our debt securities may be issued at a discount below their principal amount and provide for less than their entire principal amount to be payable upon declaration of acceleration of the maturity of the debt securities original issue discount securities. In such cases, any special U.S. federal income tax, accounting and other considerations applicable securities will be described in the applicable prospectus supplement.
      Except as may be set forth in any prospectus supplement, neither our debt securities nor the applicable indenture will contain any provisions that would limit our ability to incur indebtedness or that would afford holders of our debt securities protection in the event of a highly leveraged or similar transaction involving us or in the event of a change of control, regardless of whether the indebtedness, transaction or change of control is initiated or supported by us, any of our affiliates or any other party.
      Reference is made to the applicable prospectus supplement for information with respect to any deletions from, modifications of, or additions to, the events of default or covenants that are described below, including any addition of a covenant or other provision providing event risk or similar protection.
Denomination, Interest, Registration and Transfer
      Unless otherwise described in the applicable prospectus supplement, our debt securities of any series will be issuable in denominations of $1,000 and integral multiples thereof.
      Unless otherwise specified in the applicable prospectus supplement, the principal of (and applicable premium, if any) and interest on any series of debt securities will be payable at the corporate trust office of the applicable indenture trustee, except, that, at our option, payment of interest may be made by check mailed to the address of the person entitled to payment of interest as it appears in the applicable register for the debt securities.
      Our debt securities of any series will be exchangeable for any authorized denomination of other debt securities of the same series and of a like aggregate principal amount and tenor upon surrender of the debt securities at the corporate trust office of the applicable indenture trustee or at the office of any registrar designated by us for such purpose. In addition, subject to certain limitations imposed upon debt securities issued in book-entry form, our debt securities of any series may be surrendered for conversion or registration of transfer or exchange thereof at the corporate trust office of the applicable indenture trustee or at the office of any registrar designated us the for such purpose. Every debt security surrendered for conversion, registration of transfer or exchange must be duly endorsed or accompanied by a written instrument of transfer, and the person requesting such action must provide evidence of title and identity satisfactory to the applicable indenture trustee or registrar. Except as may be set forth in any prospectus supplement, no service charge will be made for any registration of transfer or exchange of any debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the registration of any transfer or exchange. If the applicable prospectus supplement refers to any registrar (in addition to the applicable indenture trustee) initially designated by us with respect to any series of debt securities, we may at any time rescind the designation of any such registrar or approve a change in the location through which any registrar acts, except that we will be required to maintain a transfer agent in each place of payment for such series.
      We may at any time designate additional registrars with respect to any series of debt securities.

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      Neither we nor any indenture trustee shall be required (1) to issue, register the transfer of or exchange debt securities of any series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing or (2) to register the transfer of or exchange any debt security, or portion of the debt security, selected for redemption, in whole or in part, except the unredeemed portion of any debt security being redeemed in part.
Merger, Consolidation or Sale of Assets
      The applicable indenture will provide that we may, without the consent of the holders of any outstanding debt securities, consolidate with, or sell, lease or convey all or substantially all of our or its assets to, or merge with or into, any other entity provided that (a) either we shall be the continuing entity, or the successor entity (if other than our company) formed by or resulting from any such consolidation or merger or which shall have received the transfer of such assets, is organized under the laws of any domestic jurisdiction and assumes our obligations to pay principal of (and premium, if any) and interest on all of the debt securities and the due and punctual performance and observance of all of the covenants and conditions contained in the indenture; (b) immediately after the transaction, no event of default under the applicable indenture, and no event which, after notice or the lapse of time, or both, would become an event of default, exists; and (c) an officers’ certificate and legal opinion covering these conditions shall be delivered to the applicable indenture trustee.
      Unless otherwise provided in the applicable indenture and set forth in the applicable prospectus supplement, the applicable indenture will provide that will not apply or be required to be complied with in connection with any merger or consolidation or sale, assignment, transfer, conveyance of all or substantially all of our assets to a wholly-owned subsidiary, provided that if we are not the surviving entity of the transaction, the surviving entity complies with clause (a).
Covenants
      Covenants with respect to any series of debt securities will be set forth in the applicable prospectus supplement.
Subordination of Subordinated Debt Securities
      Unless the prospectus supplement indicates otherwise, the following provisions will apply to the subordinated debt securities. To the extent we issue subordinated debt securities, they will also be contractually subordinated to any senior debt securities or other senior indebtedness that we may issue. The indebtedness underlying the subordinated debt securities will be payable only if all payments due under our senior indebtedness, including any outstanding senior debt securities, have been made. If we distribute our assets to creditors upon any dissolution, winding-up, liquidation or reorganization or in bankruptcy, insolvency, receivership or similar proceedings, we must first pay all amounts due or to become due on all senior indebtedness before we pay the principal of, or any premium or interest on, the subordinated debt securities. In the event the subordinated debt securities are accelerated because of any event of default, we may not make any payment on the subordinated debt securities until either we have paid all senior indebtedness or the acceleration is rescinded.
      If we experience a bankruptcy, dissolution or reorganization, holders of senior indebtedness may receive more, ratably, and holders of subordinated debt securities may receive less, ratably, than our other creditors.
Events of Default, Notice and Waiver
      Unless otherwise set forth in the applicable prospectus supplement, each indenture will provide that the following events are “Events of Default” with respect to any series of debt securities:
 	 	
 	      (1) default for 30 days in the payment of any installment of interest on any debt security of that series;	

 	      (2) default in the payment of principal of (or premium, if any, on) any debt security of the series at its maturity upon redemption or otherwise;	
 	 	
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 	      (3) default in the performance or breach of any other covenant contained in the indenture (other than a covenant added to the indenture solely for the benefit of a series of debt securities issued under the indenture other than such series), continued for 60 days after written notice as provided in the applicable Indenture has been given;	

 	 	
 	      (4) certain events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of our company or any guarantor that is a significant subsidiary, as defined; and	

 	 	
 	      (5) any other event of default provided with respect to a particular series of debt securities.	
 	 	
      If an event of default under any indenture with respect to debt securities of any series at the time outstanding occurs and is continuing, then in every such case the applicable indenture trustee or the holders of not less than 25% in principal amount of the debt securities of that series will have the right to declare the principal amount (or, if the debt securities of that series are original issue discount securities or indexed securities, such portion of the principal amount as may be specified in the terms of those debt securities) of all the debt securities of that series to be due and payable immediately by written notice thereof to us (and to the applicable indenture trustee if given by the holders). However, at any time after such a declaration of acceleration with respect to debt securities of any series (or of all debt securities then outstanding under any indenture, as the case may be) has been made, but before a judgment or decree for payment of the money due has been obtained by the applicable indenture trustee, the holders of not less than a majority in principal amount of outstanding debt securities of that series (or of all debt securities then outstanding under the applicable indenture, as the case may be) may rescind and annul the declaration and its consequences. The indentures also will provide that the holders of not less than a majority in principal amount of the outstanding debt securities of any series (or of all debt securities then outstanding under the applicable indenture, as the case may be) may waive any past default with respect to that series and its consequences, except a default in the payment of the principal of (or premium, if any) or interest on any debt security of that series.
      The indentures will require each indenture trustee to give notice to the holders of debt securities within 90 days of a default under the applicable indenture unless the default shall have been cured or waived; provided, however, that the indenture trustee may withhold notice to the holders of any series of debt securities of any default with respect to the series if specified responsible officers of such indenture trustee consider withholding of notice to be in the interest of the holders.
      Except as may be set forth in any prospectus supplement, each indenture will provide that no holder of debt securities of any series may institute any proceeding, judicial or otherwise, with respect to such indenture or for any remedy under it, except in the case of failure of the applicable indenture trustee, for 60 days, to act after it has received a written request to institute proceedings in respect of an event of default from the holders of not less than 25% in principal amount of the outstanding debt securities of that series, as well as an offer of indemnity reasonably satisfactory to it. This provision will not prevent, however, any holder of debt securities from instituting suit for the enforcement of payment of the principal of (and premium, if any) and interest on the debt securities at the respective due dates thereof.
      The indentures will provide that, subject to provisions in each indenture relating to its duties in case of default, an indenture trustee will be under no obligation to exercise any of its rights or powers under an indenture at the request or direction of any holders of any series of debt securities then outstanding under that indenture, unless the holders shall have offered to the indenture trustee under that indenture reasonable security or indemnity. The holders of not less than a majority in principal amount of the outstanding debt securities of any series (or of all debt securities then outstanding under an indenture, as the case may be) shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the applicable indenture trustee, or of exercising any trust or power conferred upon the indenture trustee. However, an indenture trustee may refuse to follow any direction which is in conflict with any law or the applicable indenture, which may involve the indenture trustee in personal liability or which may be unduly prejudicial to the holders of debt securities of such series not joining therein.

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      Within 90 days after the close of each fiscal year, we will be required to deliver to each indenture trustee a certificate, signed by one of several of our specified officers, stating whether or not the officer has knowledge of any default under the applicable indenture and, if so, specifying each default and the nature and status of the default.
Modification of the Indentures
      Except as may be set forth in any prospectus supplement, modifications and amendments of an indenture will be permitted to be made only with the consent of the holders of not less than a majority in principal amount of all outstanding debt securities issued under the indenture affected by the modification or amendment; provided, however, that no modification or amendment may, without the consent of the holder of each debt security affected thereby,
 	 	
 	      (1) change the stated maturity of the principal of, or any installment of interest (or premium, if any) on, any the debt security;	
 	 	
 	      (2) reduce the principal amount of, or the rate or amount of interest on, or any premium payable on redemption of, any such debt security, or reduce the amount of principal of an original issue discount security that would be due and payable upon declaration of acceleration of its maturity or would be provable in bankruptcy, or adversely affect any right of repayment of the holder of any such debt security;	

 	      (3) change the coin or currency for payment of principal of, premium, if any, or interest on any the debt security; or	

 	 	
 	      (4) modify any of the foregoing provisions or any of the provisions relating to the waiver of certain past defaults or certain covenants.	
 	 	
      The holders of a majority in aggregate principal amount of the outstanding debt securities of each series may, on behalf of all holders of debt securities of that series, waive, insofar as that series is concerned, compliance by us with certain restrictive covenants of the applicable indenture.
      Modifications and amendments of an indenture will be permitted to be made by us and the respective indenture trustee without the consent of any holder of debt securities for any of the following purposes:
 	 	
 	      (1) to evidence the succession of another person to our company as obligor under the indenture;	
 	 	
 	      (2) to add to the covenants of our company for the benefit of the holders of all or any series of debt securities or to surrender any right or power conferred upon us in such indenture;	

 	      (3) to add or change any provisions of an indenture to facilitate the issuance of, or to liberalize certain terms of, debt securities in bearer form, or to permit or facilitate the issuance of debt securities in uncertificated form; provided that the action shall not adversely affect the interest of the holders of the debt securities of any series in any material respect;	

 	 	
 	      (4) to change or eliminate any provisions of an indenture; provided that any such change or elimination shall be effective only when there are no debt securities outstanding of any series created prior thereto which are entitled to the benefit of such provision;	

 	 	
 	      (5) to provide for the acceptance of appointment by a successor indenture trustee or facilitate the administration of the trusts under an indenture by more than one indenture trustee;	

 	 	
 	      (6) to cure any ambiguity, defect or inconsistency in an indenture; or	

 	 	
 	      (7) to supplement any of the provisions of an indenture;	
 	 	
      The indentures will provide that, in determining whether the holders of the requisite principal amount of outstanding debt securities of a series have given any request, demand, authorization, direction, notice, consent or waiver under the applicable indenture or whether a quorum is present at a meeting of holders of debt securities, the principal amount of an original issue discount security that shall be deemed to be

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outstanding shall be the amount of principal that would be due and payable as of the date of the determination upon declaration of acceleration of the maturity of the original discount issue security pursuant to the indenture,
      Unless otherwise set forth in the applicable prospectus supplement, we will be permitted, at our option, to discharge certain obligations to holders of any series of debt securities issued under any indenture that have not already been delivered to the applicable indenture trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by irrevocably depositing with the applicable indenture trustee, in trust, funds in the currency or currencies, currency unit or units or composite currency or currencies in which the debt securities are payable in an amount sufficient to pay the entire indebtedness on the debt securities with respect to principal (and premium, if any) and interest to the date of the deposit (if such debt securities have become due and payable) or to the stated maturity or redemption date, as the case may be.
      Unless otherwise indicated in the applicable prospectus supplement, the indentures will provide that we may elect either

 	      (1) to defease and be discharged from any and all obligations with respect to such debt securities, or	

 	 	
 	      (2) to be released from our obligations with respect to covenants under the applicable indenture.	
 	 	
      In either case upon the irrevocable deposit by us with the applicable indenture trustee, in trust, of an amount sufficient to pay the principal of (and premium, if any) and interest on the debt securities on the stated maturity or on the applicable redemption date.
      Such a trust will only be permitted to be established if, among other things, we have delivered to the applicable indenture trustee an opinion of counsel (as specified in the applicable indenture) and to the effect that the holders of the outstanding debt securities will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. In the event of defeasance, the holders of debt securities would thereafter be able to look only to the trust fund for payment of principal (and premium, if any) and interest.
      The applicable prospectus supplement may further describe the provisions, if any, permitting such defeasance or covenant defeasance, including any modifications to the provisions described above, with respect to the debt securities of or within a particular series.
Conversion Rights
      The terms and conditions, if any, upon which the debt securities are convertible into depositary units or preferred units will be set forth in the applicable prospectus supplement relating thereto. Such terms will include whether such debt securities are convertible into depositary units or preferred units, the conversion price (or manner of calculation thereof), the conversion period, provisions as to whether conversion will be at our option or the option of the holders, the events requiring an adjustment of the conversion price and provisions affecting conversion in the event of the redemption of such debt securities and any restrictions on conversion.
Payment
      Unless otherwise set forth in the applicable prospectus supplement, the principal of (and applicable premium, if any) and interest on any series of debt securities will be payable at the corporate trust office of the indenture trustee, the address of which will be stated in the applicable prospectus supplement; provided that, at our option payment of interest may be made by check mailed to the address of the person entitled thereto as it appears in the applicable register for such debt securities or by wire transfer of funds to such person at an account maintained within the United States.

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      All moneys paid by us to a paying agent or an indenture trustee for the payment of the principal of or any premium or interest on any debt security which remain unclaimed at the end of one year after such principal, premium or interest has become due and payable will be repaid to us, and the holder of such debt security thereafter may look only to us for payment thereof.
Global Securities
      The debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the applicable prospectus supplement relating to such series. Global securities may be issued in either registered or bearer form and in either temporary or permanent form. The specific terms of the depositary arrangement with respect to a series of debt securities will be described in the applicable prospectus supplement relating to such series.
DESCRIPTION OF WARRANTS TO PURCHASE DEBT SECURITIES
      The following summarizes the terms of the warrants to purchase debt securities we may offer. The summaries contained in this prospectus, together with the description of warrants to purchase debt securities and indentures included in the applicable prospectus supplement, will provide the material terms of the warrants to purchase debt securities and of the indenture.
General
      We may issue debt warrants evidenced by debt warrant certificates independently or together with any securities offered by any prospectus supplement. If we offer debt warrants, the prospectus supplement will describe the terms of the warrants, including:
 	 	 	
 	• 	the offering price, if any;	
 	 	 	
 	• 	the designation, aggregate principal amount and terms of the debt securities purchasable upon exercise of the warrants and the terms of the applicable indenture under which the debt securities will be issued;	
 	 	 	
 	• 	if applicable, the designation and terms of the debt securities with which the debt warrants are issued and the number of debt warrants issued with each debt security;	
 	 	 	
 	• 	if applicable, the date on and after which the debt warrants and the related securities will be separately transferable;	
 	 	 	
 	• 	the principal amount of debt securities purchasable upon exercise of one debt warrant and the price at which the principal amount of debt securities may be purchased upon exercise;	
 	 	 	
 	• 	the dates on which the right to exercise the debt warrants begins and expires;	
 	 	 	
 	• 	U.S. federal income tax consequences;	
 	 	 	
 	• 	whether the warrants represented by the debt warrant certificates will be issued in registered or bearer form;	
 	 	 	
 	• 	the currencies in which the offering price and exercise price are payable; and	
 	 	 	
 	• 	if applicable, any antidilution provisions.	
      You may exchange debt warrant certificates for new debt warrant certificates of different denominations and may present debt warrant certificates for registration of transfer at the corporate trust office of the debt warrant agent, which will be listed in the prospectus supplement. Warrantholders do not have any of the rights of holders of debt securities, except to the extent that the consent of warrantholders may be required for certain modifications of the terms of the applicable indenture or form of the debt security, as the case may be, and the series of debt securities issuable upon exercise of the debt warrants.

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In addition, warrantholders are not entitled to payments of principal of and interest, if any, on the debt securities.
Exercise of Debt Warrants
      You may exercise debt warrants by surrendering the debt warrant certificate at the corporate trust office of the debt warrant agent, with payment in full of the exercise price. Upon the exercise of debt warrants, the debt warrant agent will, as soon as practicable, deliver the debt securities in authorized denominations in accordance with your instructions and at your sole cost and risk. If less than all the debt warrants evidenced by the debt warrant certificate are exercised, the agent will issue a new debt warrant certificate for the remaining amount of debt warrants.
DESCRIPTION OF WARRANTS TO PURCHASE
DEPOSITARY UNITS OR PREFERRED UNITS
      The following summarizes the terms of depositary unit warrants and preferred unit warrants we may issue. This description is subject to the detailed provisions of a stock warrant agreement that we will enter into between us and a warrant agent we select at the time of issue.
General
      We may issue warrants evidenced by warrant certificates under a warrant agreement independently or together with any securities we offer by any prospectus supplement. If we offer stock warrants, the prospectus supplement will describe the terms of the stock warrants, including:
 	 	 	
 	• 	the offering price, if any;	
 	 	 	
 	• 	if applicable, the designation and terms of the preferred unit purchasable upon exercise of the preferred unit warrants;	
 	 	 	
 	• 	the number of shares of depositary units or preferred units purchasable upon exercise of one warrant and the initial price at which the units may be purchased upon exercise;	
 	 	 	
 	• 	the dates on which the right to exercise the warrants begins and expires;	
 	 	 	
 	• 	U.S. federal income tax consequences;	
 	 	 	
 	• 	call provisions, if any;	
 	 	 	
 	• 	the currencies in which the offering price and exercise price are payable; and	
 	 	 	
 	• 	if applicable, the antidilution provisions of the warrants.	
      The units we issue upon exercise of the stock warrants will, when issued in accordance with the warrant agreement, be validly issued, fully paid and nonassessable.
Exercise of Warrants
      You may exercise warrants by surrendering to the warrant agent the warrant certificate, which indicates your election to exercise all or a portion of the warrants evidenced by the certificate. Surrendered warrant certificates must be accompanied by payment of the exercise price in the form of cash or a check. The warrant agent will deliver certificates evidencing duly exercised stock warrants to the transfer agent. Upon receipt of the certificates, the transfer agent will deliver a certificate representing the number of depositary units or preferred units purchased. If you exercise fewer than all the warrants evidenced by any certificate, the warrant agent will deliver a new stock warrant certificate representing the unexercised stock warrants.

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No Rights as Unitholders
      Holders of warrants are not entitled to vote, to consent, to receive distributions or to receive notice as unitholders with respect to any meeting, or to exercise any rights whatsoever as unitholders of the partnership.
PLAN OF DISTRIBUTION
      We may sell our securities in or outside the United States to or through underwriters or dealers, through agents or directly to other purchasers. The applicable supplement to this prospectus with respect to our securities, will set forth the terms of the offering of our securities, including the name or names of any underwriters, dealers or agents, the public offering price, any underwriting discounts and other items constituting underwriter compensation, any discounts or concessions allowed or reallowed or paid to dealers, and any securities exchanges on which the securities may be listed.
      Our securities may be sold directly by us or through agents designated by us from time to time at fixed prices, which may be changed, or at varying prices determined at the time of a sale of our securities. Any agent involved in the offer or sale of our securities will be named, and any commissions payable by us to such agent will be set forth, in the supplement to this prospectus relating thereto.
      In connection with the sale of our securities, underwriters or agents may receive compensation from us or from purchasers of our securities, for whom they may act as agents, in the form of discounts, concessions or commissions.
      Underwriters may sell our securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of our securities may be deemed to be underwriters under the Securities Act, and any discounts or commissions they receive from us and any profit on the resale of our securities they realize may be deemed to be underwriting discounts and commissions under the Securities Act. Any such underwriter or agent will be identified, and any such compensation received from us will be described, in the applicable supplement to this prospectus. Unless otherwise set forth in the supplement to this prospectus relating thereto, the obligations of the underwriters or agents to purchase our securities will be subject to conditions precedent and the underwriters will be obligated to purchase all our securities if any are purchased. The public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
      Any depositary units sold pursuant to this prospectus and applicable prospectus supplement, will be approved for trading, upon notice of issuance, on the New York Stock Exchange.
LEGAL MATTERS
      DLA Piper Rudnick Gray Cary US LLP, New York, New York, will provide us with an opinion as to certain legal matters in connection with the securities we are offering.
EXPERTS
American Real Estate Partners, L.P.
      The consolidated financial statements, financial statement schedule and management’s assessment of effectiveness of internal control over financial reporting of American Real Estate Partners, L.P. as of December 31, 2005 and 2004 and for years ended December 31, 2005 and 2004, incorporated by reference in this prospectus to American Real Estate Partners, L.P.’s Annual Report on Form 10-K, as amended, as of and for the year ended December 31, 2005, have been audited by Grant Thornton LLP, independent registered public accounting firm, as stated in its reports with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports.
      The consolidated statements of operations, changes in partners’ equity and comprehensive income, and cash flows for the year ended December 31, 2003 and related financial statement schedule for the year

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ended December 31, 2003 in American Real Estate Partners, L.P.’s Annual Report on Form 10-K/A for the year ended December 31, 2005, have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
 	 	
 	American Property Investors, Inc.	
      The balance sheet of American Property Investors, Inc. as of December 31, 2005, incorporated by reference in this prospectus to American Real Estate Partners, L.P.’s Current Report on Form 8-K filed on April 18, 2006, has been audited by Grant Thornton LLP, independent registered public accounting firm, as stated in its report with respect thereto, and is incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report.
 	 	
 	WestPoint Stevens Inc.	
      The consolidated financial statements of WestPoint Stevens Inc. as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, appearing in American Real Estate Partners, L.P.’s Form 8-K/A dated October 21, 2005 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph describing conditions that raise substantial doubt about WestPoint Stevens Inc.’s ability to continue as a going concern as described in Note 2 to the consolidated financial statements) included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
 	 	
 	GB Holdings, Inc.	
      The consolidated financial statements of GB Holdings, Inc. and subsidiaries as of December 31, 2004 and for each of the years in the two-year period ended December 31, 2004 have been audited by KPMG LLP as set forth in the report of KPMG LLP, independent registered public accounting firm, and such report has been incorporated by reference to American Real Estate Partners, L.P.’s Annual Report on Form 10-K, as amended, as of and for the year ended December 31, 2005 upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2004 consolidated financial statements contains an explanatory paragraph that states that GB Holdings’ recurring net losses, net working capital deficiency and significant debt obligations which are due within one year raise substantial doubt about the entity’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.
INDEPENDENT PETROLEUM CONSULTANTS AND GEOLOGISTS
      Information incorporated by reference in this prospectus concerning reserve evaluations and related calculations as of December 31, 2005, 2004 and 2003 for the Longfellow Ranch properties owned by NEG Operating LLC are incorporated herein in reliance upon the report of DeGolyer and MacNaughton, independent petroleum engineering consultants, given upon their authority as experts in petroleum engineering.
      The estimated reserve evaluations and related calculations as of December 31, 2005, 2004 and 2003 for properties held by NEG Operating LLC, and, as of December 31, 2005 and 2004 for properties held by National Onshore LP and National Offshore LP located in East Texas, West Texas, the Gulf of Mexico, the Gulf Coast, the Arkoma Basin of Arkansas and Oklahoma and the Andarko Basin of Oklahoma are incorporated herein in reliance upon the report of Netherland, Sewell & Associates, Inc., independent petroleum engineering consultants, given upon their authority as experts in petroleum engineering.
      Information incorporated by reference in this prospectus concerning reserve evaluations and related calculations as of December 31, 2004 and 2003 for our properties held by NEG Operating LLC in connection with the acquisition of Shana National LLC are incorporated herein in reliance upon the

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authority of Prator Bett, L.L.C., independent petroleum consultants, given upon their authority as experts in petroleum engineering.
WHERE YOU CAN FIND MORE INFORMATION
      We have filed with the SEC a registration statement on Form S-3 under the Securities Act to register the units and debt securities offered by this prospectus. This prospectus is part of the registration statement. This prospectus does not contain all the information contained in the registration statement because we have omitted certain parts of the registration statement in accordance with the rules and regulations of the SEC. For further information, we refer you to the registration statement, which you may read and copy at the public reference facilities maintained by the SEC at 100 F Street, N. E. Room 1580, Washington, D.C. 20549. You may obtain copies at the prescribed rates from the Public Reference Section of the SEC at its principal office in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for further information about the public reference rooms. The SEC maintains a web site that contains reports, proxy and information statements and other information regarding us. You may access the SEC’s web site at http://www.sec.gov.
      We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. As a result, we are required to file reports, proxy statements and other information with the SEC. These materials can be copied and inspected at the locations described above. Copies of these materials can be obtained from the Public Reference Section of the SEC at 100 F Street, N. E. Room 1580, Washington, D.C. 20549, at prescribed rates. Our depositary units are listed on the New York Stock Exchange under the symbol “ACP.”
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
      The SEC allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below, all filings made pursuant to the Securities and Exchange Act of 1934 after the date of the initial registration statement and prior to effectiveness of the registration statement and any other future filings we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act:
 	 	 	
 	• 	Our Annual Report on Form 10-K and 10-K/A for the fiscal year ended December 31, 2005, filed with the SEC on March 16, 2006 and March 31, 2006, respectively (SEC File No. 1-9516);	

 	• 	Our Current Report on Form 8-K/A, filed with the SEC on October 21, 2005, and our Current Reports on Form 8-K, filed with the SEC on February 17, 2006 and April 18, 2006 (SEC File No. 1-9516);  and	

 	• 	The description of the depositary units contained in the Registration Statement on Form 8-A, initially filed on May 12, 1987, and any subsequent amendment thereto filed for the purpose of updating such description.	
      You may request a copy of these filings (not including the exhibits to such documents unless the exhibits are specifically incorporated by reference in the information contained in this prospectus), at no cost, by writing or telephoning us at the following address:
American Real Estate Partners, L.P.
100 South Bedford Road
Mt. Kisco, New York 10549
Attn: Chief Financial Officer
Telephone requests may be directed to (914) 242-7700

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      This prospectus is part of a registration statement we filed with the SEC. You should rely only on the information or representations provided in this prospectus. We have authorized no one to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted.
      You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document.
      Statements contained in this prospectus as to the contents of any contract or document are not necessarily complete and in each instance reference is made to the copy of that contract or document filed as an exhibit to the registration statement or as an exhibit to another filing, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto.

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AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.
 
PROSPECTUS

 

Table of Contents
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
 	 	
Item 14.	Other Expenses of Issuance and Distribution	
      The Securities and Exchange Commission registration fee and the estimated expenses in connection with the offering are as follows:
 	 	 	 	 	
Securities and Exchange Commission registration fee	 	$	117,700	 	
Accounting fees and expenses	 	 	75,000	 	
Legal fees and expenses	 	 	75,000	 	
Printing expenses	 	 	15,000	 	
Miscellaneous	 	 	5,000	 	
 	 	 	 	
TOTAL	 	$	287,700	 	

 	 	
Item 15.	Indemnification of Directors and Officers.	
Indemnification Under the Delaware Limited Partnership Act and the American Real Estate Partners L.P. Limited Partnership Agreement
      American Real Estate Partners, L.P. is organized under the laws of Delaware. Section 17-108 of the Delaware Revised Uniform Limited Partnership Act (the “Partnership Act”) provides that a limited partnership may, and shall have the power to, indemnify and hold harmless any partners or other persons from and against any and all claims and demands whatsoever, subject to such standards and restrictions set forth in the partnership agreement.
      Section 6.15 of the Amended and Restated Agreement of Limited Partnership of American Real Estate Partners, L.P., dated as of May 12, 1987, provides that the general partner, its affiliates, and all officers, directors, employees and agents of the general partner and its affiliates (individually, an “Indemnitee”), to the fullest extent permitted by law, will be indemnified and held harmless from and against any and all losses, claims, demands, costs, damages, liabilities, joint and several, expenses of any nature (including attorneys’ fees and disbursements), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise by reason of its status as (x) the General Partner or an Affiliate thereof or (y) a partner, shareholder, director, officer, employee or agent of the General Partner or an Affiliate thereof or (z) a Person serving at the request of the Partnership in another entity in a similar capacity, which relate to, arise out of or are incidental to the Partnership, its property, business or affairs, including, without limitation, liabilities under the federal and state securities laws, regardless of whether the Indemnitee continues to be a General Partner, an Affiliate, or an officer, director, employee or agent of the General Partner or of an Affiliate thereof at the time any such liability or expense is paid or incurred, if (i) the Indemnitee acted in good faith and in a manner it believed to be in, or not opposed to, the best interests of the Partnership, and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful and (ii) the Indemnitee’s conduct did not constitute willful misconduct. The agreement further provides that an Indemnitee shall not be denied indemnification in whole or in part under Section 6.15 by reason of the fact that the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of the partnership agreement. Any indemnification under Section 6.15 shall be satisfied solely out of the assets of the partnership. The Record Holders shall not be subject to personal liability by reason of the indemnification provision.

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Indemnification Under the Delaware General Corporation Law and the Certificate of Incorporation and Bylaws of American Real Estate Finance Corp.
      American Real Estate Finance Corp. (“AREP Finance”) is a corporation incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee of or agent to the Registrants. The statute provides that it is not exclusive of other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise.
 	 	
Item 16.	Exhibits	
(a) Exhibits
      See the accompanying Exhibit Index.
Item 17.     Undertakings
      The undersigned registrants hereby undertake:
 	 	
 	      (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;	

 	 	
 	      (i) To include any prospectus required by Section 10(a)(3) of the Securities Act;	

 	      (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;	
 	 	
 	      (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;	

 	provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrants pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of the registration statement.	

 	      (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial  bona fide  offering thereof.	
 	 	
 	      (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.	
 	 	
 	      (4) That, for the purpose of determining liability under the Securities Act to any purchaser:	
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 	      (i) If the registrant is relying on Rule 430B:	

 	 	
 	      (A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and	

 	 	
 	      (B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(l)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial  bona fide  offering thereof.  Provided, however , that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or	

 	 	
 	      (ii) If the Registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a Registration Statement relating to an offering, other than Registration Statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness.  Provided, however , that no statement made in a Registration Statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.	

 	 	
 	      (5) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, in a primary offering of securities of the undersigned registrants pursuant to the registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrants will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:	

 	      (i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;	
 	 	
 	      (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrants or used or referred to by the undersigned registrant;	
 	 	
 	      (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and	
 	 	
 	      (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.	
      (6) That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

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(and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide  offering thereof.
      (7) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer of controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
      (8) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective.
      (9) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial  bona fide  offering thereof.
      (10) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed under the Commission under Section 305(b)(2) of the Trust Indenture Act.

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SIGNATURES
      Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing a Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York on April 21, 2006.
 	 	
 	AMERICAN REAL ESTATE PARTNERS, L.P.	

 	By: 	American Property Investors, Inc., its general partner	
 	 	 	
 	By: 	/s/ Keith A. Meister	

 	Keith A. Meister	
 	Principal Executive Officer and	
 	Vice Chairman of the Board	
      Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

/s/ Keith A. Meister

Keith A. Meister	 	Principal Executive Officer
and Vice Chairman of the Board
(Principal Executive Officer)	 	April 21, 2006	
 	
*

Jon F. Weber	 	President and Chief Financial Officer (Principal Financial Officer)	 	April 21, 2006	
 	
*

Adrian Tannian	 	Chief Accounting Officer
(Principal Accounting Officer)	 	April 21, 2006	
 	
*

Jack G. Wasserman	 	Director	 	April 21, 2006	
 	
*

William A. Leidesdorf	 	Director	 	April 21, 2006	
 	
*

James L. Nelson	 	Director	 	April 21, 2006	
 	
*

Carl C. Icahn	 	Chairman of the Board	 	April 21, 2006	

*By: 	/s/ Keith A. Meister	 	

 	 	
 	 	
Keith A. Meister, Attorney-in-fact	 	
 	 	
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SIGNATURES
      Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing a Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York on April 21, 2006.
 	 	
 	AMERICAN REAL ESTATE FINANCE CORP.	

 	By: 	/s/ Keith A. Meister	

 	Keith A. Meister	
 	Principal Executive Officer and	
 	Vice Chairman of the Board	
      Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

/s/ Keith A. Meister

Keith A. Meister	 	Principal Executive Officer and
Vice Chairman of the Board
(Principal Executive Officer)	 	April 21, 2006	
 	
*

Jon F. Weber	 	President and Chief Financial Officer (Principal Financial Officer)	 	April 21, 2006	
 	
*

Adrian Tannian	 	Chief Accounting Officer
(Principal Accounting Officer)	 	April 21, 2006	
 	
*

Jack G. Wasserman	 	Director	 	April 21, 2006	
 	
*

William A. Leidesdorf	 	Director	 	April 21, 2006	
 	
*

James L. Nelson	 	Director	 	April 21, 2006	
 	
*

Carl C. Icahn	 	Chairman of the Board	 	April 21, 2006	

*By: 	/s/ Keith A. Meister	 	

 	 	
 	 	
Keith A. Meister, Attorney-in-fact	 	
 	 	
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EXHIBIT INDEX
 	 	
Item 16.	Exhibits	

Exhibit No.	 	Description	
 	 	 	
 	1	.1	 	Form of Underwriting Agreement.†	
 	3	.1	 	Amended and Restated Agreement of Limited Partnership of AREP, dated as of May 12, 1987 (incorporated by reference to Exhibit No. 3.2 to AREP’s Form 10-Q for the quarter ended March 31, 2004 (SEC File No. 1-9516), filed on May 10, 2004).	
 	3	.2	 	Amendment No. 1 to the Amendment and Restated Agreement of Limited Partnership of AREP, dated February 22, 1995 (incorporated by reference to Exhibit 3.3 to AREP’s Form 10-K for the year ended December 31, 1994 (SEC File No. 1-9516), filed on March 31, 1995).	
 	3	.3	 	Amendment No. 2 to the Amended and Restated Agreement of Limited Partnership of AREP, dated as of August 16, 1996 (incorporated by reference to Exhibit 10.1 to AREP’s Form 8-K (SEC File No. 1-9516), filed on August 16, 1996).	
 	3	.4	 	Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership of AREP, dated May 9, 2002 (incorporated by reference to Exhibit 3.8 to AREP’s Form 10-K for the year ended December 31, 2002 (SEC File No. 1-9516), filed on March 31, 2003).	
 	3	.5	 	Amendment No. 4 to the Amended and Restated Agreement of Limited Partnership of AREP, dated June 29, 2005 (incorporated by reference to Exhibit No. 3.1 to AREP’s Form 10-Q for the quarter ended June 30, 2005 (SEC File No. 1-9516), filed on August 9, 2005).	
 	3	.6	 	Amended and Restated Agreement of Limited Partnership of AREH, dated as of May 21, 1987 (incorporated by reference to Exhibit 3.5 to AREP’s Form 10-Q for the quarter ended March 31, 2004 (SEC File No. 1-9516), filed on May 10, 2004).	
 	3	.7	 	Amendment No. 1 to the Amended and Restated Agreement of Limited Partnership of AREH, dated August 16, 1996 (incorporated by reference to Exhibit 10.2 to AREP’s Form 8-K (SEC File No. 1-9516), filed on August 16, 1996).	
 	3	.8	 	Amendment No. 2 to the Amended and Restated Agreement of Limited Partnership of AREH, dated June 14, 2002 (incorporated by reference to Exhibit 3.9 to AREP’s Form 10-K for the year ended December 31, 2002 (SEC File No. 1-9516), filed on March 31, 2003).	
 	3	.9	 	Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership of AREH, dated May 9, 2002 (incorporated by reference to Exhibit 3.2 to AREP’s Form 10-Q for the quarter ended June 30, 2005 (SEC File No. 1-9516), filed on August 9, 2005).	
 	4	.1	 	Depositary Agreement among AREP, American Property Investors, Inc. and Registrar and Transfer Company, dated as of July 1, 1987 (incorporated by reference to Exhibit 4.1 to AREP’s Form 10-Q for the quarter ended March 31, 2004 (SEC File No. 1-9516), filed on May 10, 2004).	
 	4	.2	 	Amendment No. 1 to the Depositary Agreement dated as of February 22, 1995 (incorporated by reference to Exhibit 4.2 to AREP’s Form 10-K for the year ended December 31, 1994 (SEC File No. 1-9516), filed on March 31, 1995).	
 	4	.3	 	Specimen Depositary Receipt (incorporated by reference to Exhibit 4.3 to AREP’s Form 10-K for the year ended December 31, 2004 (SEC File No. 1-9516), filed on March 16, 2005).	
 	4	.4	 	Form of Transfer Application (incorporated by reference to Exhibit 4.4 to AREP’s Form 10-K for the year ended December 31, 2004 (SEC File No. 1-9516), filed on March 16, 2005).	
 	4	.5	 	Specimen Certificate representing preferred units (incorporated by reference to Exhibit No. 4.9 to AREP’s Form S-3 (SEC File No. 33-54767), filed on February 22, 1995).	
 	4	.6	 	Form of Amendment to Amended and Restated Agreement of Limited Partnership of AREP setting forth the rights and preferences of Preferred Units.†	
 	4	.7	 	Form of Indenture.	
 	4	.8	 	Form of Indenture.	
 	5	.1	 	Opinion of DLA Piper Rudnick Gray Cary US LLP.	

Table of Contents
 	 	 	 	 	
Exhibit No.	 	Description	
 	 	 	
 	8	.1	 	Opinion of DLA Piper Rudnick Gray Cary US LLP as to certain federal income tax matters.†	
 	12	.1	 	Ratio of earnings to fixed charges.	
 	23	.1	 	Consent of Grant Thornton LLP.	
 	23	.2	 	Consent of Grant Thornton LLP.	
 	23	.3	 	Consent of KPMG LLP.	
 	23	.4	 	Consent of KPMG LLP.	
 	23	.5	 	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.	
 	23	.6	 	Consent of Degolyer and MacNaughton.	
 	23	.7	 	Consent of Netherland, Sewell & Associates, Inc.	
 	23	.8	 	Consent of Netherland, Sewell & Associates, Inc.	
 	23	.9	 	Consent of Netherland, Sewell & Associates, Inc.	
 	23	.10	 	Consent of Prator Bett, L.L.C.	
 	23	.11	 	Consent of DLA Piper Rudnick Gray Cary US LLP (included in Exhibit 5.1).	
 	24	 	 	Power of Attorney (previously filed).	
 	25	.1	 	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 under the Indenture.†	

† 	To be filed by amendment or as an exhibit to a report pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act.	

Exhibit 4.7

================================================================================

AMERICAN REAL ESTATE PARTNERS, L.P.

AMERICAN REAL ESTATE FINANCE CORP.

Issuers

and

WILMINGTON TRUST COMPANY

Trustee

----------

INDENTURE

Dated as of _______________ ____, __________

Senior Debt Securities

================================================================================

CROSS-REFERENCE TABLE*

TRUST INDENTURE ACT SECTION                                    INDENTURE SECTION
---------------------------                                    -----------------

310(a)(1)...................................................   7.10
(a)(2)...................................................   7.10
(a)(3)...................................................   N.A.
(a)(4)...................................................   N.A.
(a)(5)...................................................   7.10
(b)......................................................   7.08; 7.10
(c)......................................................   N.A.
311(a)......................................................   7.11
(b)......................................................   7.11
(c)......................................................   N.A.
312(a)......................................................   2.06
(b)......................................................   11.03
(c)......................................................   11.03
313(a)......................................................   7.06
(b)(1)...................................................   7.06
(b)(2)...................................................   7.06; 7.07
(c)......................................................   7.06; 11.02
(d)......................................................   7.06
314(a)......................................................   4.02; 4.03; 11.02
(b)......................................................   N.A.
(c)(1)...................................................   11.04
(c)(2)...................................................   11.04
(c)(3)...................................................   N.A.
(d)......................................................   N.A.
(e)......................................................   11.05
(f)......................................................   N.A.
315(a)......................................................   7.01
(b)......................................................   7.05; 11.02
(c)......................................................   7.01
(d)......................................................   7.01
(e)......................................................   6.11
316(a)(last sentence).......................................   2.09
(a)(1)(A)................................................   6.05
(a)(1)(B)................................................   6.04
(a)(2)...................................................   N.A.
(b)......................................................   6.07
(c)......................................................   9.04
317(a)(1)...................................................   6.08

i

(a)(2)...................................................   6.09
(b)......................................................   2.05
318(a)......................................................   11.01
(b)......................................................   N.A.
(c)......................................................   11.01

N.A. means not applicable.

*    This Cross-Reference Table is not part of the Indenture.

ii

TABLE OF CONTENTS

Page No.
--------

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.................       1
SECTION 1.01.  Definitions........................................       1
SECTION 1.02.  Other Definitions..................................       6
SECTION 1.03.  Incorporation by Reference of Trust Indenture Act..       6
SECTION 1.04.  Rules of Construction..............................       6

ARTICLE 2 THE SECURITIES.............................................       7
SECTION 2.01.  Issuable in Series.................................       7
SECTION 2.02.  Establishment of Terms of Series of Securities.....       7
SECTION 2.03.  Execution and Authentication.......................      10
SECTION 2.04.  Registrar and Paying Agent.........................      11
SECTION 2.05.  Paying Agent to Hold Money in Trust................      11
SECTION

2.06.  Holders Lists......................................      12
SECTION 2.07.  Transfer and Exchange..............................      12
SECTION 2.08.  Mutilated, Destroyed, Lost and Stolen Securities...      12
SECTION 2.09.  Outstanding Securities.............................      13
SECTION 2.10.  Treasury Securities................................      13
SECTION 2.11.  Temporary Securities...............................      14
SECTION 2.12.  Cancellation.......................................      14
SECTION 2.13.  Defaulted Interest.................................      14
SECTION 2.14.  Global Securities..................................      14
SECTION 2.15.  CUSIP Numbers......................................      17

ARTICLE 3 REDEMPTION AND PREPAYMENT..................................      17
SECTION 3.01.  Notices to Trustee.................................      17
SECTION 3.02.  Selection of Securities to be Redeemed.............      18
SECTION 3.03.  Notice of Redemption...............................      18
SECTION 3.04.  Effect of Notice of Redemption.....................      19
SECTION 3.05.  Deposit of Redemption Price........................      19
SECTION 3.06.  Securities Redeemed in Part........................      20

ARTICLE 4 COVENANTS..................................................      20
SECTION 4.01.  Payment of Securities..............................      20
SECTION 4.02.  Reports............................................      20
SECTION 4.03.  Compliance Certificate.............................      20
SECTION 4.04.  Corporate Existence................................      21
SECTION 4.05.  Calculation of Original Issue Discount.............      22

ARTICLE 5 SUCCESSORS.................................................      22
SECTION 5.01. Merger, Consolidation or Sale of Assets.............      22

ARTICLE 6 DEFAULTS AND REMEDIES......................................      23
SECTION 6.01.  Events of Default..................................      23
SECTION 6.02.  Acceleration.......................................      24
SECTION 6.03.  Other Remedies.....................................      24
SECTION 6.04.  Waiver of Past Defaults............................      25
SECTION 6.05.  Control By Majority................................      25

iii

TABLE OF CONTENTS CONT'D

Page No.
--------

SECTION 6.06.  Limitation on Suits................................      25
SECTION 6.07.  Rights of Holders to Receive Payment...............      26
SECTION 6.08.  Collection Suit by Trustee.........................      26
SECTION 6.09.  Trustee May File Proofs of Claim...................      26
SECTION 6.10.  Priorities.........................................      26
SECTION 6.11.  Undertaking For Costs..............................      27

ARTICLE 7 TRUSTEE....................................................      27
SECTION 7.01.  Duties of Trustee..................................      27
SECTION 7.02.  Rights of Trustee..................................      28
SECTION 7.03.  Individual Rights of Trustee.......................      29
SECTION 7.04.  Trustee's Disclaimer...............................      29
SECTION 7.05.  Notice of Defaults.................................      29
SECTION 7.06.  Reports By Trustee to Holders......................      29
SECTION 7.07.  Compensation and Indemnity.........................      30
SECTION 7.08.  Replacement of Trustee.............................      31
SECTION 7.09.  Successor Trustee by Merger, Etc...................      32
SECTION 7.10.  Eligibility; Disqualification......................      32
SECTION 7.11.  Preferential Collection of Claims Against the
Company............................................      32

ARTICLE 8 DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE........      32
SECTION 8.01.  Discharge; Option to Effect Legal Defeasance or
Covenant Defeasance................................      32
SECTION 8.02.  Legal Defeasance and Discharge.....................      33
SECTION 8.03.  Covenant Defeasance................................      33
SECTION 8.04.  Conditions to Legal or Covenant Defeasance.........      34
SECTION 8.05.  Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions......      35
SECTION 8.06.  Repayment to the Company...........................      36
SECTION 8.07.  Reinstatement......................................      36

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER...........................      36
SECTION 9.01.  Without Consent of Holders.........................      36
SECTION 9.02.  With Consent of Holders of Securities..............      38
SECTION 9.03.  Compliance with Trust Indenture Act................      39
SECTION 9.04.  Revocation and Effect of Consents and Waivers......      39
SECTION 9.05.  Notation on or Exchange of Securities..............      40
SECTION 9.06.  Trustee to Sign Amendments, Etc....................      40

ARTICLE 10 NOTE GUARANTEES...........................................      40
SECTION 10.01. Guarantee..........................................      40
SECTION 10.02. Limitation on Guarantor Liability..................      41
SECTION 10.03. Execution and Delivery of Guarantee................      42

ARTICLE 11 MISCELLANEOUS.............................................      42

iv

TABLE OF CONTENTS CONT'D

Page No.
--------

SECTION 11.01. Trust Indenture Act Controls.......................      42
SECTION 11.02. Notices............................................      42
SECTION 11.03. Communication by Holders of Securities with Other
Holders of Securities..............................      43
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent..........................................      44
SECTION 11.05. Statements Required in Certificate or Opinion......      44
SECTION 11.06. Rules by Trustee, Paying Agent and Registrar.......      44
SECTION 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.........................      44
SECTION 11.08. GOVERNING LAW......................................      44
SECTION 11.09. No Adverse Interpretation of Other Agreements......      45
SECTION 11.10. Successors.........................................      45
SECTION 11.11. Severability.......................................      45
SECTION 11.12. Counterpart Originals..............................      45
SECTION 11.13. Table of Contents, Headings, Etc...................      45

v

INDENTURE dated as of [__], [__] between American Real Estate Partners,
L.P., a Delaware limited partnership ("AREP") American Real Estate Finance
Corp., a Delaware corporation ("AREP Finance" and together with AREP, the
"Company"), and Wilmington Trust Company, as trustee (the "Trustee").

The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the Securities issued
under this Indenture (the "Securities"):

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

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

"Agent" means any Registrar, Paying Agent or co-registrar.

"AREP" means American Real Estate Partners, L.P. (and not any of its
subsidiaries).

"AREP Finance" means American Real Estate Finance Corp.

"Bankruptcy Law" means Title 11 of the United States Code, as amended, or
any similar federal, state or foreign law for the relief of debtors.

"Board of Directors" means, with respect to any Person, the board of
directors or comparable governing body of such Person.

"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been adopted by the Board of
Directors or pursuant to authorization by the Board of Directors and to be in
full force and effect on the date of the certificate and delivered to the
Trustee.

"Business Day" means any day other than a Legal Holiday.

"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, but excluding any debt securities convertible into such equity.

1

"Clearstream" means Clearstream Banking, Societe Anonyme, Luxembourg.

"Commission" or "SEC" means the Securities and Exchange Commission.

"Company" means, collectively AREP and AREP Finance, and any and all
successors thereto.

"Company Order" means a written order signed in the name of the Company by
two Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer.

"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of management and policies of a Person, whether
through the ownership of Voting Stock, by agreement or otherwise.

"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 10.02 or such other address as to which the Trustee
may give notice to the Company.

"Custodian" means the Trustee, as custodian with respect to the Securities
in global form, or any successor entity thereto.

"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

"Definitive Security" means a certificated Security registered in the name
of the Holder thereof and issued in accordance with Section 2.07.

"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.14 as the
Depositary with respect to the Securities, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

"Dollar" means a dollar or other equivalent unit in such coin or currency
of the United States as at the time shall be legal tender for the payment of
public and private debt.

"Euroclear" means the Euroclear System.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, the Commission or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect from

2

time to time; provided, however, that all reports and other financial
information provided by the Company to the Holders of the Securities, the
Trustee and/or the Commission shall be prepared in accordance with GAAP, as in
effect on the date of such report or other financial information.

"Global Security" when used with respect to any Series of Securities issued
hereunder, means a Security which is executed by the Company and authenticated
and delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture supplemental
hereto, if any, or Board Resolution and pursuant to a Company Order, which shall
be registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all the outstanding Securities of such Series or any
portion thereof, in either case having the same terms, including, without
limitation, the same original issue date, date or dates on which principal and
interest are due, and interest rate or method of determining interest and which
shall bear the legend as prescribed by Section 2.14(c).

"Global Security Legend" means the legend set forth in Section 2.14.(c),
which is required to be placed on all Global Securities issued under this
Indenture.

"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.

"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).

"Guarantor" means AREP in the event that AREP executes a Guarantee in
accordance with the provisions of this Indenture, and its successors and
assigns, in each case, until the Guarantee has been released in accordance with
the provisions of this Indenture.

"Holder" means a Person in whose name a Security is registered on the
Registrar's books.

"Indebtedness" has the meaning specified in the applicable Board
Resolution, supplemental indenture or Officers' Certificate relating to a
particular Series of Securities.

"Indenture" means this Indenture, as amended or supplemented from time to
time.

"Interest Payment Date" when used with respect to any Series of Securities,
means the date specified in such Securities for the payment of any installment
of interest on those Securities.

"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive

3

order to remain closed. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue on such payment for the
intervening period.

"Maturity" when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.

"Offering" means the offering of the Securities by the Company.

"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.

"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, delivered to the Trustee that meets the requirements of Section
10.05.

"Opinion of Counsel" means a written opinion from legal counsel that meets
the requirements of Section 10.05. The counsel may be an employee of or counsel
to the Company, any Subsidiary of the Company or the Trustee.

"Original Issue Discount Security" means any Security that provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02.

"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to the Depositary Trust Company,
shall include Euroclear and Clearstream).

"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

"Securities" has the meaning assigned to it in the preamble to this
Indenture.

"Securities Act" means the Securities Act of 1933, as amended.

4

"Series" or "Series of Securities" means each series of debentures, notes
or other debt instruments of the Company created pursuant to Sections 2.01 and
2.02.

"Significant Subsidiary" means any Subsidiary which would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended.

"Stated Maturity" when used with respect to any Security, means the date
specified in such Security as the fixed date on which an amount equal to the
principal amount of such Security is due and payable.

"Subsidiary" means, with respect to any specified Person:

(1) any corporation, association or other business entity of which
more than 50% of the total Voting Stock is at the time owned or Controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).

"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.

"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.

"Voting Stock" means, with respect to any Person that is (a) a corporation,
any class or series of capital stock of such Person that is ordinarily entitled
to vote in the election of directors thereof at a meeting of stockholders called
for such purpose, without the occurrence of any additional event or contingency,
(b) a limited liability company, membership interests entitled to manage, or to
elect or appoint the Persons that will manage the operations or business of the
limited liability company, or (c) a partnership, partnership interests entitled
to elect or replace the general partner thereof.

"Wholly Owned Subsidiary" of a Person means a subsidiary of such person all
of the outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.

5

SECTION 1.02. Other Definitions.

Defined in
Term                                           Section
----                                         ----------

"Covenant Defeasance".....................      8.03
"Event of Default"........................      6.01
"Legal Defeasance"........................      8.02
"notice of acceleration"..................      6.02
"Paying Agent"............................      2.04
"Registrar"...............................      2.04
"Service Agent"...........................      2.04
"Transfer"................................      5.01

SECTION 1.03. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

"Indenture Securities" means the Securities;

"Indenture Security Holder" means a Holder of a Security;

"Indenture to be Qualified" means this Indenture;

"Indenture Trustee" or "Institutional Trustee" means the Trustee; and

"Obligor" on the Securities means the Company and any successor obligor
upon the Securities.

All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.

SECTION 1.04. Rules of Construction.

Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;

(c) words in the singular include the plural, and in the plural include the
singular;

6

(d) provisions apply to successive events and transactions; and

(e) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the Commission from time to time.

ARTICLE 2

THE SECURITIES

SECTION 2.01. Issuable in Series. The aggregate principal amount of
Securities that may be authenticated and delivered under this Indenture is
unlimited. The Securities may be issued in one or more Series. All Securities of
a Series shall be identical except as may be set forth in a Board Resolution, a
supplemental indenture or an Officers' Certificate detailing the adoption of the
terms thereof pursuant to the authority granted under a Board Resolution. In the
case of Securities of a Series to be issued from time to time, the Board
Resolution, Officers' Certificate or supplemental indenture may provide for the
method by which specified terms (such as interest rate, maturity date, record
date or date from which interest shall accrue) are to be determined. Securities
may differ between Series in respect of any matters.

SECTION 2.02. Establishment of Terms of Series of Securities. At or prior
to the issuance of any Securities within a Series, the following shall be
established (as to the Series generally, in the case of Subsection 2.02(a) and
either as to such Securities within the Series or as to the Series generally in
the case of Subsections 2.02(b) through 2.02(x)) by a Board Resolution, a
supplemental indenture or an Officers' Certificate pursuant to authority granted
under a Board Resolution:

(a) the title of the Securities of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);

(b) any limit upon the aggregate principal amount of the Securities of the
Series that may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the Series);

(c) the date or dates on which the principal and premium, if any, of the
Securities of the Series are payable;

(d) the rate or rates (which may be fixed or variable) at which the
Securities of the Series shall bear interest, if any, or the method of
determining such rate or rates, the date or dates from which such interest, if
any, shall accrue, the Interest Payment Dates on which such interest, if any,
shall be payable or the method by which the Interest Payment Dates will be
determined, the record dates for the determination of Holders thereof to whom
interest is payable (in the case of Securities in registered form), and the
basis upon which such interest will be calculated if other than that of a
360-day year of twelve 30-day months;

7

(e) the currency or currencies, including composite currencies, in which
Securities of the Series shall be denominated, if other than Dollars, the place
or places, if any, in addition to or instead of the Corporate Trust Office of
the Trustee (in the case of Securities in registered form) or the principal New
York office of the Trustee (in the case of Securities in bearer form), where the
principal, premium, if any, and interest with respect to Securities of such
Series shall be payable or the method of such payment, if by wire transfer, mail
or other means;

(f) the price or prices at which, the period or periods within which, and
the terms and conditions upon which, Securities of the Series may be redeemed,
in whole or in part, at the option of the Company or otherwise;

(g) whether Securities of the Series are to be issued in registered form or
bearer form or both and, if Securities are to be issued in bearer form, whether
coupons will be attached to them, whether Securities of the Series in bearer
form may be exchanged for Securities of the Series in registered form, and the
circumstances under which and the places at which any such exchanges, if
permitted, may be made;

(h) if any Securities of the Series are to be issued in bearer form or as
one or more Global Securities representing individual Securities of the Series
in bearer form, whether certain provisions for the payment of additional
interest or tax redemptions shall apply; whether interest with respect to any
portion of a temporary Security of the Series in bearer form payable with
respect to any Interest Payment Date prior to the exchange of such temporary
Security in bearer form for definitive Securities of the Series in bearer form
shall be paid to any clearing organization with respect to the portion of such
temporary Security in bearer form held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be credited to
the Person entitled to interest payable on such Interest Payment Date; and the
terms upon which a temporary Security in bearer form may be exchanged for one or
more definitive Securities of the Series in bearer form;

(i) the obligation, if any, of the Company to redeem, purchase or repay the
Securities of the Series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the price or prices at which, the period
or periods within which, and the terms and conditions upon which, Securities of
the Series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligations;

(j) the terms, if any, upon which the Securities of the Series may be
convertible into or exchanged for any of the Company's common stock, preferred
stock, other securities or warrants to purchase the Company's common stock,
preferred stock or other securities and the terms and conditions upon which such
conversion or exchange shall be effected, including the initial conversion or
exchange price or rate, the conversion or exchange period and any other
additional provisions;

(k) if other than denominations of one thousand U.S. dollars ($1,000) or
any integral multiple thereof, the denominations in which the Securities of the
Series shall be issuable;

8

(l) if the amount of principal, premium, if any, or interest with respect
to the Securities of the Series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;

(m) if the principal amount payable at the Stated Maturity of Securities of
the Series will not be determinable as of any one or more dates prior to such
Stated Maturity, the amount that will be deemed to be such principal amount as
of any such date for any purpose, including the principal amount thereof which
will be due and payable upon any Maturity other than the Stated Maturity and
which will be deemed to be outstanding as of any such date (or, in any such
case, the manner in which such deemed principal amount is to be determined),
and, if necessary, the manner of determining the equivalent thereof in Dollars;

(n) the applicability of, if any, and any changes or additions to Article
8;

(o) if other than the principal amount thereof, the portion of the
principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02;

(p) the terms, if any, of the transfer, mortgage, pledge or assignment as
security for the Securities of the Series of any properties, assets, moneys,
proceeds, securities or other collateral, including whether certain provisions
of the TIA are applicable and any corresponding changes to provisions of this
Indenture as then in effect;

(q) any addition to or change in the Events of Default which applies to any
Securities of the Series and any change in the right of the Trustee or the
requisite Holders of such Series of Securities to declare the principal,
premium, if any, and interest on such Series of Securities due and payable
pursuant to Section 6.02;

(r) if the Securities of the Series shall be issued in whole or in part in
the form of a Global Security, the terms and conditions, if any, upon which such
Global Security may be exchanged in whole or in part for other individual
Definitive Securities of such Series, the Depositary for such Global Security
and the form of any legend or legends to be borne by any such Global Security in
addition to or in lieu of the Global Securities Legend;

(s) any Trustee, authenticating agent, Paying Agent, transfer agent,
Service Agent or Registrar;

(t) the applicability of, and any addition to or change in, the covenants
(and the related definitions) set forth in Articles 4 or 5 which applies to the
Securities of the Series;

(u) with regard to Securities of the Series that do not bear interest, the
dates for certain required reports to the Trustee;

(v) any United Stated Federal income tax consequences applicable to the
Securities;

(w) the terms applicable to Original Issue Discount Securities, including
the rate or rates at which original issue discount will accrue; and

9

(x) any other terms of Securities of the Series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 9.01, but which may modify or delete any provision of this Indenture
insofar as it applies to such Series).

All Securities of any one Series need not be issued at the same time and
may be issued from time to time, consistent with the terms of this Indenture, if
so provided by or pursuant to the Board Resolution, supplemental indenture or
Officers' Certificate referred to above, and the authorized principal amount of
any Series may not be increased to provide for issuances of additional
Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers' Certificate.

SECTION 2.03. Execution and Authentication. One Officer shall sign the
Securities for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid. A Security shall not
be valid until authenticated by the manual signature of the Trustee or an
authenticating agent. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.

The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture or Officers' Certificate, upon receipt by the
Trustee of a Company Order. Such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which oral instructions shall be promptly
confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, supplemental
indenture or Officers' Certificate.

The aggregate principal amount of Securities of any Series outstanding at
any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture or Officers'
Certificate delivered pursuant to Section 2.02, except as provided in Section
2.08.

Prior to the issuance of Securities of any Series, the Trustee shall have
received and (subject to Section 7.02) shall be fully protected in relying on:
(a) the Board Resolution, supplemental indenture or Officers' Certificate
establishing the form of the Securities of that Series or of Securities within
that Series and the terms of the Securities of that Series or Securities within
that Series; (b) an Officers' Certificate complying with Section 10.05; and (c)
an Opinion of Counsel complying with Section 10.05.

The Trustee shall have the right to decline to authenticate and deliver any
Securities of such Series: (a) if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken; or (b) if the Trustee in
good faith by its board of directors or trustees, executive committee or a trust
committee of directors and/or vice-presidents shall determine that such action
would expose the Trustee to personal liability to Holders of any then
outstanding Series of Securities.

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The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.

SECTION 2.04. Registrar and Paying Agent. The Company shall maintain, with
respect to each Series of Securities, at the place or places specified with
respect to such Series pursuant to Section 2.02, an office or agency where
Securities of such Series may be presented or surrendered for payment ("Paying
Agent"), where Securities of such Series may be presented for registration of
transfer or for exchange ("Registrar") and where notices and demands to or upon
the Company in respect of the Securities of such Series and this Indenture may
be served ("Service Agent"). The Registrar shall keep a register with respect to
each Series of Securities and to their transfer and exchange. The Company will
give prompt written notice to the Trustee of the name and address, and any
change in the name and address, of each Registrar, Paying Agent or Service
Agent. If at any time the Company shall fail to maintain any such required
Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee
with the name and address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more co-registrars,
additional paying agents or additional services agents and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligations to
maintain a Registrar, Paying Agent and Service Agent in each place so specified
pursuant to Section 2.02 for Securities of any Series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the name or address of any such co-registrar,
additional paying agent or additional service agent. The term "Registrar"
includes any co-registrar, the term "Paying Agent" includes any additional
paying agent; and the term "Service Agent" includes any additional service
agent.

The Company hereby appoints the Trustee as the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time the
Securities of that Series are first issued.

SECTION 2.05. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent, other than the Trustee, to agree in writing that the
Paying Agent will hold in trust, for the benefit of Holders of any Series of
Securities, or the Trustee, all money held by the Paying Agent for the payment
of principal of or interest on the Series of Securities, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders

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of any Series of Securities all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Securities.

SECTION 2.06. Holders Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders of each Series of Securities and shall
otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least seven Business Days before
each Interest Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of each Series of Securities
and the Company shall otherwise comply with TIA Section 312(a).

SECTION 2.07. Transfer and Exchange. When Securities of a Series are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal principal amount of Securities of the
same Series, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.11, 3.06, or 9.05).

Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing or (b)
to register the transfer or exchange of any Security of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.

SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same Series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding. If there shall be delivered to the Company
and the Trustee (i) evidence to their satisfaction of the destruction, loss or
theft of any Security and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and make available for delivery, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same
Series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

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In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

Every new Security of any Series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the Series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

SECTION 2.09. Outstanding Securities. The Securities outstanding at any
time are all the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, those reductions in the
interest in a Global Security effected by the Trustee in accordance with the
provisions hereof, and those described in this Section 2.09 as not outstanding.
A Security does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Security.

If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on the Maturity of Securities of a Series money
sufficient to pay such Securities of the Series payable on that date, then on
and after that date such Securities of the Series shall be deemed to be no
longer outstanding and shall cease to accrue interest.

In determining whether the Holders of the requisite principal amount of
outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the principal amount of an Original Issue
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.02.

SECTION 2.10. Treasury Securities. In determining whether the Holders of
the required principal amount of Securities of a Series have concurred in any
request, demand, authorization, notice, direction, waiver or consent, Securities
of a Series owned by the Company or an Affiliate shall be disregarded, except
that for the purposes of determining whether the

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Trustee shall be protected in relying on any such request, demand,
authorization, notice, direction, waiver or consent, only Securities of a Series
that the Trustee knows are so owned shall be disregarded.

SECTION 2.11. Temporary Securities. Until Definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities upon a Company Order. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary Securities shall be entitled to the
same rights under this Indenture as the Definitive Securities.

SECTION 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and Paying Agent shall forward to
the Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Securities (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all canceled
Securities shall be delivered to the Company. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.

SECTION 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on a Series of Securities, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, any interest payable on the defaulted
interest, to the Persons who are Holders of the Series on a subsequent special
record date. The Company shall fix each such special record date and payment
date. At least 15 days before the special record date, the Company (or upon the
written request of the Company, the Trustee, in the name and at the expense of
the Company) shall mail or cause to be mailed to Holders of the Series a notice
that states the special record date, the related payment date and the amount of
such interest to be paid. The Company may pay defaulted interest in any other
lawful manner.

SECTION 2.14. Global Securities.

(a) Terms of Securities. A Board Resolution, a supplemental indenture
hereto or an Officers' Certificate shall establish whether the Securities of a
Series shall be issued in whole or in part in the form of one or more Global
Securities and the Depositary for such Global Security or Securities.

(b) Transfer and Exchange. Notwithstanding any provisions to the contrary
contained in Section 2.07 and in addition thereto, any Global Security shall be
exchangeable pursuant to Section 2.07 for Securities registered in the names of
Holders other than the Depositary for such Security or its nominee only if:

(i) such Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time
such Depositary ceases

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to be a clearing agency registered under the Exchange Act, and in either
case, the Company fails to appoint a successor Depositary within 90 days of
such event;

(ii) the Company executes and delivers to the Trustee an Officers'
Certificate to the effect that such Global Security shall be so
exchangeable; or

(iii) an Event of Default with respect to the Securities represented
by such Global Security shall have happened and be continuing. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names as the Depository
shall direct in writing in an aggregate principal amount equal to the
principal amount of the Global Security with like tenor and terms.

Except as provided in this Section 2.14(b), a Global Security may not be
transferred except as a whole by the Depositary with respect to such Global
Security to a nominee of such Depositary, by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such a successor
Depositary.

(c) Legend. Any Global Security issued hereunder shall bear a legend in
substantially the following form:

"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) 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 (I) THIS GLOBAL
SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.07 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE DELIVERED TO
THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE
AND (III) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE
PARTNERS, L.P."

(d) Acts of Holders.

(i) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and

15

evidenced thereby) are herein sometimes referred to as the "Act" of Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.

(ii) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such officer
the execution thereof. Where such execution is by a signer acting in a
capacity other than such signer's individual capacity, such certificate or
affidavit shall also constitute sufficient proof of such signer's
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.

(iii) The ownership of bearer securities may be proved by the
production of such bearer securities or by a certificate executed by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that
at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the bearer securities therein described; or
such facts may be proved by the certificate or affidavit of the Person
holding such bearer securities, if such certificate or affidavit is deemed
by the Trustee to be satisfactory. The Trustee and the Company may assume
that such ownership of any bearer security continues until (A) another such
certificate or affidavit bearing a later date issued in respect of the same
bearer security is produced, (B) such bearer security is produced to the
Trustee by some other Person, (C) such bearer security is surrendered in
exchange for a registered security or (D) such bearer security is no longer
outstanding. The ownership of bearer securities may also be proved in any
other manner which the Trustee deems sufficient.

(iv) The ownership of registered securities shall be proved by the
register maintained by the Registrar.

(v) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.

(vi) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so if

16

such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than six months after the record date.

(e) Payments. Notwithstanding the other provisions of this Indenture,
unless otherwise specified as contemplated by Section 2.02, payment of the
principal of and interest, if any, on any Global Security shall be made to the
Holder thereof.

(f) Consents, Declaration and Directions. Except as provided in Section
2.14(e), the Company, the Trustee and any Agent shall treat a person as the
Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.

SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
elements of identification printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any change in CUSIP Numbers.

ARTICLE 3

REDEMPTION AND PREPAYMENT

SECTION 3.01. Notices to Trustee. The Company may, with respect to any
Series of Securities, reserve the right to redeem and pay the Series of
Securities or may covenant to redeem and pay the Series of Securities or any
part thereof prior to the Stated Maturity thereof at such time and on such terms
as provided for in such Series of Securities. If a Series of Securities is
redeemable and the Company wants or is obligated to redeem prior to the Stated
Maturity thereof all or part of the Series of Securities pursuant to the terms
of such Securities, it shall notify the Trustee of the redemption date and the
principal amount of Securities of the Series to be redeemed and the redemption
price. The Company shall give such notice to the Trustee at least 30 but no more
than 60 days before the redemption date (or such shorter notice as may be
acceptable to the Trustee).

17

SECTION 3.02. Selection of Securities to be Redeemed. Unless otherwise
indicated for a particular Series by a Board Resolution, supplemental indenture
or an Officers' Certificate, if less than all of the Securities are to be
redeemed or purchased in an offer to purchase at any time, the Trustee shall
select the Securities to be redeemed or purchased as follows: (a) if the
Securities are listed on any national securities exchange, in compliance with
the requirements of the principal national securities exchange, if any, on which
the Securities are listed; or (b) if the Securities are not listed on a national
securities exchange, on a pro rata basis, by lot or in accordance with any other
method as the Trustee considers fair and appropriate. No Securities of $1,000
principal amount or less will be redeemed in part. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The
Trustee shall make the selection at least 25 but not more than 60 days before
the redemption date from outstanding Securities of a Series previously called
for redemption.

If any Security is to be redeemed in part only, the notice of redemption
that relates to such Security shall state the portion of the principal amount of
that Security to be redeemed. A new Security in principal amount equal to the
unredeemed portion of the original Security presented for redemption will be
issued in the name of the Holder thereof upon cancellation of the original
Security. Securities called for redemption become due on the date fixed for
redemption. On and after the redemption date, interest ceases to accrue or
accrete on Securities or portions of them called for redemption.

SECTION 3.03. Notice of Redemption. Unless otherwise provided for a
particular Series of Securities by a Board Resolution, a supplemental indenture
or an Officers' Certificate, at least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Securities are to be redeemed
at its registered address.

The notice shall identify the Securities to be redeemed and shall state:

(a) the redemption date;

(b) the Redemption Price (as defined in the Indenture for the Series of
Securities);

(c) if any Security is being redeemed in part, the portion of the principal
amount of such Security to be redeemed and that, after the redemption date upon
surrender of such Security, a new Security or Securities in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Security;

(d) the name and address of the Paying Agent;

(e) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;

(f) that, unless the Company defaults in making such redemption payment or
the Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest on the Securities called for redemption ceases to
accrue on and after the redemption date;

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(g) the paragraph of the Securities and/or provision of this Indenture or
any supplemental indenture or Board Resolution pursuant to which the Securities
called for redemption are being redeemed;

(h) the CUSIP number, if any, printed on the Securities being redeemed; and

(i) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Securities.

At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date (or such shorter period as shall be acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.

SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is
mailed in accordance with Section 3.03, Securities called for redemption become
irrevocably due and payable on the redemption date at the redemption price, plus
accrued and unpaid interest to such date. A notice of redemption may not be
conditional. Failure to give notice or any defect in the notice to the Holder of
any Security shall not affect the validity of the notice to any other Holder.

SECTION 3.05. Deposit of Redemption Price. On or before 12:00 p.m. (New
York City time) on the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent (or if the Company or any Subsidiary is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price, of and accrued interest on, all Securities to be redeemed on
that date, other than Securities or portions of Securities called for redemption
that have been delivered to the Trustee for cancellation. The Trustee or the
Paying Agent shall as promptly as practicable return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Securities to be redeemed. If such money is then held by the Company or a
Subsidiary in trust and is not required for such purpose, it shall be discharged
from such trust.

If the Company complies with the provisions of the preceding paragraph, on
and after the redemption, interest shall cease to accrue on the Securities
called for redemption. If a Security is redeemed on or after an interest record
date but on or prior to the related Interest Payment Date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Security was
registered at the close of business on such record date. If any Security called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal from the redemption date until such principal is
paid, and to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate provided in the Securities.

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SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and, upon the Company's
written request, the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.

ARTICLE 4

COVENANTS

SECTION 4.01. Payment of Securities. The Company covenants and agrees for
the benefit of the Holders of each Series of Securities that it will duly and
punctually make all payments in respect of each Series of Securities on the
dates and in the manner provided in such Series of Securities and this
Indenture. Such payments shall be considered made on the date the Trustee or the
Paying Agent, if other than the Company or a Subsidiary thereof, holds, in
accordance with this Indenture, funds sufficient to make all payments with
respect to such Securities then due and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Holders on that
date pursuant to the terms of this Indenture.

SECTION 4.02. Reports. Unless otherwise indicated in a Board Resolution, a
supplemental indenture or an Officers' Certificate, whether or not required by
the rules and regulations of the Commission so long as any Securities are
outstanding, the Company shall furnish to the Trustee and the Holders of the
Securities the following:

(a) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants;

(b) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports; and

(c) any other information, reports and documents that the Company is
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act.

in each case, within the time periods specified in the Commission's rules and
regulations; provided that such information and reports need not be furnished to
the Holders if they are generally available on the Internet free of charge.

In addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability within the time periods specified in
the Commission's rules and regulations (unless the Commission shall not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request.

SECTION 4.03. Compliance Certificate.

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(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each of the Company and any other
obligors has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge each entity has fulfilled
all of its obligations under this Indenture throughout such year and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and the nature and status thereof).

(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.02(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation, reasonably satisfactory to the
Trustee) that in making the examination necessary for certification of such
financial statements, nothing has come to their attention that would lead them
to believe that a Default or an Event of Default has occurred and is continuing
or, if any such Default or Event of Default has occurred and is continuing,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such Default or Event of Default. In the
event that such written statement of the Company's independent public
accountants cannot be obtained, the Company shall deliver an Officers'
Certificate certifying that it has used its best efforts to obtain such
statements and was unable to do so.

(c) The Company shall, so long as any Securities are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default that is then continuing, an Officers' Certificate specifying
such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.

SECTION 4.04. Corporate Existence. Subject to Article 5, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect:

(a) its corporate, partnership or other existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary; and

(b) the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Securities.

21

SECTION 4.05. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Securities as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.

ARTICLE 5

SUCCESSORS

SECTION 5.01. Merger, Consolidation or Sale of Assets. Unless otherwise
provided for in a particular Series by a Board Resolution, a supplemental
indenture or an Officers' Certificate, the Company shall not consolidate with or
merge into (whether or not the Company is the surviving entity), or sell,
assign, transfer, lease, convey or otherwise dispose of (collectively,
"Transfer") all or substantially all of its properties or assets to, another
Person unless:

(a) the resulting, surviving or transferee Person (the "Successor Company")
shall be a corporation, limited liability company or limited partnership
organized or existing under the laws of the United States, any state thereof or
the District of Columbia;

(b) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such Transfer has been made
assumes all the obligations of the Company under the Securities and this
Indenture pursuant to a supplemental indenture or amendment, in a form
reasonably satisfactory to the Trustee;

(c) immediately after such transaction, no Default exists; and

(d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or Transfer complies with this Indenture.

The Successor Company shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture (as modified
by a Board Resolution, supplemental indenture or Officers' Certificate), and the
predecessor Company, except in the case of a lease of all or substantially all
of its assets, shall be released from the obligation to pay the principal of and
interest on the Securities. The foregoing will not prohibit a consolidation or
merger between the Company and a Wholly Owned Subsidiary, the transfer of all or
substantially all of the properties or assets of the Company to a Wholly Owned
Subsidiary or the transfer of all or substantially all of the properties or
assets of a Wholly Owned Subsidiary to the Company; provided, that if the
Company is not the surviving entity of such transaction or the Person to which
such transfer is made, the surviving entity or the Person to which such transfer
is made shall comply with clause (b) of this paragraph.

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ARTICLE 6

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default. Unless otherwise indicated for a
particular Series of Securities by a Board Resolution, a supplemental indenture
or an Officers' Certificate, each of the following constitutes an "Event of
Default" with respect to each Series of Securities:

(a) default for 30 days in the payment of interest when due with respect to
the Securities;

(b) default in payment when due of principal or premium, if any, on the
Securities at maturity, upon redemption or otherwise;

(c) failure by the Company for 30 days after receipt of notice (as
specified below) to comply with the provisions described under Section 2.04,
4.02, 4.03 or 5.01;

(d) failure by the Company for 60 days after notice (as specified below) to
comply with its other agreements in this Indenture or the Securities;

(e) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:

(i) commences a voluntary case;

(ii) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor;

(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property; or

(iv) makes a general assignment for the benefit of its creditors;

(f) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(i) is for relief against the Company or any Significant Subsidiary in
an involuntary case in which it is the debtor;

(ii) appoints a custodian of the Company or any Significant Subsidiary
or for all or substantially all of its property; or

(iii) orders the liquidation of the Company or any Significant
Subsidiary;

and the order or decree contemplated in clause (i), (ii) or (iii), remains
unstayed and in effect for 60 consecutive days;

23

A Default under paragraph (c) or (d) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default".

To the extent that the last day of the period referred to in paragraph (a),
(c), (d), (e) or (f) of this Section 6.01 is not a Business Day, then the first
Business Day following such day shall be deemed to be the last day of the period
referred to in such clauses. Any "day" will be deemed to end as of 11:59 p.m.,
New York City time.

SECTION 6.02. Acceleration. If an Event of Default with respect to any
Series of Securities at the time outstanding (other than an Event of Default
with respect to the Company specified in paragraph (e) and (f) of Section 6.01)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Securities of that Series may declare
the unpaid principal of, (or, in the case of Original Issue Discount Securities
of that Series, the portion thereby specified in the terms of such Security)
premium, if any, and accrued and unpaid interest on all the Securities of that
Series to be due and payable by notice in writing to the Company (and the
Trustee, if given by the Holders) specifying the respective Event of Default and
that it is a "notice of acceleration." Upon such a declaration, such amounts
shall be due and payable immediately. If an Event of Default with respect to the
Company specified in paragraph (e) or (f) of Section 6.01 occurs, the principal
amount of (or, in the case of Original Issue Discount Securities of that Series,
the portion thereby specified in the terms of such Security), premium, if any,
and accrued and unpaid interest on all the Securities of each Series of Security
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in principal amount of the then outstanding Securities of any
Series of Securities by written notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived with respect to such Series of Securities (except nonpayment of the
principal amount of (or, in the case of Original Issue Discount Securities of
that Series, the portion thereby specified in the terms of such Security),
premium, if any, and accrued and unpaid interest on all the Securities of that
Series that has become due solely because of the acceleration).

SECTION 6.03. Other Remedies. If an Event of Default with respect to any
Series of Securities occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the principal amount of (or, in the
case of Original Issue Discount Securities of that Series, the portion thereby
specified in the terms of such Security), premium, if any, and accrued and
unpaid interest on all the Securities of that Series or to enforce the
performance of any provision of the Securities of that Series or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of
the Securities of a Series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default with respect to any Series of Securities shall
not impair the right or remedy or constitute a waiver of

24

or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.

SECTION 6.04. Waiver of Past Defaults. Holders of at least a majority in
principal amount of the Securities of any Series (including consents obtained in
connection with a tender offer or exchange for Securities) by notice to the
Trustee may on behalf of the Holders of all of Securities of that Series waive
an existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal amount of
(or, in the case of Original Issue Discount Securities of that Series, the
portion thereby specified in the terms of such Security), premium, if any, and
accrued and unpaid interest on all the Securities of that Series. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.

SECTION 6.05. Control By Majority. Holders of a majority in principal
amount of the then outstanding Securities of any Series may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it with
respect to that Series. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee determines may be prejudicial to the rights of any other Holder of
Securities of that Series or that may involve the Trustee in personal liability.

SECTION 6.06. Limitation on Suits. Except to enforce the right to receive
payment of the principal amount of (or, in the case of Original Issue Discount
Securities, the portion thereby specified in the terms of such Security),
premium, if any, and accrued and unpaid interest on a Security of Series when
due, no Holder of a Security of that Series may pursue any remedy with respect
to this Indenture or the Securities of that Series unless:

(a) the Holder previously gave to the Trustee written notice of a
continuing Event of Default;

(b) the Holders of at least 25% in principal amount of the then outstanding
Securities of that Series make a written request to the Trustee to pursue the
remedy;

(c) such Holder or Holders of that Series offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;

(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and

(e) during such 60-day period the Holders of a majority in principal amount
of the outstanding Securities of that Series do not give the Trustee a direction
inconsistent with the request.

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A Holder of Securities of any Series may not use this Indenture to
prejudice the rights of another Holder of that Series or to obtain a preference
or priority over another Holder of that Series.

SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount of (or, in the case of Original Issue Discount Securities,
the portion thereby specified in the terms of such Security), premium, if any,
and accrued and unpaid interest on the Securities held by such Holder, on or
after their Maturity, or to bring suit for the enforcement of any such payment
on or after their Maturity, shall not be impaired or affected without the
consent of such Holder.

SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified
in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor under the Securities for the whole amount then due
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

SECTION 6.09. Trustee May File Proofs of Claim. The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor under the Securities),
its creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07.

SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6 with respect to any Series of Securities, it shall pay out the
money in the following order:

First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07;

Second: to Holders for amounts due and unpaid on the Securities of
that Series for the principal amount of (or, in the case of Original Issue
Discount Securities of that Series, the portion thereby specified in the
terms of such Security), premium, if any, and accrued and unpaid interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities of that Series for the principal
amount of (or, in the case of Original Issue Discount Securities of that
Series, the portion thereby

26

specified in the terms of such Security), premium, if any, and accrued and
unpaid interest, respectively; and

Third: to the Company.

The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.

SECTION 6.11. Undertaking For Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by Holders of
more than 10% in principal amount of the then outstanding Securities of any
Series.

ARTICLE 7

TRUSTEE

SECTION 7.01. Duties of Trustee.

(a) If an Event of Default of which the Trustee has knowledge has occurred
and is continuing with respect to any Series of Securities, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

(b) Except during the continuance of an Event of Default with respect to
any Series of Securities:

(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture, with respect to the Securities of
that Series, as modified or supplemented by a Board Resolution, a
supplemental indenture or an Officers' Certificate, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may with
respect to Securities of that Series, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).

27

(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 and the Trustee shall be entitled
from time to time to request such direction.

(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.01.

(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.

(g) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent or other paper or
documents.

SECTION 7.02. Rights of Trustee.

(a) The Trustee may conclusively rely on the truth of the statements and
correctness of the opinions contained in, and shall be protected from acting or
refraining from acting upon, any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney, to the
extent reasonably required by such inquiry or investigation.

(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel

28

of the Trustee's own choosing and the written advice of such counsel or any
Opinion of Counsel shall 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.

(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.

(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers.

(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.

(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.

SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11.

SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Securities or any other document in
connection with the sale of the Securities or pursuant to this Indenture other
than its certificate of authentication.

SECTION 7.05. Notice of Defaults. If a Default or Event of Default with
respect to Securities of any Series occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to Holders of that Series a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Security pursuant to Section
6.01(a) or (b), the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders.

SECTION 7.06. Reports By Trustee to Holders. Unless otherwise specified in
the applicable Board Resolution, supplemental indenture or Officers'
Certificate, within 60 days

29

after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Securities remain outstanding, the Trustee shall
mail to the Holders of the Securities a brief report dated as of such reporting
date that complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA
Section 313(b). The Trustee shall also transmit by mail all reports as required
by TIA Section 313(c).

A copy of each report at the time of its mailing to the Holders shall be
mailed to the Company and filed with the Commission and each stock exchange on
which the Company has informed the Trustee in writing the Securities are listed
in accordance with TIA Section 313(d). The Company shall promptly notify the
Trustee in writing when the Securities are listed on any stock exchange and of
any delisting thereof.

SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. To the extent lawful, the Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.

The Company shall indemnify the Trustee 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 Indenture, including the
reasonable costs and expenses of enforcing this Indenture against the Company or
any other obligors under the Securities (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder except to the extent any
such loss, liability or expense may be attributable to its gross negligence, bad
faith or willful misconduct. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.

The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.

To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal,
premium, if any, and interest on particular Securities. Such lien shall survive
the satisfaction and discharge of this Indenture and the resignation or removal
of the Trustee. The Trustee's right to receive payment of any amounts due under
this Section 7.07 shall not be subordinate to any other Company Indebtedness.

30

When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(e) or (f) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.

SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.

The Trustee may resign in writing at any time and be discharged from the
trust hereby created with respect to the Securities of any Series by so
notifying the Company. The Holders of a majority in principal amount of the then
outstanding Securities of any Series may remove the Trustee with respect to such
Series of Securities by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a Custodian or public officer takes charge of the Trustee or its
property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities of any Series and such Holders do
not reasonably promptly appoint a successor Trustee or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.

If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of Securities of that Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

If the Trustee, after written request by any Holder of a Security who has
been a Holder of a Security for at least six months, fails to comply with
Section 7.10, such Holder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to the

31

Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided that all sums owing to the Trustee
hereunder have been paid and subject to the lien provided for in Section 7.07.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 shall continue for the benefit of the
retiring Trustee.

SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee; provided, such
corporation or association shall be otherwise eligible and qualified under this
Article 7 and shall notify the Company of its successor hereunder.

SECTION 7.10. Eligibility; Disqualification. There shall at all times be a
Trustee hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and has a combined
capital and surplus of at least $50.0 million as set forth in its most recent
published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).

SECTION 7.11. Preferential Collection of Claims Against the Company. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 8

DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01. Discharge; Option to Effect Legal Defeasance or Covenant
Defeasance.

(a) When (i) the Company delivers to the Trustee all outstanding Securities
of a Series (other than Securities replaced pursuant to Section 2.08) for
cancellation or (ii) all outstanding Securities have become due and payable at
maturity and the Company irrevocably deposits with the Trustee funds sufficient
to pay at Maturity all outstanding Securities of such Series, including interest
thereon to Maturity (other than Securities replaced pursuant to Section 2.08),
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall cease to be of further effect except as set
out in Section 8.01(c). The Trustee shall acknowledge satisfaction and discharge
of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.

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(b) Notwithstanding Section 8.01(a), the Company's obligations in Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 2.11 and the rights, powers, trusts,
duties and immunities of the Trustee, including without limitation, under
Sections 7.07, 8.05 and 8.07, and the Company's obligations in connection
therewith, shall survive until the Securities of a Series have been paid in
full. The rights of outstanding Securities to receive solely from the trust
funds described in Section 8.05 payments in respect of principal of, premium, if
any, and interest on such Securities when such payments are due shall also
survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.07 and 8.06 shall survive.

(c) The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have all
of its obligations discharged with respect to all outstanding Securities of any
Series pursuant to Section 8.02 or 8.03 and upon compliance with the conditions
set forth below in this Article 8.

SECTION 8.02. Legal Defeasance and Discharge. Upon the Company's exercise
under Section 8.01(b) of the option applicable to this Section 8.02, the Company
shall, subject to the satisfaction of the conditions set forth in Section 8.04,
be deemed to have been discharged from its obligations with respect to all
outstanding Securities of that Series on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Securities of that
Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand and at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder:

(a) the rights of Holders of outstanding Securities of that Series to
receive solely from the trust fund described in Section 8.04(a), payments in
respect of the principal of, premium, if any, and interest on such Securities of
that Series when such payments are due;

(b) the Company's obligations with respect to such Securities of that
Series under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 2.11;

(c) the rights, powers, trusts, duties and immunities of the Trustee,
including without limitation, under Sections 7.07, 8.05 and 8.07, and the
Company's obligations in connection therewith; and

(d) the provisions of this Article 8.

Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03.

SECTION 8.03. Covenant Defeasance. Upon the Company's exercise under
Section 8.01(b) of the option applicable to this Section 8.03, the Company
shall, subject to the satisfaction of the conditions set forth in Section 8.04,
be released from its obligations under the

33

covenants contained in a Board Resolution, a supplemental indenture or an
Officers' Certificate and Section 5.01 with respect to the outstanding
Securities of that Series on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Securities of that
Series shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Securities of that Series, the Company and its Subsidiaries may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01, but, except as specified above, the remainder of
this Indenture and such Securities shall be unaffected thereby. In addition,
upon the Company's exercise under Section 8.01(b) of the option applicable to
this Section 8.03, subject to the satisfaction of the conditions set forth in
Section 8.04, any event specified in Section 6.01 (other than Section 6.01(e)
and (f)) shall not constitute an Event of Default.

SECTION 8.04. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the application of either Section 8.02 or 8.03 to the
outstanding Securities:

In order to exercise either Legal Defeasance or Covenant Defeasance with
respect to any Series of Securities:

(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of that Series of Securities, (i) cash in United
States dollars, (ii) non-callable Government Securities or (iii) a combination
thereof, in such amounts as shall be sufficient, in the opinion of a nationally
recognized firm of independent public accountants to pay the principal of,
premium, if any, and interest on the outstanding Securities of such Series on
the stated maturity or on the applicable redemption date, as the case may be,
and the Company must specify whether the Securities of such Series are being
defeased to maturity or to a particular redemption date;

(b) in the case of an election under Section 8.02, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (ii) since
the date hereof, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Securities of such
Series shall not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and shall be subject to federal income tax
on the same amounts, in the same manner and at the same time as would have been
the case if such Legal Defeasance had not occurred;

(c) in the case of an election under Section 8.03, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee

34

confirming that the Holders of the outstanding Securities of such Series shall
not recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and shall be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;

(d) no Default or Event of Default with respect to that Series of
Securities shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) or insofar as Sections 6.01(e) and (f) are
concerned, at any time in the period ending on the 91st day after the date of
deposit (it being understood that this condition shall not be deemed satisfied
until the expiration of such period);

(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company is a party or by
which the Company is bound;

(f) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;

(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others; and

(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

SECTION 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06, all money and
non-callable Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 in respect of the
outstanding Securities of that Series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Securities of all sums due and to become due thereon in
respect of principal, premium, if any, and interest but such money need not be
segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Securities of that
Series.

35

Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the written request
of the Company, and be relieved of all liability with respect to, any money or
non-callable Government Securities held by it as provided in Section 8.04 which,
in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.04(a)), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.

SECTION 8.06. Repayment to the Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, and interest on any Security and
remaining unclaimed for one year after such principal, and premium, if any, or
interest, has become due and payable shall be paid to the Company on its written
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.

SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or non-callable Government Securities in
accordance with Section 8.02 or 8.03, as the case may be, by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the obligations of the Company
under this Indenture, and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03, as the case may be; provided, however,
that, if the Company makes any payment of principal of, premium, if any, or
interest on any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. Without Consent of Holders. Without the consent of any
Holder, the Company and the Trustee may amend or supplement this Indenture or
the Securities:

(a) to evidence the succession of another Person to the Company pursuant to
Article 5 and the assumption by such successor of the Company's covenants,
agreements and obligations in this Indenture and in the Securities;

36

(b) to surrender any right or power conferred upon the Company by this
Indenture, to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of all
or any Series of Securities as the Board of Directors of the Company shall
consider to be for the protection of the Holders of such Securities, and to make
the occurrence, or the occurrence and continuance, of a default in respect of
any such additional covenants, restrictions, conditions or provisions a Default
or an Event of Default under this Indenture; provided, however, that with
respect to any such additional covenant, restriction, condition or provision,
such amendment may provide for a period of grace after default, which may be
shorter or longer than that allowed in the case of other Defaults, may provide
for an immediate enforcement upon such Default, may limit the remedies available
to the Trustee upon such Default or may limit the right of Holders of a majority
in aggregate principal amount of the Securities of any Series to waive such
default;

(c) to cure any ambiguity or correct or supplement any provision contained
in this Indenture, in any supplemental indenture or in any Securities that may
be defective or inconsistent with any other provision contained therein;

(d) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee, or to make such other provisions in regard to matters or questions
arising under this Indenture as shall not adversely affect the interests of any
Holders of Securities of any Series;

(e) to modify or amend this Indenture in such a manner as to permit the
qualification of this Indenture or any supplemental indenture hereto under the
TIA as then in effect;

(f) to add or to change any of the provisions of this Indenture to provide
that Securities in bearer form may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal or premium with respect
to Securities in registered form or of principal, premium or interest with
respect to Securities in bearer form, or to permit Securities in registered form
to be exchanged for Securities in bearer form, so as to not adversely affect the
interests of the Holders or any coupons of any Series in any material respect or
permit or facilitate the issuance of Securities of any Series in uncertificated
form;

(g) in the case of subordinated Securities, to make any change in the
provisions of this Indenture or any supplemental indenture relating to
subordination that would limit or terminate the benefits available to any holder
of Senior Indebtedness (as defined in the applicable Board Resolution,
supplemental indenture hereto or Officers' Certificate related to such Series of
Subordinated Securities) under such provisions (but only if each such holder of
Senior Indebtedness under such provisions consents to such change);

(h) to add guarantees with respect to the Securities or to secure the
Securities;

(i) to make any change that does not adversely affect the rights of any
Holder;

(j) to add to, change or eliminate any of the provisions of this Indenture
with respect to one or more Series of Securities, so long as any such addition,
change or elimination not otherwise permitted under this Indenture shall (x)
neither apply to any Security of any Series

37

created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor modify the rights of the Holders of any such
Security with respect to the benefit of such provision or (y) become effective
only when there is no such Security outstanding;

(k) to conform the text of this Indenture to any provision of this
description of debt securities or any description of debt securities contained
in the prospectus supplement to the extent that such provision was intended to
be a verbatim recitation of the Indenture;

(l) to evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Securities of one or more
Series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of this Indenture
by more than one Trustee; or

(m) to establish the form or terms of Securities and coupons of any Series
pursuant to Article 2.

Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.06, the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

SECTION 9.02. With Consent of Holders of Securities. The Company and the
Trustee may amend or supplement this Indenture or the Securities of any Series
with the consent of the Holders of at least a majority in principal amount of
the Securities of such Series then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for Securities), and, subject to Sections 6.02, 6.04 and 6.07, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Securities
(except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Securities
of any Series may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities of such Series voting as a
single class (including consents obtained in connection with or a tender offer
or exchange offer for the Securities).

Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Securities as aforesaid, and upon
receipt by the Trustee of the documents described in Section 9.06, the Trustee
shall join with the Company in the execution of such amended or supplemental
Indenture unless such amended or supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may, but shall not be obligated to, enter into such amended or
supplemental indenture.

38

It shall not be necessary for the consent of the Holders of Securities
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Securities affected thereby
a notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. However, without the consent of the Holders of all of the
affected Securities, an amendment, supplement or waiver may not (with respect to
any Security of any Series held by a non-consenting Holder):

(a) reduce the principal amount of Securities whose Holders must consent to
an amendment, supplement or waiver;

(b) reduce the principal amount of or extend the Stated Maturity of any
Security, or alter the provisions with respect to the redemption of the
Securities;

(c) reduce the rate of or extend the time for payment of interest on any
Securities;

(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding and a waiver of
the payment default that resulted from such acceleration);

(e) make any Security payable in money other than that stated in the
Securities;

(f) make any change in Section 6.04 or 6.07;

(g) waive a redemption payment with respect to any Security; or

(h) make any change in the foregoing amendment and waiver provisions of
this Article 9.

SECTION 9.03. Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Securities shall comply with the TIA as then
in effect.

SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder. An amendment or waiver
becomes effective once both (i) the requisite number of consents have been
received by the Company or the Trustee and (ii) such amendment or waiver has
been executed by the Company and the Trustee.

39

The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.

SECTION 9.05. Notation on or Exchange of Securities. The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Security
thereafter authenticated. The Company in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment,
supplement or waiver.

Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06. Trustee to Sign Amendments, Etc. The Trustee shall sign any
amended or supplemental Indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment
or supplemental Indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture the Trustee shall be entitled to receive
and (subject to Section 7.01) shall be fully protected in relying upon, in
addition to the documents required by Section 10.04, an Officers' Certificate
and an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.

ARTICLE 10

NOTE GUARANTEES

SECTION 10.01. Guarantee

(a) Subject to this Article 10, the Guarantor hereby unconditionally
guarantees to each Holder of Securities issued by AREP Finance, authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Company hereunder or thereunder, that:

(1) the principal of, premium and liquidated damages, if any, and
interest on, the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and

40

(2) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, that 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.

Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantor will pay the same immediately. The
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

(b) The Guarantor hereby agrees that its obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this Indenture.

(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantor or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantor, any amount paid by either to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.

(d) The Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. The Guarantor
further agrees that, as between the Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (1) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantor for
the purpose of this Guarantee.

SECTION 10.02. Limitation on Guarantor Liability.

The Guarantor, and by its acceptance of Securities, each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and the Guarantor
hereby irrevocably agree that the obligations of such Guarantor will be limited
to the maximum

41

amount that will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of the Guarantor that are relevant under such
laws.

SECTION 10.03. Execution and Delivery of Guarantee.

To evidence its Guarantee set forth in Section 10.01 hereof, the Guarantor
hereby agrees that a notation of such Note Guarantee will be endorsed by an
Officer of the Guarantor on each Security authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of the Guarantor by
one of its Officers.

The Guarantor hereby agrees that its Guarantee set forth in Section 10.01
hereof will remain in full force and effect notwithstanding any failure to
endorse on the Securities a notation of such Guarantee.

If an Officer whose signature is on this Indenture or on the Guarantee no
longer holds that office at the time the Trustee authenticates the Securities on
which a Guarantee is endorsed, the Guarantee will be valid nevertheless.

The delivery of any Securities by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantor.

ARTICLE 11

MISCELLANEOUS

SECTION 11.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), the imposed duties shall control.

SECTION 11.02. Notices. Any notice or communication by the Company, any
Guarantor or the Trustee shall be in writing and delivered in person or mailed
by first class mail (registered or certified, return receipt requested) or by
overnight air courier guaranteeing next day delivery, as follows:

If to the Company:

AREP
American Real Estate Finance Corp.
100 South Bedford Road
Mount Kisco, New York  10549
Telecopy: (914) 242-9282
Attention: Felicia Buebel, Esq.

With a copy to:

42

DLA Piper Rudnick Gray Cary US LLP
1251 Avenue of the Americas
New York, New York  10020
Telecopy: (212) 835-6001
Attention: Steven L. Wasserman, Esq.

If to the Trustee:

Wilmington Trust Company Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Telecopier No.: (302) 636-4140
Attention: Michael G. Oller

With a copy to:

Telecopier No.: ____________
Attention: _________________

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

Any notice or communication to a Holder shall be mailed to its address
shown on the register kept by the Registrar and shall be sufficiently given if
so mailed within the time prescribed.

Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it.

If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.

SECTION 11.03. Communication by Holders of Securities with Other Holders of
Securities. Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

43

SECTION 11.04. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish, at the request of the Trustee, to the
Trustee:

(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and

(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.

SECTION 11.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

(a) statement that the Person making such certificate or opinion has read
such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(c) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and

(d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been satisfied.

SECTION 11.06. Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The
Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.

SECTION 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder of the
Company as such shall have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Securities
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities.

SECTION 11.08. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE SECURITIES 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.

44

SECTION 11.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

SECTION 11.10. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.

SECTION 11.11. Severability. In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

SECTION 11.12. Counterpart Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

SECTION 11.13. Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.

[Signatures on following page]

45

SIGNATURES

Dated as of
-------------------------

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:
---------------------------------

WILMINGTON TRUST COMPANY

By:
------------------------------------
Name: Michael G. Oller, Jr.
Title: Senior Financial Services Officer

46

EXHIBIT 4.8

AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.

Issuers

And

WILMINGTON TRUST COMPANY

Trustee

----------

INDENTURE

Dated as of _________, ______

Subordinated Debt Securities

CROSS-REFERENCE TABLE*

TRUST INDENTURE                                                    INDENTURE
ACT SECTION                                                         SECTION
---------------                                                -----------------

310(a)(1)...................................................   7.10
(a)(2)..................................................   7.10
(a)(3)..................................................   N.A.
(a)(4)..................................................   N.A.
(a)(5)..................................................   7.10
(b).....................................................   7.03; 7.10
(c).....................................................   N.A.
311(a)......................................................   7.11
(b).....................................................   7.11
(c).....................................................   N.A.
312(a)......................................................   2.06
(b).....................................................   11.03
(c).....................................................   11.03
313(a)......................................................   7.06
(b)(1)..................................................   N.A
(b)(2)..................................................   7.06; 7.07
(c).....................................................   7.06; 12.02
(d).....................................................   7.06
314(a)......................................................   4.02; 4.03; 12.02
(b).....................................................   N.A.
(c)(1)..................................................   12.04
(c)(2)..................................................   12.04
(c)(3)..................................................   N.A.
(d).....................................................   N.A.
(e).....................................................   12.06
(f).....................................................   N.A.
315(a)......................................................   7.01
(b).....................................................   7.05; 12.03
(c).....................................................   7.01
(d).....................................................   7.01
(e).....................................................   6.11
316(a)(last sentence).......................................   2.10
(a)(1)(A)...............................................   6.05
(a)(1)(B)...............................................   6.04
(a)(2)..................................................   N.A.
(b).....................................................   6.07
(c).....................................................   2.13
317(a)(1)...................................................   6.08

i

(a)(2)..................................................   6.09
(b).....................................................   2.05
318(a)......................................................   12.01
(b).....................................................   N.A.
(c).....................................................   12.01

N.A. means not applicable.

*    This Cross-Reference Table is not part of the Indenture.

ii

TABLE OF CONTENTS

Page No.
--------

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.................       1
SECTION 1.01.  Definitions........................................       1
SECTION 1.02.  Other Definitions..................................       5
SECTION 1.03.  Incorporation by Reference of Trust Indenture Act..       5
SECTION 1.04.  Rules of Construction..............................       6

ARTICLE 2 THE SECURITIES.............................................       6
SECTION 2.01.  Issuable in Series.................................       6
SECTION 2.02.  Establishment of Terms of Series of Securities.....       7
SECTION 2.03.  Execution and Authentication.......................       9
SECTION 2.04.  Registrar and Paying Agent.........................      10
SECTION 2.05.  Paying Agent to Hold Money in Trust................      11
SECTION

2.06.  Holders Lists......................................      11
SECTION 2.07.  Transfer and Exchange..............................      11
SECTION 2.08.  Mutilated, Destroyed, Lost and Stolen Securities...      12
SECTION 2.09.  Outstanding Securities.............................      13
SECTION 2.10.  Treasury Securities................................      13
SECTION 2.11.  Temporary Securities...............................      13
SECTION 2.12.  Cancellation.......................................      13
SECTION 2.13.  Defaulted Interest.................................      14
SECTION 2.14.  Global Securities..................................      14
SECTION 2.15.  CUSIP Numbers......................................      17

ARTICLE 3 REDEMPTION AND PREPAYMENT..................................      17
SECTION 3.01.  Notices to Trustee.................................      17
SECTION 3.02.  Selection of Securities to be Redeemed.............      17
SECTION 3.03.  Notice of Redemption...............................      18
SECTION 3.04.  Effect of Notice of Redemption.....................      19
SECTION 3.05.  Deposit of Redemption Price........................      19
SECTION 3.06.  Securities Redeemed in Part........................      19

ARTICLE 4 COVENANTS..................................................      19
SECTION 4.01.  Payment of Securities..............................      19
SECTION 4.02.  Reports............................................      20
SECTION 4.03.  Compliance Certificate.............................      20
SECTION 4.04.  Corporate Existence................................      20
SECTION 4.05.  Calculation of Original Issue Discount.............      21

ARTICLE 5 SUCCESSORS.................................................      21
SECTION 5.01.  Merger, Consolidation or Sale of Assets............      21

ARTICLE 6 DEFAULTS AND REMEDIES......................................      22
SECTION 6.01.  Events of Default..................................      22
SECTION 6.02.  Acceleration.......................................      23
SECTION 6.03.  Other Remedies.....................................      24
SECTION 6.04.  Waiver of Past Defaults............................      24
SECTION 6.05.  Control By Majority................................      24

iii

TABLE OF CONTENTS CONT'D

Page No.
--------

SECTION 6.06.  Limitation on Suits................................      25
SECTION 6.07.  Rights of Holders to Receive Payment...............      25
SECTION 6.08.  Collection Suit by Trustee.........................      25
SECTION 6.09.  Trustee May File Proofs of Claim...................      26
SECTION 6.10.  Priorities.........................................      26
SECTION 6.11.  Undertaking For Costs..............................      26

ARTICLE 7 TRUSTEE....................................................      27
SECTION 7.01.  Duties of Trustee..................................      27
SECTION 7.02.  Rights of Trustee..................................      28
SECTION 7.03.  Individual Rights of Trustee.......................      29
SECTION 7.04.  Trustee's Disclaimer...............................      29
SECTION 7.05.  Notice of Defaults.................................      29
SECTION 7.06.  Reports By Trustee to Holders......................      29
SECTION 7.07.  Compensation and Indemnity.........................      30
SECTION 7.08.  Replacement of Trustee.............................      30
SECTION 7.09.  Successor Trustee by Merger, Etc...................      31
SECTION 7.10.  Eligibility; Disqualification......................      32
SECTION 7.11.  Preferential Collection of Claims Against the
Company............................................      32

ARTICLE 8 DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE........      32
SECTION 8.01.  Discharge; Option to Effect Legal Defeasance or
Covenant  Defeasance...............................      32
SECTION 8.02.  Legal Defeasance and Discharge.....................      33
SECTION 8.03.  Covenant Defeasance................................      33
SECTION 8.04.  Conditions to Legal or Covenant Defeasance.........      34
SECTION 8.05.  Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions......      35
SECTION 8.06.  Repayment to the Company...........................      35
SECTION 8.07.  Reinstatement......................................      36

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER...........................      36
SECTION 9.01.  Without Consent of Holders.........................      36
SECTION 9.02.  With Consent of Holders of Securities..............      38
SECTION 9.03.  Compliance with Trust Indenture Act................      39
SECTION 9.04.  Revocation and Effect of Consents and Waivers......      39
SECTION 9.05.  Notation on or Exchange of Securities..............      40
SECTION 9.06.  Trustee to Sign Amendments, Etc....................      40

ARTICLE 10 SUBORDINATION.............................................      40
SECTION 10.01. Securities Subordinated to Senior Indebtedness.....      40
SECTION 10.02. Effectuation of Subordination by Trustee...........      43
SECTION 10.03. Knowledge of Trustee...............................      43
SECTION 10.04. Trustee's Relation to Senior Indebtedness..........      44

iv

TABLE OF CONTENTS CONT'D

Page No.
--------

SECTION 10.05. Rights of Holders of Senior Indebtedness Not
Impaired...........................................      44

ARTICLE 11 NOTE GUARANTEES...........................................      44
SECTION 11.01. Guarantee..........................................      44
SECTION 11.02. Limitation on Guarantor Liability..................      45
SECTION 11.03. Execution and Delivery of Guarantee................      46

ARTICLE 12 MISCELLANEOUS.............................................      46
SECTION 12.01. Trust Indenture Act Controls.......................      46
SECTION 12.02. Notices............................................      46
SECTION 12.03. Communication by Holders of Securities with Other
Holders of Securities..............................      47
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent..........................................      47
SECTION 12.05. Statements Required in Certificate or Opinion......      47
SECTION 12.06. Rules by Trustee, Paying Agent and Registrar.......      48
SECTION 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.........................      48
SECTION 12.08. GOVERNING LAW......................................      48
SECTION 12.09. No Adverse Interpretation of Other Agreements......      48
SECTION 12.10. Successors.........................................      48
SECTION 12.11. Severability.......................................      48
SECTION 12.12. Counterpart Originals..............................      48
SECTION 12.13. Table of Contents, Headings, Etc...................      49

v

INDENTURE dated as of [__________], [_____] between American Real Estate
Partners, L.P. a Delaware limited partnership ("AREP"), American Real Estate
Finance Corp., a Delaware corporation ("AREP Finance" and together with AREP,
the "Company"), and Wilmington Trust Company, as trustee (the "Trustee").

The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the Securities issued
under this Indenture (the "Securities"):

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

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

"Agent" means any Registrar, Paying Agent or co-registrar.

"AREP" means American Real Estate Partners, L.P. (and not any of its
subsidiaries).

"AREP Finance" means American Real Estate Finance Corp.

"Bankruptcy Law" means Title 11 of the United States Code, as amended, or
any similar federal, state or foreign law for the relief of debtors.

"Board of Directors" means, with respect to any Person, the board of
directors or comparable governing body of such Person.

"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been adopted by the Board of
Directors or pursuant to authorization by the Board of Directors and to be in
full force and effect on the date of the certificate and delivered to the
Trustee.

"Business Day" means any day other than a Legal Holiday.

"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, but excluding any debt securities convertible into such equity.

"Clearstream" means Clearstream Banking, Societe Anonyme, Luxembourg.

"Commission" or "SEC" means the Securities and Exchange Commission.

"Company" means, collectively AREP and AREP Finance, and any and all
successors thereto.

"Company Order" means a written order signed in the name of the Company by
two Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer.

"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of management and policies of a Person, whether
through the ownership of Voting Stock, by agreement or otherwise.

"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 10.02 or such other address as to which the Trustee
may give notice to the Company.

"Custodian" means the Trustee, as custodian with respect to the Securities
in global form, or any successor entity thereto.

"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

"Definitive Security" means a certificated Security registered in the name
of the Holder thereof and issued in accordance with Section 2.07.

"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.14 as the
Depositary with respect to the Securities, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

"Dollar" means a dollar or other equivalent unit in such coin or currency
of the United States as at the time shall be legal tender for the payment of
public and private debt.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, the Commission or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect from time to
time; provided, however, that all reports and other financial information
provided by the

2

Company to the Holders of the Securities, the Trustee and/or the Commission
shall be prepared in accordance with GAAP, as in effect on the date of such
report or other financial information.

"Global Security" when used with respect to any Series of Securities issued
hereunder, means a Security which is executed by the Company and authenticated
and delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture supplemental
hereto, if any, or Board Resolution and pursuant to a Company Order, which shall
be registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all the outstanding Securities of such Series or any
portion thereof, in either case having the same terms, including, without
limitation, the same original issue date, date or dates on which principal and
interest are due, and interest rate or method of determining interest and which
shall bear the legend as prescribed by Section 2.14(c).

"Global Security Legend" means the legend set forth in Section 2.14.(c),
which is required to be placed on all Global Securities issued under this
Indenture.

"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.

"Holder" means a Person in whose name a Security is registered on the
Registrar's books.

"Indebtedness" has the meaning specified in the applicable Board
Resolution, supplemental indenture or Officers' Certificate relating to a
particular Series of Securities.

"Indenture" means this Indenture, as amended or supplemented from time to
time.

"Interest Payment Date" when used with respect to any Series of Securities,
means the date specified in such Securities for the payment of any installment
of interest on those Securities.

"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.

"Maturity" when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.

"Offering" means the offering of the Securities by the Company.

3

"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.

"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, delivered to the Trustee that meets the requirements of Section
11.05.

"Opinion of Counsel" means a written opinion from legal counsel that meets
the requirements of Section 11.05. The counsel may be an employee of or counsel
to the Company, any Subsidiary of the Company or the Trustee.

"Original Issue Discount Security" means any Security that provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02.

"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to the Depositary Trust Company,
shall include Euroclear and Clearstream).

"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

"Securities" has the meaning assigned to it in the preamble to this
Indenture.

"Securities Act" means the Securities Act of 1933, as amended.

"Senior Indebtedness" means all of the Indebtedness of, or indebtedness
guaranteed by, the Company for borrowed money (including the principal of,
premium, if any, and interest on any such borrowed money and any commitment fees
for unborrowed amounts which, if borrowed, would constitute Senior
Indebtedness), whether currently outstanding or hereafter incurred, unless,
under the instrument evidencing the same or under which the same is outstanding,
it is expressly provided that such indebtedness is subordinate to other
indebtedness and obligations of the Company.

"Series" or "Series of Securities" means each series of debentures, notes
or other debt instruments of the Company created pursuant to Sections 2.01 and
2.02.

4

"Significant Subsidiary" means any Subsidiary which would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended.

"Stated Maturity" when used with respect to any Security, means the date
specified in such Security as the fixed date on which an amount equal to the
principal amount of such Security is due and payable.

"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person, (ii) such Person and one
or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person.

"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.

"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.

"Wholly Owned Subsidiary" of a Person means a subsidiary of such person all
of the outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.

SECTION 1.02. Other Definitions.

Defined in
Term                                                                    Section
----                                                                  ----------

"Covenant Defeasance"..............................................      8.03
"Event of Default".................................................      6.01
"Legal Defeasance".................................................      8.02
"notice of acceleration"...........................................      6.02
"Paying Agent".....................................................      2.04
"Registrar"........................................................      2.04
"Service Agent"....................................................      2.04
"Transfer".........................................................      5.01

SECTION 1.03. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

5

"Indenture Securities" means the Securities;

"Indenture Security Holder" means a Holder of a Security;

"Indenture to be Qualified" means this Indenture;

"Indenture Trustee" or "Institutional Trustee" means the Trustee; and

"Obligor" on the Securities means the Company and any successor obligor
upon the Securities.

All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.

SECTION 1.04. Rules of Construction.

Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;

(c) "or" is not exclusive;

(d) words in the singular include the plural, and in the plural include the
singular;

(e) provisions apply to successive events and transactions; and

(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the Commission from time to time.

ARTICLE 2

THE SECURITIES

SECTION 2.01. Issuable in Series. The aggregate principal amount of
Securities that may be authenticated and delivered under this Indenture is
unlimited. The Securities may be issued in one or more Series. All Securities of
a Series shall be identical except as may be set forth in a Board Resolution, a
supplemental indenture or an Officers' Certificate detailing the adoption of the
terms thereof pursuant to the authority granted under a Board Resolution. In the
case of Securities of a Series to be issued from time to time, the Board
Resolution, Officers' Certificate or supplemental indenture may provide for the
method by which specified terms (such as interest rate, maturity date, record
date or date from which interest shall accrue) are to be determined. Securities
may differ between Series in respect of any matters.

6

SECTION 2.02. Establishment of Terms of Series of Securities. At or prior
to the issuance of any Securities within a Series, the following shall be
established (as to the Series generally, in the case of Subsection 2.02(a) and
either as to such Securities within the Series or as to the Series generally in
the case of Subsections 2.02(b) through 2.02(y)) by a Board Resolution, a
supplemental indenture or an Officers' Certificate pursuant to authority granted
under a Board Resolution:

(a) the title of the Securities of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);

(b) any limit upon the aggregate principal amount of the Securities of the
Series that may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the Series);

(c) the date or dates on which the principal and premium, if any, of the
Securities of the Series are payable;

(d) the rate or rates (which may be fixed or variable) at which the
Securities of the Series shall bear interest, if any, or the method of
determining such rate or rates, the date or dates from which such interest, if
any, shall accrue, the Interest Payment Dates on which such interest, if any,
shall be payable or the method by which the Interest Payment Dates will be
determined, the record dates for the determination of Holders thereof to whom
interest is payable (in the case of Securities in registered form), and the
basis upon which such interest will be calculated if other than that of a
360-day year of twelve 30-day months;

(e) the currency or currencies, including composite currencies, in which
Securities of the Series shall be denominated, if other than Dollars, the place
or places, if any, in addition to or instead of the Corporate Trust Office of
the Trustee (in the case of Securities in registered form) or the principal New
York office of the Trustee (in the case of Securities in bearer form), where the
principal, premium, if any, and interest with respect to Securities of such
Series shall be payable or the method of such payment, if by wire transfer, mail
or other means;

(f) the price or prices at which, the period or periods within which, and
the terms and conditions upon which, Securities of the Series may be redeemed,
in whole or in part, at the option of the Company or otherwise;

(g) whether Securities of the Series are to be issued in registered form or
bearer form or both and, if Securities are to be issued in bearer form, whether
coupons will be attached to them, whether Securities of the Series in bearer
form may be exchanged for Securities of the Series in registered form, and the
circumstances under which and the places at which any such exchanges, if
permitted, may be made;

(h) if any Securities of the Series are to be issued in bearer form or as
one or more Global Securities representing individual Securities of the Series
in bearer form, whether certain provisions for the payment of additional
interest or tax redemptions shall apply; whether interest

7

with respect to any portion of a temporary Security of the Series in bearer form
payable with respect to any Interest Payment Date prior to the exchange of such
temporary Security in bearer form for definitive Securities of the Series in
bearer form shall be paid to any clearing organization with respect to the
portion of such temporary Security in bearer form held for its account and, in
such event, the terms and conditions (including any certification requirements)
upon which any such interest payment received by a clearing organization will be
credited to the Person entitled to interest payable on such Interest Payment
Date; and the terms upon which a temporary Security in bearer form may be
exchanged for one or more definitive Securities of the Series in bearer form;

(i) the obligation, if any, of the Company to redeem, purchase or repay the
Securities of the Series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the price or prices at which, the period
or periods within which, and the terms and conditions upon which, Securities of
the Series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligations;

(j) the terms, if any, upon which the Securities of the Series may be
convertible into or exchanged for any of the Company's common stock, preferred
stock, other securities or warrants to purchase the Company's common stock,
preferred stock or other securities and the terms and conditions upon which such
conversion or exchange shall be effected, including the initial conversion or
exchange price or rate, the conversion or exchange period and any other
additional provisions;

(k) if other than denominations of one thousand U.S. dollars ($1,000) or
any integral multiple thereof, the denominations in which the Securities of the
Series shall be issuable;

(l) if the amount of principal, premium, if any, or interest with respect
to the Securities of the Series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;

(m) if the principal amount payable at the Stated Maturity of Securities of
the Series will not be determinable as of any one or more dates prior to such
Stated Maturity, the amount that will be deemed to be such principal amount as
of any such date for any purpose, including the principal amount thereof which
will be due and payable upon any Maturity other than the Stated Maturity and
which will be deemed to be outstanding as of any such date (or, in any such
case, the manner in which such deemed principal amount is to be determined),
and, if necessary, the manner of determining the equivalent thereof in Dollars;

(n) the applicability of, if any, and any changes or additions to Article
8;

(o) if other than the principal amount thereof, the portion of the
principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02;

(p) the terms, if any, of the transfer, mortgage, pledge or assignment as
security for the Securities of the Series of any properties, assets, moneys,
proceeds, securities or other

8

collateral, including whether certain provisions of the TIA are applicable and
any corresponding changes to provisions of this Indenture as then in effect;

(q) any addition to or change in the Events of Default which applies to any
Securities of the Series and any change in the right of the Trustee or the
requisite Holders of such Series of Securities to declare the principal,
premium, if any, and interest on such Series of Securities due and payable
pursuant to Section 6.02;

(r) if the Securities of the Series shall be issued in whole or in part in
the form of a Global Security, the terms and conditions, if any, upon which such
Global Security may be exchanged in whole or in part for other individual
Definitive Securities of such Series, the Depositary for such Global Security
and the form of any legend or legends to be borne by any such Global Security in
addition to or in lieu of the Global Securities Legend;

(s) any Trustee, authenticating agent, Paying Agent, transfer agent,
Service Agent or Registrar;

(t) the applicability of, and any addition to or change in, the covenants
(and the related definitions) set forth in Articles 4 or 5 which applies to the
Securities of the Series;

(u) any additional or different subordination terms, if any, applicable to
the Securities of the Series;

(v) with regard to Securities of the Series that do not bear interest, the
dates for certain required reports to the Trustee;

(w) any United Stated Federal income tax consequences applicable to the
Securities;

(x) the terms applicable to Original Issue Discount Securities, including
the rate or rates at which original issue discount will accrue; and

(y) any other terms of Securities of the Series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 9.01, but which may modify or delete any provision of this Indenture
insofar as it applies to such Series).

All Securities of any one Series need not be issued at the same time and
may be issued from time to time, consistent with the terms of this Indenture, if
so provided by or pursuant to the Board Resolution, supplemental indenture or
Officers' Certificate referred to above, and the authorized principal amount of
any Series may not be increased to provide for issuances of additional
Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers' Certificate.

SECTION 2.03. Execution and Authentication. One Officer shall sign the
Securities for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid. A Security shall not
be valid until authenticated by the manual signature

9

of the Trustee or an authenticating agent. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.

The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture or Officers' Certificate, upon receipt by the
Trustee of a Company Order. Such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which oral instructions shall be promptly
confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, supplemental
indenture or Officers' Certificate.

The aggregate principal amount of Securities of any Series outstanding at
any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture or Officers'
Certificate delivered pursuant to Section 2.02, except as provided in Section
2.08.

Prior to the issuance of Securities of any Series, the Trustee shall have
received and (subject to Section 7.02) shall be fully protected in relying on:
(a) the Board Resolution, supplemental indenture or Officers' Certificate
establishing the form of the Securities of that Series or of Securities within
that Series and the terms of the Securities of that Series or Securities within
that Series; (b) an Officers' Certificate complying with Section 11.05; and (c)
an Opinion of Counsel complying with Section 11.05.

The Trustee shall have the right to decline to authenticate and deliver any
Securities of such Series: (a) if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken; or (b) if the Trustee in
good faith by its board of directors or trustees, executive committee or a trust
committee of directors and/or vice-presidents shall determine that such action
would expose the Trustee to personal liability to Holders of any then
outstanding Series of Securities.

The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.

SECTION 2.04. Registrar and Paying Agent. The Company shall maintain, with
respect to each Series of Securities, at the place or places specified with
respect to such Series pursuant to Section 2.02, an office or agency where
Securities of such Series may be presented or surrendered for payment ("Paying
Agent"), where Securities of such Series may be presented for registration of
transfer or for exchange ("Registrar") and where notices and demands to or upon
the Company in respect of the Securities of such Series and this Indenture may
be served ("Service Agent"). The Registrar shall keep a register with respect to
each Series of Securities and to their transfer and exchange. The Company will
give prompt written notice to the Trustee of the name and address, and any
change in the name and address, of each Registrar, Paying Agent or Service
Agent. If at any time the Company shall fail to maintain any such required

10

Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee
with the name and address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more co-registrars,
additional paying agents or additional services agents and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligations to
maintain a Registrar, Paying Agent and Service Agent in each place so specified
pursuant to Section 2.02 for Securities of any Series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the name or address of any such co-registrar,
additional paying agent or additional service agent. The term "Registrar"
includes any co-registrar, the term "Paying Agent" includes any additional
paying agent; and the term "Service Agent" includes any additional service
agent.

The Company hereby appoints the Trustee as the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time the
Securities of that Series are first issued.

SECTION 2.05. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent, other than the Trustee, to agree in writing that the
Paying Agent will hold in trust, for the benefit of Holders of any Series of
Securities, or the Trustee, all money held by the Paying Agent for the payment
of principal of or interest on the Series of Securities, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
of any Series of Securities all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Securities.

SECTION 2.06. Holders Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders of each Series of Securities and shall
otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least seven Business Days before
each Interest Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of each Series of Securities
and the Company shall otherwise comply with TIA Section 312(a).

SECTION 2.07. Transfer and Exchange. When Securities of a Series are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal principal amount of Securities of the
same Series, the Registrar shall register the transfer or

11

make the exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.11, 3.06, or 9.05).

Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing or (b)
to register the transfer or exchange of any Security of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.

SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same Series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding. If there shall be delivered to the Company
and the Trustee (i) evidence to their satisfaction of the destruction, loss or
theft of any Security and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and make available for delivery, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same
Series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expense of the Trustee) connected therewith.

Every new Security of any Series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the Series duly issued hereunder.

12

The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

SECTION 2.09. Outstanding Securities. The Securities outstanding at any
time are all the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, those reductions in the
interest in a Global Security effected by the Trustee in accordance with the
provisions hereof, and those described in this Section 2.09 as not outstanding.
A Security does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Security.

If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on the Maturity of Securities of a Series money
sufficient to pay such Securities of the Series payable on that date, then on
and after that date such Securities of the Series shall be deemed to be no
longer outstanding and shall cease to accrue interest.

In determining whether the Holders of the requisite principal amount of
outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the principal amount of an Original Issue
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.02.

SECTION 2.10. Treasury Securities. In determining whether the Holders of
the required principal amount of Securities of a Series have concurred in any
request, demand, authorization, notice, direction, waiver or consent, Securities
of a Series owned by the Company or an Affiliate shall be disregarded, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such request, demand, authorization, notice, direction, waiver or
consent, only Securities of a Series that the Trustee knows are so owned shall
be disregarded.

SECTION 2.11. Temporary Securities. Until Definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities upon a Company Order. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary Securities shall be entitled to the
same rights under this Indenture as the Definitive Securities.

SECTION 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and Paying Agent shall forward to
the Trustee any

13

Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Securities (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Securities shall be
delivered to the Company. The Company may not issue new Securities to replace
Securities that it has paid or that have been delivered to the Trustee for
cancellation.

SECTION 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on a Series of Securities, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, any interest payable on the defaulted
interest, to the Persons who are Holders of the Series on a subsequent special
record date. The Company shall fix each such special record date and payment
date. At least 15 days before the special record date, the Company (or upon the
written request of the Company, the Trustee, in the name and at the expense of
the Company) shall mail or cause to be mailed to Holders of the Series a notice
that states the special record date, the related payment date and the amount of
such interest to be paid. The Company may pay defaulted interest in any other
lawful manner.

SECTION 2.14. Global Securities.

(a) Terms of Securities. A Board Resolution, a supplemental indenture
hereto or an Officers' Certificate shall establish whether the Securities of a
Series shall be issued in whole or in part in the form of one or more Global
Securities and the Depositary for such Global Security or Securities.

(b) Transfer and Exchange. Notwithstanding any provisions to the contrary
contained in Section 2.07 and in addition thereto, any Global Security shall be
exchangeable pursuant to Section 2.07 for Securities registered in the names of
Holders other than the Depositary for such Security or its nominee only if:

(i) such Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time
such Depositary ceases to be a clearing agency registered under the
Exchange Act, and in either case, the Company fails to appoint a successor
Depositary within 90 days of such event;

(ii) the Company executes and delivers to the Trustee an Officers'
Certificate to the effect that such Global Security shall be so
exchangeable; or

(iii) an Event of Default with respect to the Securities represented
by such Global Security shall have happened and be continuing. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names as the Depository
shall direct in writing in an aggregate principal amount equal to the
principal amount of the Global Security with like tenor and terms.

Except as provided in this Section 2.14(b), a Global Security may not be
transferred except as a whole by the Depositary with respect to such Global
Security to a nominee of such

14

Depositary, by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such a successor Depositary.

(c) Legend. Any Global Security issued hereunder shall bear a legend in
substantially the following form:

"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) 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 (I) THIS GLOBAL
SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.07 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE DELIVERED TO
THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE
AND (III) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE
PARTNERS, L.P."

(d) Acts of Holders.

(i) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and the Company, if made in the manner provided in
this Section.

(ii) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such officer
the execution thereof. Where such execution is by a signer acting in a
capacity other than such signer's individual capacity, such certificate or
affidavit shall also constitute sufficient proof of such signer's
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.

15

(iii) The ownership of bearer securities may be proved by the
production of such bearer securities or by a certificate executed by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that
at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the bearer securities therein described; or
such facts may be proved by the certificate or affidavit of the Person
holding such bearer securities, if such certificate or affidavit is deemed
by the Trustee to be satisfactory. The Trustee and the Company may assume
that such ownership of any bearer security continues until (A) another such
certificate or affidavit bearing a later date issued in respect of the same
bearer security is produced, (B) such bearer security is produced to the
Trustee by some other Person, (C) such bearer security is surrendered in
exchange for a registered security or (D) such bearer security is no longer
outstanding. The ownership of bearer securities may also be proved in any
other manner which the Trustee deems sufficient.

(iv) The ownership of registered securities shall be proved by the
register maintained by the Registrar.

(v) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.

(vi) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so if such a
record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than six months after the record date.

(e) Payments. Notwithstanding the other provisions of this Indenture,
unless otherwise specified as contemplated by Section 2.02, payment of the
principal of and interest, if any, on any Global Security shall be made to the
Holder thereof.

16

(f) Consents, Declaration and Directions. Except as provided in Section
2.14(e), the Company, the Trustee and any Agent shall treat a person as the
Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.

SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
elements of identification printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any change in CUSIP Numbers.

ARTICLE 3

REDEMPTION AND PREPAYMENT

SECTION 3.01. Notices to Trustee. The Company may, with respect to any
Series of Securities, reserve the right to redeem and pay the Series of
Securities or may covenant to redeem and pay the Series of Securities or any
part thereof prior to the Stated Maturity thereof at such time and on such terms
as provided for in such Series of Securities. If a Series of Securities is
redeemable and the Company wants or is obligated to redeem prior to the Stated
Maturity thereof all or part of the Series of Securities pursuant to the terms
of such Securities, it shall notify the Trustee of the redemption date and the
principal amount of Securities of the Series to be redeemed and the redemption
price. The Company shall give such notice to the Trustee at least 30 but no more
than 60 days before the redemption date (or such shorter notice as may be
acceptable to the Trustee).

SECTION 3.02. Selection of Securities to be Redeemed. Unless otherwise
indicated for a particular Series by a Board Resolution, supplemental indenture
or an Officers' Certificate, if less than all of the Securities are to be
redeemed or purchased in an offer to purchase at any time, the Trustee shall
select the Securities to be redeemed or purchased as follows: (a) if the
Securities are listed on any national securities exchange, in compliance with
the requirements of the principal national securities exchange, if any, on which
the Securities are listed; or (b) if the Securities are not listed on a national
securities exchange, on a pro rata basis, by lot or in accordance with any other
method as the Trustee considers fair and appropriate. No Securities of $1,000
principal amount or less will be redeemed in part. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The
Trustee shall make the selection at least 25 but not more than 60 days before
the redemption date from outstanding Securities of a Series previously called
for redemption.

17

If any Security is to be redeemed in part only, the notice of redemption
that relates to such Security shall state the portion of the principal amount of
that Security to be redeemed. A new Security in principal amount equal to the
unredeemed portion of the original Security presented for redemption will be
issued in the name of the Holder thereof upon cancellation of the original
Security. Securities called for redemption become due on the date fixed for
redemption. On and after the redemption date, interest ceases to accrue or
accrete on Securities or portions of them called for redemption.

SECTION 3.03. Notice of Redemption. Unless otherwise provided for a
particular Series of Securities by a Board Resolution, a supplemental indenture
or an Officers' Certificate, at least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Securities are to be redeemed
at its registered address.

The notice shall identify the Securities to be redeemed and shall state:

(a) the redemption date;

(b) the Redemption Price (as defined in the Indenture for the Series of
Securities);

(c) if any Security is being redeemed in part, the portion of the principal
amount of such Security to be redeemed and that, after the redemption date upon
surrender of such Security, a new Security or Securities in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Security;

(d) the name and address of the Paying Agent;

(e) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;

(f) that, unless the Company defaults in making such redemption payment or
the Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest on the Securities called for redemption ceases to
accrue on and after the redemption date;

(g) the paragraph of the Securities and/or provision of this Indenture or
any supplemental indenture or Board Resolution pursuant to which the Securities
called for redemption are being redeemed;

(h) the CUSIP number, if any, printed on the Securities being redeemed; and

(i) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Securities.

At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date (or such shorter period as shall be acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such notice

18

and setting forth the information to be stated in such notice as provided in the
preceding paragraph.

SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is
mailed in accordance with Section 3.03, Securities called for redemption become
irrevocably due and payable on the redemption date at the redemption price, plus
accrued and unpaid interest to such date. A notice of redemption may not be
conditional. Failure to give notice or any defect in the notice to the Holder of
any Security shall not affect the validity of the notice to any other Holder.

SECTION 3.05. Deposit of Redemption Price. On or before 12:00 p.m. (New
York City time) on the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent (or if the Company or any Subsidiary is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price, of and accrued interest on, all Securities to be redeemed on
that date, other than Securities or portions of Securities called for redemption
that have been delivered to the Trustee for cancellation. The Trustee or the
Paying Agent shall as promptly as practicable return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Securities to be redeemed. If such money is then held by the Company or a
Subsidiary in trust and is not required for such purpose, it shall be discharged
from such trust.

If the Company complies with the provisions of the preceding paragraph, on
and after the redemption, interest shall cease to accrue on the Securities
called for redemption. If a Security is redeemed on or after an interest record
date but on or prior to the related Interest Payment Date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Security was
registered at the close of business on such record date. If any Security called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal from the redemption date until such principal is
paid, and to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate provided in the Securities.

SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and, upon the Company's
written request, the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.

ARTICLE 4

COVENANTS

SECTION 4.01. Payment of Securities. The Company covenants and agrees for
the benefit of the Holders of each Series of Securities that it will duly and
punctually make all payments in respect of each Series of Securities on the
dates and in the manner provided in such Series of Securities and this
Indenture. Such payments shall be considered made on the date the Trustee or the
Paying Agent, if other than the Company or a Subsidiary thereof, holds, in

19

accordance with this Indenture, funds sufficient to make all payments with
respect to such Securities then due and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Holders on that
date pursuant to the terms of this Indenture.

SECTION 4.02. Reports. Unless otherwise indicated in a Board Resolution, a
supplemental indenture or an Officers' Certificate, whether or not required by
the rules and regulations of the Commission so long as any Securities are
outstanding, the Company shall furnish to the Trustee and the Holders of the
Securities the following:

(a) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants;

(b) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports; and

(c) any other information, reports and documents that the Company is
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act.

in each case, within the time periods specified in the Commission's rules and
regulations; provided that such information and reports need not be furnished to
the Holders if they are generally available on the Internet free of charge.

In addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability within the time periods specified in
the Commission's rules and regulations (unless the Commission shall not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request.

SECTION 4.03. Compliance Certificate

(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each of the Company and any other
obligors has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge each entity has fulfilled
all of its obligations under this Indenture throughout such year and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and the nature and status thereof).

(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to

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Section 4.02(a) above shall be accompanied by a written statement of the
Company's independent public accountants (who shall be a firm of established
national reputation, reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements, nothing
has come to their attention that would lead them to believe that a Default or an
Event of Default has occurred and is continuing or, if any such Default or Event
of Default has occurred and is continuing, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such Default or Event of Default. In the event that such written statement of
the Company's independent public accountants cannot be obtained, the Company
shall deliver an Officers' Certificate certifying that it has used its best
efforts to obtain such statements and was unable to do so.

(c) The Company shall, so long as any of the Series of Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default that is then continuing, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.

SECTION 4.04. Corporate Existence. Subject to Article 5, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect:

(a) its corporate, partnership or other existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary; and

(b) the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Securities.

SECTION 4.05. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Securities as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.

ARTICLE 5

SUCCESSORS

SECTION 5.01. Merger, Consolidation or Sale of Assets. Unless otherwise
provided for in a particular Series by a Board Resolution, a supplemental
indenture or an Officers' Certificate, the Company shall not consolidate with or
merge into (whether or not the Company is the surviving entity), or sell,
assign, transfer, lease, convey or otherwise dispose of

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(collectively, "Transfer") all or substantially all of its properties or assets
to, another Person unless:

(a) the resulting, surviving or transferee Person (the "Successor Company")
shall be a corporation, limited liability company or limited partnership
organized or existing under the laws of the United States, any state thereof or
the District of Columbia;

(b) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such Transfer has been made
assumes all the obligations of the Company under the Securities and this
Indenture pursuant to a supplemental indenture or amendment, in a form
reasonably satisfactory to the Trustee;

(c) immediately after such transaction, no Default exists; and

(d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or Transfer complies with this Indenture.

The Successor Company shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture (as modified
by a Board Resolution, supplemental indenture or Officers' Certificate), and the
predecessor Company, except in the case of a lease of all or substantially all
of its assets, shall be released from the obligation to pay the principal of and
interest on the Securities. The foregoing will not prohibit a consolidation or
merger between the Company and a Wholly Owned Subsidiary, the transfer of all or
substantially all of the properties or assets of the Company to a Wholly Owned
Subsidiary or the transfer of all or substantially all of the properties or
assets of a Wholly Owned Subsidiary to the Company; provided, that if the
Company is not the surviving entity of such transaction or the Person to which
such transfer is made, the surviving entity or the Person to which such transfer
is made shall comply with clause (b) of this paragraph.

ARTICLE 6

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default. Unless otherwise indicated for a
particular Series of Securities by a Board Resolution, a supplemental indenture
or an Officers' Certificate, each of the following constitutes an "Event of
Default" with respect to each Series of Securities:

(a) default for 30 days in the payment of interest when due with respect to
the Securities;

(b) default in payment when due of principal or premium, if any, on the
Securities at maturity, upon redemption or otherwise;

(c) failure by the Company for 30 days after receipt of notice (as
specified below) to comply with the provisions described under Section 2.04,
4.02, 4.03 or 5.01;

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(d) failure by the Company for 60 days after notice (as specified below) to
comply with its other agreements in this Indenture or the Securities;

(e) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:

(i) commences a voluntary case;

(ii) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor;

(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property; or

(iv) makes a general assignment for the benefit of its creditors;

(f) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(i) is for relief against the Company or any Significant Subsidiary in
an involuntary case in which it is the debtor;

(ii) appoints a custodian of the Company or for all or substantially
all of the property of the Company or any Significant Subsidiary; or

(iii) orders the liquidation of the Company or any Significant
Subsidiary;

and the order or decree contemplated in clause (i), (ii) or (iii) remains
unstayed and in effect for 60 consecutive days;

A Default under paragraph (c) or (d) of this Section 6.01 is not an Event
of Default until the Trustee or the Holders of at least 25% in principal amount
of the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".

To the extent that the last day of the period referred to in paragraph (a),
(c), (d), (e) or (f) of this Section 6.01 is not a Business Day, then the first
Business Day following such day shall be deemed to be the last day of the period
referred to in such clauses. Any "day" will be deemed to end as of 11:59 p.m.,
New York City time.

SECTION 6.02. Acceleration. If an Event of Default with respect to any
Series of Securities at the time outstanding (other than an Event of Default
with respect to the Company specified in paragraph (e) and (f) of Section 6.01)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Securities of that Series may declare
the unpaid principal of, (or, in the case of Original Issue Discount Securities
of that Series, the portion thereby specified in the terms of such Security)
premium, if any, and accrued

23

and unpaid interest on all the Securities of that Series to be due and payable
by notice in writing to the Company (and the Trustee, if given by the Holders)
specifying the respective Event of Default and that it is a "notice of
acceleration". Upon such a declaration, such amounts shall be due and payable
immediately. If an Event of Default with respect to the Company specified in
paragraph (e) or (f) of Section 6.01 occurs, the principal amount of (or, in the
case of Original Issue Discount Securities of that Series, the portion thereby
specified in the terms of such Security), premium, if any, and accrued and
unpaid interest on all the Securities of each Series of Security shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder. The Holders of a majority in
principal amount of the then outstanding Securities of any Series of Securities
by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived with respect to
such Series of Securities (except nonpayment of the principal amount of (or, in
the case of Original Issue Discount Securities of that Series, the portion
thereby specified in the terms of such Security), premium, if any, and accrued
and unpaid interest on all the Securities of that Series that has become due
solely because of the acceleration).

SECTION 6.03. Other Remedies. If an Event of Default with respect to any
Series of Securities occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the principal amount of (or, in the
case of Original Issue Discount Securities of that Series, the portion thereby
specified in the terms of such Security), premium, if any, and accrued and
unpaid interest on all the Securities of that Series or to enforce the
performance of any provision of the Securities of that Series or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of
the Securities of a Series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default with respect to any Series of Securities shall
not impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.

SECTION 6.04. Waiver of Past Defaults. Holders of at least a majority in
principal amount of the Securities of any Series (including consents obtained in
connection with a tender offer or exchange for Securities) by notice to the
Trustee may on behalf of the Holders of all of Securities of that Series waive
an existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal amount of
(or, in the case of Original Issue Discount Securities of that Series, the
portion thereby specified in the terms of such Security), premium, if any, and
accrued and unpaid interest on all the Securities of that Series. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.

SECTION 6.05. Control By Majority. Holders of a majority in principal
amount of the then outstanding Securities of any Series may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any

24

trust or power conferred on it with respect to that Series. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines may be prejudicial to the
rights of any other Holder of Securities of that Series or that may involve the
Trustee in personal liability.

SECTION 6.06. Limitation on Suits. Except to enforce the right to receive
payment of the principal amount of (or, in the case of Original Issue Discount
Securities, the portion thereby specified in the terms of such Security),
premium, if any, and accrued and unpaid interest on a Security of Series when
due, no Holder of a Security of that Series may pursue any remedy with respect
to this Indenture or the Securities of that Series unless:

(a) the Holder previously gave to the Trustee written notice of a
continuing Event of Default;

(b) the Holders of at least 25% in principal amount of the then outstanding
Securities of that Series make a written request to the Trustee to pursue the
remedy;

(c) such Holder or Holders of that Series offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;

(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and

(e) during such 60-day period the Holders of a majority in principal amount
of the outstanding Securities of that Series do not give the Trustee a direction
inconsistent with the request.

A Holder of Securities of any Series may not use this Indenture to
prejudice the rights of another Holder of that Series or to obtain a preference
or priority over another Holder of that Series.

SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount of (or, in the case of Original Issue Discount Securities,
the portion thereby specified in the terms of such Security), premium, if any,
and accrued and unpaid interest on the Securities held by such Holder, on or
after their Maturity, or to bring suit for the enforcement of any such payment
on or after their Maturity, shall not be impaired or affected without the
consent of such Holder.

SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee
is authorized to recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor under the Securities for the
whole amount then due and, to the extent lawful, interest and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

25

SECTION 6.09. Trustee May File Proofs of Claim. The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor under the Securities),
its creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07.

SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6 with respect to any Series of Securities, it shall pay out the
money in the following order:

FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.07;

SECOND: to the payment of all Senior Indebtedness if and to the
extent required by Article 10 of this Indenture or other subordination
provisions applicable with respect to a Series of Securities;

THIRD: to Holders for amounts due and unpaid on the Securities of
that Series for the principal amount of (or, in the case of Original
Issue Discount Securities of that Series, the portion thereby
specified in the terms of such Security), premium, if any, and accrued
and unpaid interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities of
that Series for the principal amount of (or, in the case of Original
Issue Discount Securities of that Series, the portion thereby
specified in the terms of such Security), premium, if any, and accrued
and unpaid interest, respectively; and

FOURTH: to the Company.

The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.

SECTION 6.11. Undertaking For Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to

26

Section 6.07, or a suit by Holders of more than 10% in principal amount of the
then outstanding Securities of any Series.

ARTICLE 7

TRUSTEE

SECTION 7.01. Duties of Trustee.

(a) If an Event of Default of which the Trustee has knowledge has occurred
and is continuing with respect to any Series of Securities, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

(b) Except during the continuance of an Event of Default with respect to
any Series of Securities:

(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture, with respect to the Securities of
that Series, as modified or supplemented by a Board Resolution, a
supplemental indenture or an Officers' Certificate, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may with
respect to Securities of that Series, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 and the Trustee shall be entitled
from time to time to request such direction.

27

(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.01.

(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.

(g) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent or other paper or
documents.

SECTION 7.02. Rights of Trustee.

(a) The Trustee may conclusively rely on the truth of the statements and
correctness of the opinions contained in, and shall be protected from acting or
refraining from acting upon, any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney, to the
extent reasonably required by such inquiry or investigation.

(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel of the Trustee's own
choosing and the written advice of such counsel or any Opinion of Counsel shall
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.

(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.

(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers.

(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.

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(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.

SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11.

SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Securities or any other document in
connection with the sale of the Securities or pursuant to this Indenture other
than its certificate of authentication.

SECTION 7.05. Notice of Defaults. If a Default or Event of Default with
respect to Securities of any Series occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to Holders of that Series a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Security pursuant to Section
6.01(a) or (b), the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders.

SECTION 7.06. Reports By Trustee to Holders. Unless otherwise specified in
the applicable Board Resolution, supplemental indenture or Officers'
Certificate, within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Securities remain
outstanding, the Trustee shall mail to the Holders of the Securities a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA Section 313(b). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).

A copy of each report at the time of its mailing to the Holders shall be
mailed to the Company and filed with the Commission and each stock exchange on
which the Company has informed the Trustee in writing the Securities are listed
in accordance with TIA Section 313(d). The Company shall promptly notify the
Trustee in writing when the Securities are listed on any stock exchange and of
any delisting thereof.

29

SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. To the extent lawful, the Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.

The Company shall indemnify the Trustee 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 Indenture, including the
reasonable costs and expenses of enforcing this Indenture against the Company or
any other obligors under the Securities (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder except to the extent any
such loss, liability or expense may be attributable to its gross negligence, bad
faith or willful misconduct. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.

The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture. The obligations of the Company
under this Section 7.07 shall not be subordinated to the payment of Senior
Indebtedness.

To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal,
premium, if any, and interest on particular Securities. Such lien shall survive
the satisfaction and discharge of this Indenture and the resignation or removal
of the Trustee. The Trustee's right to receive payment of any amounts due under
this Section 7.07 shall not be subordinate to any other Company Indebtedness.

When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(e) or (f) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.

SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.

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The Trustee may resign in writing at any time and be discharged from the
trust hereby created with respect to the Securities of any Series by so
notifying the Company. The Holders of a majority in principal amount of the then
outstanding Securities of any Series may remove the Trustee with respect to such
Series of Securities by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a Custodian or public officer takes charge of the Trustee or its
property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities of any Series and such Holders do
not reasonably promptly appoint a successor Trustee or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.

If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of Securities of that Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

If the Trustee, after written request by any Holder of a Security who has
been a Holder of a Security for at least six months, fails to comply with
Section 7.10, such Holder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to the
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided that all sums owing to the Trustee
hereunder have been paid and subject to the lien provided for in Section 7.07.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 shall continue for the benefit of the
retiring Trustee.

SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee; provided, such
corporation or association shall be otherwise eligible and qualified under this
Article 7 and shall notify the Company of its successor hereunder.

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SECTION 7.10. Eligibility; Disqualification. There shall at all times be a
Trustee hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and has a combined
capital and surplus of at least $50.0 million as set forth in its most recent
published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).

SECTION 7.11. Preferential Collection of Claims Against the Company. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 8

DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01. Discharge; Option to Effect Legal Defeasance or Covenant
Defeasance.

(a) When (i) the Company delivers to the Trustee all outstanding Securities
of a Series (other than Securities replaced pursuant to Section 2.08) for
cancellation or (ii) all outstanding Securities have become due and payable at
maturity and the Company irrevocably deposits with the Trustee funds sufficient
to pay at Maturity all outstanding Securities of such Series, including interest
thereon to Maturity (other than Securities replaced pursuant to Section 2.08),
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall cease to be of further effect except as set
out in Section 8.01(c). The Trustee shall acknowledge satisfaction and discharge
of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.

(b) The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have all
of its obligations discharged with respect to all outstanding Securities of any
Series pursuant to Section 8.02 or 8.03 and upon compliance with the conditions
set forth below in this Article 8.

(c) Notwithstanding Section 8.01(a), the Company's obligations in Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 2.11 and the rights, powers, trusts,
duties and immunities of the Trustee, including without limitation, under
Sections 7.07, 8.05 and 8.07, and the Company's obligations in connection
therewith, shall survive until the Securities of a Series have been paid in
full. The rights of outstanding Securities to receive solely from the trust
funds described in Section 8.05 payments in respect of principal of, premium, if
any, and interest on such Securities when such payments are due shall also
survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.07 and 8.06 shall survive.

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SECTION 8.02. Legal Defeasance and Discharge. Upon the Company's exercise
under Section 8.01(b) of the option applicable to this Section 8.02, the Company
shall, subject to the satisfaction of the conditions set forth in Section 8.04,
be deemed to have been discharged from its obligations with respect to all
outstanding Securities of that Series on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Securities of that
Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder:

(a) the rights of Holders of outstanding Securities of that Series to
receive solely from the trust fund described in Section 8.04(a), payments in
respect of the principal of, premium, if any, and interest on such Securities of
that Series when such payments are due;

(b) the Company's obligations with respect to such Securities of that
Series under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 2.11;

(c) the rights, powers, trusts, duties and immunities of the Trustee,
including without limitation, under Sections 7.07, 8.05 and 8.07, and the
Company's obligations in connection therewith; and

(d) the provisions of this Article 8;

Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03.

SECTION 8.03. Covenant Defeasance. Upon the Company's exercise under
Section 8.01(b) of the option applicable to this Section 8.03, the Company
shall, subject to the satisfaction of the conditions set forth in Section 8.04,
be released from its obligations under the covenants contained in a Board
Resolution, a supplemental indenture or an Officers' Certificate and Section
5.01 with respect to the outstanding Securities of that Series on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of that Series shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Securities of that Series, the
Company and its Subsidiaries may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01, but,
except as specified above, the remainder of this Indenture and

33

such Securities shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.01(a) of the option applicable to this Section 8.03,
subject to the satisfaction of the conditions set forth in Section 8.04, any
event specified in Section 6.01 (other than Section 6.01(e) and (f)) shall not
constitute an Event of Default.

SECTION 8.04. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the application of either Section 8.02 or 8.03 to the
outstanding Securities:

In order to exercise either Legal Defeasance or Covenant Defeasance with
respect to any Series of Securities:

(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of that Series of Securities, (i) cash in United
States dollars, (ii) non-callable Government Securities or (iii) a combination
thereof, in such amounts as shall be sufficient, in the opinion of a nationally
recognized firm of independent public accountants to pay the principal of,
premium, if any, and interest on the outstanding Securities of such Series on
the stated maturity or on the applicable redemption date, as the case may be,
and the Company must specify whether the Securities of such Series are being
defeased to maturity or to a particular redemption date;

(b) in the case of an election under Section 8.02, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (ii) since
the date hereof, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Securities of such
Series shall not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and shall be subject to federal income tax
on the same amounts, in the same manner and at the same time as would have been
the case if such Legal Defeasance had not occurred;

(c) in the case of an election under Section 8.03, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of the outstanding
Securities of such Series shall not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and shall be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;

(d) no Default or Event of Default with respect to that Series of
Securities shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) or insofar as Sections 6.01(e) and (f) are
concerned, at any time in the period ending on the 91st day after the date of
deposit (it being understood that this condition shall not be deemed satisfied
until the expiration of such period);

34

(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company is a party or by
which the Company is bound;

(f) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;

(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others; and

(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

SECTION 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06, all money and
non-callable Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 in respect of the
outstanding Securities of that Series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Securities of all sums due and to become due thereon in
respect of principal, premium, if any, and interest but such money need not be
segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Securities of that
Series.

Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the written request
of the Company, and be relieved of all liability with respect to, any money or
non-callable Government Securities held by it as provided in Section 8.04 which,
in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.04(a)), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.

SECTION 8.06. Repayment to the Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the

35

principal of, premium, if any, and interest on any Security and remaining
unclaimed for one year after such principal, and premium, if any, or interest,
has become due and payable shall be paid to the Company on its written request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.

SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or non-callable Government Securities in
accordance with Section 8.02 or 8.03, as the case may be, by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the obligations of the Company
under this Indenture, and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03, as the case may be; provided, however,
that, if the Company makes any payment of principal of, premium, if any, or
interest on any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. Without Consent of Holders. Without the consent of any
Holder, the Company and the Trustee may amend or supplement this Indenture or
the Securities:

(a) to evidence the succession of another Person to the Company pursuant to
Article 5 and the assumption by such successor of the Company's covenants,
agreements and obligations in this Indenture and in the Securities;

(b) to surrender any right or power conferred upon the Company by this
Indenture, to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of all
or any Series of Securities as the Board of Directors of the Company shall
consider to be for the protection of the Holders of such Securities, and to make
the occurrence, or the occurrence and continuance, of a default in respect of
any such additional covenants, restrictions, conditions or provisions a Default
or an Event of Default under this Indenture; provided, however, that with
respect to any such additional covenant, restriction, condition or provision,
such amendment may provide for a period of grace after default, which may be
shorter or longer than that allowed in the case of other Defaults, may provide
for an immediate enforcement upon such Default, may limit the remedies available
to

36

the Trustee upon such Default or may limit the right of Holders of a majority in
aggregate principal amount of the Securities of any Series to waive such
default;

(c) to cure any ambiguity or correct or supplement any provision contained
in this Indenture, in any supplemental indenture or in any Securities that may
be defective or inconsistent with any other provision contained therein;

(d) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee, or to make such other provisions in regard to matters or questions
arising under this Indenture as shall not adversely affect the interests of any
Holders of Securities of any Series;

(e) to modify or amend this Indenture in such a manner as to permit the
qualification of this Indenture or any supplemental indenture hereto under the
TIA as then in effect;

(f) to add or to change any of the provisions of this Indenture to provide
that Securities in bearer form may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal or premium with respect
to Securities in registered form or of principal, premium or interest with
respect to Securities in bearer form, or to permit Securities in registered form
to be exchanged for Securities in bearer form, so as to not adversely affect the
interests of the Holders or any coupons of any Series in any material respect or
permit or facilitate the issuance of Securities of any Series in uncertificated
form;

(g) to make any change in the provisions of this Indenture or any
supplemental indenture relating to subordination that would limit or terminate
the benefits available to any holder of Senior Indebtedness (as defined in the
applicable Board Resolution, supplemental indenture hereto or Officers'
Certificate related to such Series of Subordinated Securities) under such
provisions (but only if each such holder of Senior Indebtedness under such
provisions consents to such change);

(h) to add guarantees with respect to the Securities or to secure the
Securities;

(i) to make any change that does not adversely affect the rights of any
Holder;

(j) to add to, change or eliminate any of the provisions of this Indenture
with respect to one or more Series of Securities, so long as any such addition,
change or elimination not otherwise permitted under this Indenture shall (x)
neither apply to any Security of any Series created prior to the execution of
such supplemental indenture and entitled to the benefit of such provision nor
modify the rights of the Holders of any such Security with respect to the
benefit of such provision or (y) become effective only when there is no such
Security outstanding;

(k) to conform the text of this Indenture to any provision of this
description of debt securities or any description of debt securities contained
in the prospectus supplement to the extent that such provision was intended to
be a verbatim recitation of the Indenture;

(l) to evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Securities of one or more
Series and to add to or change any

37

of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of this Indenture by more than one Trustee; or

(m) to establish the form or terms of Securities and coupons of any Series
pursuant to Article 2.

Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.06, the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

SECTION 9.02. With Consent of Holders of Securities. The Company and the
Trustee may amend or supplement this Indenture or the Securities of any Series
with the consent of the Holders of at least a majority in principal amount of
the Securities of such Series then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for Securities), and, subject to Sections 6.02, 6.04 and 6.07, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Securities
(except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Securities
of any Series may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities of such Series voting as a
single class (including consents obtained in connection with or a tender offer
or exchange offer for the Securities).

Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Securities as aforesaid, and upon
receipt by the Trustee of the documents described in Section 9.06, the Trustee
shall join with the Company in the execution of such amended or supplemental
Indenture unless such amended or supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may, but shall not be obligated to, enter into such amended or
supplemental indenture.

It shall not be necessary for the consent of the Holders of Securities
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Securities affected thereby
a notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. However, without the consent of the Holders of all of the

38

affected Securities, an amendment, supplement or waiver may not (with respect to
any Security of any Series held by a non-consenting Holder):

(a) reduce the principal amount of Securities whose Holders must consent to
an amendment, supplement or waiver;

(b) reduce the principal amount of or extend the Stated Maturity of any
Security, or alter the provisions with respect to the redemption of the
Securities;

(c) reduce the rate of or extend the time for payment of interest on any
Securities;

(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding and a waiver of
the payment default that resulted from such acceleration);

(e) make any Security payable in money other than that stated in the
Securities;

(f) make any change in Section 6.04 or 6.07;

(g) waive a redemption payment with respect to any Security; or

(h) make any change in the foregoing amendment and waiver provisions of
this Article 9.

Notwithstanding the foregoing, any amendment to the provisions of Article
10 of this Indenture with respect to any Series of Securities shall require the
consent of the Holders of at least 75% in aggregate amount of Securities of such
Series then outstanding (including consents obtained in connection with a tender
offer or exchange for such Securities, if such amendment would adversely affect
the rights of the Holders of the Securities of such Series.

SECTION 9.03. Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Securities shall comply with the TIA as then
in effect.

SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder. An amendment or waiver
becomes effective once both (i) the requisite number of consents have been
received by the Company or the Trustee and (ii) such amendment or waiver has
been executed by the Company and the Trustee.

The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or

39

required or permitted to be taken pursuant to this Indenture. If a record date
is fixed, then notwithstanding the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.

SECTION 9.05. Notation on or Exchange of Securities. The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Security
thereafter authenticated. The Company in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment,
supplement or waiver.

Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06. Trustee to Sign Amendments, Etc.. The Trustee shall sign any
amended or supplemental Indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment
or supplemental Indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture the Trustee shall be entitled to receive
and (subject to Section 7.01) shall be fully protected in relying upon, in
addition to the documents required by Section 10.04, an Officers' Certificate
and an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.

ARTICLE 10

SUBORDINATION

SECTION 10.01. Securities Subordinated to Senior Indebtedness. The Company
covenants and agrees, and each Holder of Securities by his acceptance thereof,
likewise covenants and agrees, that the indebtedness evidenced by the Securities
and the payment of the principal of, premium, if any and interest on each and
all of the Securities is hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, in right of payment to the prior payment in full
of Senior Indebtedness.

Anything in this Indenture or in the Securities to the contrary
notwithstanding, the indebtedness evidenced by the Securities shall be
subordinate and junior in right of payment, to the extent and in the manner
hereinafter set forth, to all Senior Indebtedness. Senior Indebtedness shall
continue to be Senior Indebtedness and entitled to the benefits of these
subordination provisions irrespective of any amendment, modification or waiver
of any term of Senior Indebtedness or extension or renewal of Senior
Indebtedness.

(a) In the event the Company shall default in the payment of any Senior
Indebtedness when the same becomes due and payable, whether at maturity or on a
date fixed for prepayment

40

or by declaration or otherwise, then, unless and until such default shall have
been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property or securities or by set-off or otherwise) shall be
made or agreed to be made on account of the principal of, premium, if any, or
interest on the Securities, or as a sinking fund for the Securities, or in
respect of any redemption, retirement, purchase or other acquisition of any of
the Securities.

(b) Upon the happening of an event of default with respect to any Senior
Indebtedness, permitting the holders thereof to accelerate the maturity thereof
(other than under circumstances when the terms of Section 10.01(a) are
applicable), then, unless and until such event of default shall have been cured
or waived or shall have ceased to exist, no direct or indirect payment (in cash,
property or securities or by set-off or otherwise) shall be made or agreed to be
made on account of the principal of, or premium, if any, or interest on the
Securities, or as a sinking fund for the Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the Securities,
during any period:

(i) of 90 days after written notice of such default shall have been
given to the Company by any holder of Senior Indebtedness; or

(ii) in which any judicial proceeding shall be pending in respect of
such default and a notice of acceleration of the maturity of such Senior
Indebtedness shall have been transmitted to the Company in respect of such
default.

(c) In the event of

(i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding
relating to the Company, its creditors or its property;

(ii) any proceeding for the liquidation, dissolution or other
winding-up of the Company, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings;

(iii) any assignment by the Company for the benefit of creditors; or

(iv) any other marshalling of the assets of the Company.

all Senior Indebtedness (including any interest accruing after the
commencement of such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property,
shall be made to any Holder of Securities on account of the Securities. Any
payment or distribution, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article 10 with
respect to the Securities, to the payment of all Senior Indebtedness at the
time outstanding and to any securities issued in respect thereof under any
such plan of reorganization or readjustment), which would otherwise (but
for the provisions of this Article 10) be payable or deliverable in respect
of the Securities shall be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the

41

priorities then existing among such holders until all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall have been paid in full.

(d) In the event that any Security shall be declared due and payable as the
result of the occurrence of any one or more defaults in respect thereof, under
circumstances when the terms of Section 10.01(c) are not applicable, no payment
shall be made in respect of any Securities unless and until all Senior
Indebtedness shall have been paid in full or such declaration and its
consequences shall have been rescinded and all such defaults shall have been
remedied or waived.

(e) If any payment or distribution of any character or any security,
whether in cash, securities or other property (other than securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in the provisions of this Article 10 with respect to the Securities, to
the payment of all Senior Indebtedness at the time outstanding and to any
securities issued in respect thereof under any such plan or reorganization or
readjustment), shall be received by any Holder of Securities in contravention of
any terms hereof and before all the Senior Indebtedness shall have been paid in
full, such payment or distribution or security shall be received in trust for
the benefit of, and shall be paid over or delivered and transferred to, the
holders of the Senior Indebtedness at the time outstanding, in accordance with
the priorities then existing among such holders for application to the payment
of all Senior Indebtedness remaining unpaid, or, if applicable, to any trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other Person making paying or distribution of assets of the Company, to the
extent necessary to pay all such Senior Indebtedness in full. In the event of
the failure of any Holder of Securities to endorse or assign any such payment,
distribution or security, each holder of Senior Indebtedness is hereby
irrevocably authorized to endorse or assign the same.

(f) Nothing contained herein shall impair, as between the Company and the
Holder of any Securities, the obligation of the Company to pay to the Holder
thereof the principal thereof and interest thereon as and when the same shall
become due and payable in accordance with the terms of such Security, or prevent
the Holder of any Securities from exercising all rights, powers and remedies
otherwise permitted by applicable law or pursuant to the terms of this Indenture
and the Security, upon a default or Event of Default under this Indenture, all
subject to the rights of the holders of the Senior Indebtedness to receive cash,
securities or other property otherwise payable or deliverable to the Holders of
the Securities.

(g) Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash equal to the amount of such
Senior Indebtedness then outstanding. Upon the payment in full of all Senior
Indebtedness, the Holders of Securities shall be subrogated to all rights of any
holders of Senior Indebtedness to receive any further payments or distributions
applicable to the Senior Indebtedness until all amounts owing on the Securities
shall have been paid in full, and such payments or distributions received by the
holders of the Securities by reason of such subrogation, of cash, securities or
other property which otherwise would be paid or distributed to the holders of
Senior Indebtedness, shall, as between the Company and its creditors other than
the holders of Senior Indebtedness, on the one hand, and

42

the Holders of Securities, on the other hand, be deemed to be a payment by the
Company on account of Senior Indebtedness and not on account of Securities.

The Company shall give prompt written notice to the Trustee of any
insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment,
composition or other similar proceeding relating to the Company within the
meaning of this Section 10.01. Upon any payment or distribution of assets of the
Company referred to in this Article 10, the Trustee, subject to the provisions
of Section 7.01, and the Holders of Securities shall be entitled to rely upon a
certificate of the trustee in bankruptcy, receiver, assignee for the benefit of
creditors or other liquidating agent making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the person entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10.

In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Section 10.01, the Trustee may request such person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such person, as to the extent to which such person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such person under this Section 10.01, and if such
evidence is not furnished, the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.

SECTION 10.02. Effectuation of Subordination by Trustee. Each Holder of
Securities, by his acceptance thereof, authorizes and directs the Trustee in his
behalf to take such action as may be necessary or appropriate to effectuate, as
between the Holders of the Securities and the holders of Senior Indebtedness,
the subordination provided in this Article 10 and appoints the Trustee his
attorney-in-fact for any and all such purposes.

SECTION 10.03. Knowledge of Trustee. Nothing contained in this Article 10
or elsewhere in this Indenture, shall (a) prevent the Company from setting aside
in trust or depositing with the Trustee or any Paying Agent, at any time, except
during the pendency of any of the proceedings or upon the happening or
continuance of any of the events referred to in Section 10.01, moneys for the
payment of principal of, or premium, if any, or interest on, the Securities, or
(b) prevent the application by the Trustee or Paying Agent of any moneys
deposited with it hereunder by or on behalf of the Company to the payment of or
on account of the principal of, or the premium, if any, or interest on the
Securities, if the Trustee or the Paying Agent, as the case may be, did not have
written notice of any event prohibiting such application by the close of
business on the Business Day immediately prior to the date of such application.

Notwithstanding the provisions of this Article or any other provisions of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any Senior Indebtedness or of any default or event of default with respect to
any Senior Indebtedness or any fact or facts which would prohibit the making of
any payment of moneys to or by the Trustee, or the taking of

43

any other action by the Trustee, unless and until the Trustee shall have
received written notice thereof from the Company, any Holder of Securities, any
paying or conversion agent of the Company or the holder or representative of any
class of Senior Indebtedness who shall have been certified by the Company or
otherwise established to the reasonable satisfaction of the Trustee to be such
holder or representative or by the trustee under any indenture pursuant to which
Senior Indebtedness shall be outstanding.

SECTION 10.04. Trustee's Relation to Senior Indebtedness. The Trustee shall
be entitled to all rights set forth in this Article 10 with respect to any
Senior Indebtedness at the time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in Section 7.11 or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall subordinate to Senior Indebtedness the claims of, or
payments to, the Trustee under or pursuant to Section 7.07.

With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 10 and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee and the Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and shall not be
liable to any holder of Senior Indebtedness if it shall pay over or deliver to
Holders, the Company or any other Person monies or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.

SECTION 10.05. Rights of Holders of Senior Indebtedness Not Impaired. No
right of any present or future holder of any Senior Indebtedness to enforce the
subordination herein shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or by any non-compliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.

ARTICLE 11

NOTE GUARANTEES

SECTION 11.01. Guarantee. Subject to this Article 10, the Guarantor hereby 
unconditionally guarantees to each Holder of Securities issued by AREP Finance, 
authenticated and delivered by the Trustee and to the Trustee and its 
successors and assigns, irrespective of the validity and enforceability of this 
Indenture, the Securities or the obligations of the Company hereunder or 
thereunder, that:

the principal of, premium and liquidated damages, if any, and interest
on, the Notes will be promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and

in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, that 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.

Failing payment when due of any amount so guaranteed or any performance so 
guaranteed for whatever reason, the Guarantor will pay the same immediately. 
The Guarantor agrees that this is a guarantee of payment and not a guarantee of 
collection.

The Guarantor hereby agrees that its obligations hereunder are 
unconditional, irrespective of the validity, regularity or enforceability of 
the Securities or this Indenture, the absence of any action to enforce the 
same, any waiver or consent by any Holder of the Securities with respect to any 
provisions hereof or thereof, the recovery of any judgment against the Company, 
any action to enforce the same or any other circumstance which might otherwise 
constitute a legal or equitable discharge or defense of a guarantor. The 
Guarantor hereby waives diligence, presentment, demand of payment, filing of 
claims with a court in the event of insolvency or bankruptcy of the Company, 
any right to require a proceeding first against the Company, protest, notice 
and all demands whatsoever and covenant that this Guarantee will not be 
discharged except by complete performance of the obligations contained in the 
Securities and this Indenture.

If any Holder or the Trustee is required by any court or otherwise to 
return to the Company, the Guarantor or any custodian, trustee, liquidator or 
other similar official acting in relation to either the Company or the 
Guarantor, any amount paid by either to the Trustee or such Holder, this 
Guarantee, to the extent theretofore discharged, will be reinstated in full 
force and effect.

The Guarantor agrees that it will not be entitled to any right of 
subrogation in relation to the Holders in respect of any obligations guaranteed 
hereby until payment in full of all obligations guaranteed hereby. The 
Guarantor further agrees that, as between the Guarantor, on the one hand, and 
the Holders and the Trustee, on the other hand, (1) the maturity of the 
obligations guaranteed hereby may be accelerated as provided in Article 6 
hereof for the purposes of this Guarantee, notwithstanding any stay, injunction 
or other prohibition preventing such acceleration in respect of the obligations 
guaranteed hereby, and (2) in the event of any declaration of acceleration of 
such obligations as provided in Article 6 hereof, such obligations (whether or 
not due and payable) will forthwith become due and payable by the Guarantor for 
the purpose of this Guarantee.

SECTION 11.02. Limitation on Guarantor Liability. The Guarantor, and by 
its acceptance of Securities, each Holder, hereby confirms that it is the 
intention of all such parties that the Guarantee not constitute a fraudulent 
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent 
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or 
state law to the extent applicable to any Guarantee. To effectuate the 
foregoing intention, the Trustee, the Holders and the Guarantor hereby 
irrevocably agree that the obligations of such Guarantor will be limited to the 
maximum amount that will, after giving effect to such maximum amount and all 
other contingent and fixed liabilities of the Guarantor that are relevant under 
such laws.

SECTION 11.03. Execution and Delivery of Guarantee. To evidence its 
Guarantee set forth in Section 10.01 hereof, the Guarantor hereby agrees that a 
notation of such Note Guarantee will be endorsed by an Officer of the Guarantor 
on each Security authenticated and delivered by the Trustee and that this 
Indenture will be executed on behalf of the Guarantor by one of its Officers.

The Guarantor hereby agrees that its Guarantee set forth in Section 10.01 
hereof will remain in full force and effect notwithstanding any failure to 
endorse on the Securities a notation of such Guarantee.

If an Officer whose signature is on this Indenture or on the Guarantee no 
longer holds that office at the time the Trustee authenticates the Securities 
on which a Guarantee is endorsed, the Guarantee will be valid nevertheless.

The delivery of any Securities by the Trustee, after the authentication 
thereof hereunder, will constitute due delivery of the Guarantee set forth in 
this Indenture on behalf of the Guarantor.

ARTICLE 12

MISCELLANEOUS

SECTION 12.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), the imposed duties shall control.

SECTION 12.02. Notices. Any notice or communication by the Company or the
Trustee shall be in writing and delivered in person or mailed by first class
mail (registered or certified, return receipt requested) or by overnight air
courier guaranteeing next day delivery, as follows:

If to the Company:

American Real Estate Partners, L.P.

44

American Real Estate Finance Corp.
100 South Bedford Road
Mount Kisco, New York 10549
Telecopy: (914) 242-9282
Attention: Felicia Buebel, Esq.

With a copy to:

DLA Piper Rudnick Gray Cary US LLP
1251 Avenue of the Americas
New York, New York 10020
Telecopy: (212) 835-6001
Attention: Steven L. Wasserman, Esq.

If to the Trustee:

Wilmington Trust Company Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Telecopier No.: (302) 636-4140
Attention: Michael G. Oller

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

Any notice or communication to a Holder shall be mailed to its address
shown on the register kept by the Registrar and shall be sufficiently given if
so mailed within the time prescribed.

Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it.

If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.

SECTION 12.03. Communication by Holders of Securities with Other Holders of
Securities. Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish, at the request of the Trustee, to the
Trustee:

45

(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and

(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.

SECTION 12.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

(a) statement that the Person making such certificate or opinion has read
such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(c) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and

(d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been satisfied.

SECTION 12.06. Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The
Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.

SECTION 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder of the
Company as such shall have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Securities
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities.

SECTION 12.08. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE SECURITIES 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.

SECTION 12.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

46

SECTION 12.10. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.

SECTION 12.11. Severability. In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

SECTION 12.12. Counterpart Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

SECTION 12.13. Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.

[Signatures on following page]

47

SIGNATURES

Dated as of __________ __, 20[__]       AMERICAN REAL ESTATE PARTNERS, L.P.

By: American Property Investors, Inc. ,
its general partner

By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------

[Signature Page to Base Indenture]

Dated as of __________ __, 20[__]       AMERICAN REAL ESTATE FINANCE CORP.

By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------

[Signature Page to Base Indenture]

Dated as of __________ __, 20[__]       WILMINGTON TRUST COMPANY

By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------

[Signature Page to Base Indenture]

DLA Piper Rudnick Gray Cary US LLP
1251 Avenue of the Americas
New York, New York 10020-1104
T 212.835.6000
F 212.835.6001
W www.dlapiper.com

April 21, 2006

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549

Ladies and Gentlemen:

We have acted as counsel to American Real Estate Partners, L.P., a Delaware
limited partnership ("AREP"), and American Real Estate Finance Corp. ("AREP
Finance"), with respect to the preparation and filing of a Registration
Statement on Form S-3 (File No. 333-126069) with the Securities and Exchange
Commission (the "Commission") on June 23, 2005, as amended by Amendment No. 1 to
such Registration Statement to be filed with the Commission as of the date
hereof (as amended, the "Registration Statement"), in connection with the offer
and sale by AREP from time to time, pursuant to Rule 415 under the Securities
Act of 1933, as amended (the "Securities Act"), of:

(a) depositary units representing limited partner interests in AREP (the
"Depositary Units");

(b) preferred units of AREP having rights senior to the Depositary Units
(the "Preferred Units");

(c) debt securities, which may be co-issued by AREP Finance, and which may
be either senior debt securities or subordinated debt securities (the "Debt
Securities");

(d) a guarantee by AREP (the "Guarantee") with respect to any Debt
Securities issued by AREP Finance; and

(e) warrants to purchase Depositary Units, Preferred Units or Debt
Securities evidenced by warrant certificates independently or together with
any securities offered by a prospectus supplement (the "Warrants").

The Depositary units, the Preferred Units, the Debt Securities, the Guarantee
and the Warrants are collectively referred to herein as the "Securities" and
each, a "Security."

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
April 21, 2006
Page 2

In connection with the opinions expressed herein, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such corporate
or comparable documents, certificates of public officials and officers and
representatives of the general partner of AREP and the officers and
representatives of AREP Finance, and such other documents, records and
instruments, and we have made such inquiries of such officers and
representatives of the general partner of AREP and the officers and
representatives of AREP Finance, as we have deemed necessary or appropriate as a
basis for our opinion. In our examination, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. Based on the foregoing,
and subject to further limitations, qualifications and assumptions set forth
herein, we are of the opinion that:

(a) The Depositary Units, upon receipt by AREP of such lawful consideration
therefor as the Board of Directors of the general partner of AREP (or a
duly authorized committee thereof) may determine, will be validly issued,
fully paid and nonassessable.

(b) The Preferred Units, upon receipt by AREP of such lawful consideration
therefor as the Board of Directors of the general partner of AREP (or a
duly authorized committee thereof) may determine, will be validly issued,
fully paid and nonassessable.

(c) The Debt Securities and the Guarantee, upon receipt by AREP and AREP
Finance of such lawful consideration therefor as the Board of Directors of
the general partner of AREP and the Board of Directors of AREP Finance (or
a duly authorized committee thereof) may determine, will constitute valid
and binding obligations of AREP and AREP Finance, respectively.

(d) The Warrants, upon receipt by AREP of such lawful consideration
therefor as the Board of Directors of the general partner of AREP (or a
duly authorized committee thereof) may determine, will constitute valid and
binding obligations of AREP.

In rendering the foregoing opinions, we have assumed that: (i) the Registration
Statement, and any amendments thereto, will have become effective (and will
remain effective at the time of issuance of any Securities thereunder); (ii) a
prospectus supplement describing each class and/or series of Securities offered
pursuant to the Registration Statement, to the extent required by applicable law
and relevant rules and regulations of the Commission, will be timely filed with
the Commission; (iii) the definitive terms of each class and/or series of
Securities will have been established in accordance with the authorizing
resolutions of the Board of Directors of the general partner of AREP and the
Board of Directors of AREP Finance, respectively (or a duly

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
April 21, 2006
Page 3

authorized committee thereof), each of their respective organizational and
governing documents and applicable law; (iv) AREP and AREP Finance will issue
and deliver the Securities in the manner contemplated by the Registration
Statement and any Securities will have been duly authorized and reserved for
issuance; (v) the resolutions authorizing the issuance, offering and sale of the
Securities will have been adopted by the Board of Directors of the general
partner of AREP, if applicable, and the Board of Directors of AREP Finance and
will be in full force and effect at all times at which the Securities are
offered or sold by AREP and, if applicable, AREP Finance; (vi) a definitive
purchase, underwriting or similar agreement with respect to any Securities will
have been duly authorized and validly executed and delivered by the Board of
Directors of the general partner of AREP and the other parties thereto; and
(vii) all Securities will be issued in compliance with applicable federal and
state securities laws.

With respect to any Securities consisting of any series of Debt Securities and
with respect to the Guarantee, we have further assumed that: (i) such Debt
Securities and Guarantee will have been issued pursuant to an applicable
indenture that has been duly authorized, executed and delivered by AREP and AREP
Finance and the applicable trustee in a form approved by us, and such indenture
will have been qualified under the Trust Indenture Act of 1939 and will be
governed by and construed in accordance with New York law; and (ii) such Debt
Securities and Guarantee will be duly executed, authenticated, issued and
delivered in accordance with the provisions of the applicable indenture.

With respect to any Securities consisting of Preferred Units, we have further
assumed that AREP issues and delivers the units after an amendment to its
partnership agreement establishing the designations, preferences and rights of
the class or series of the Preferred Units being issued, and duly authorized,
executed and delivered by the general partner of AREP.

With respect to any Securities consisting of Warrants, we have further assumed
that (i) a Warrant agreement relating to the Warrants (the "Warrant Agreement")
to be entered into between AREP and an entity selected by AREP to act as the
Warrant agent (the "Warrant Agent") will have been duly authorized, executed and
delivered by the general partner of AREP, and (ii) the Warrants will be duly
authorized, executed and delivered by the general partner of AREP and the
Warrant Agent in accordance with the provisions of the Warrant Agreement.

The opinion expressed above is limited by, subject to and based on the
assumptions, limitations and qualifications set forth below:

American Real Estate Partners, L.P.
American Real Estate Finance Corp.
April 21, 2006
Page 4

(a) The validity and binding effect of the Securities may be limited or
affected by bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other similar laws relating to or affecting creditors' rights
generally and by general equitable principles (regardless of whether such
validity and binding effect are considered in a proceeding in equity or at
law), and may be limited by applicable laws or policies underlying such
laws.

(b) The foregoing opinion is limited to the laws of the State of New York
and the Delaware General Corporation Law and the Delaware Revised Uniform
Limited Partnership Act. We do not express any opinion herein concerning
the laws of any other jurisdiction.

We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the prospectus included in the Registration
Statement. In giving this consent, we do not thereby admit that we are included
in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission.

Very truly yours,

/s/ DLA PIPER RUDNICK GRAY CARY US LLP

 

Exhibit 12.1

AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Years Ended December 31,	 	
 	 	2005	 	 	2004	 	 	2003	 	 	2002	 	 	2001	 	
Income from continuing operations before income taxes, income or loss from equity investees and minority interest	 	$	(41,918)	 	 	$	89,182	 	 	$	40,047	 	 	$	53,863	 	 	$	61,167	 	
Fixed Charges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	 	 	98,931	 	 	 	59,783	 	 	 	38,545	 	 	 	37,063	 	 	 	44,336	 	
Amortized capitalized expenses related to indebtedness	 	 	5,083	 	 	 	2,400	 	 	 	320	 	 	 	191	 	 	 	178	 	
Estimated interest within rental expense	 	 	1,287	 	 	 	486	 	 	 	552	 	 	 	585	 	 	 	557	 	
Amortization of capitalized interest	 	 	255	 	 	 	559	 	 	 	559	 	 	 	494	 	 	 	475	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings as defined	 	$	63,638	 	 	$	152,410	 	 	$	80,023	 	 	$	92,196	 	 	$	106,713	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed Charges (including capitalized items):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	 	$	98,931	 	 	$	59,783	 	 	$	38,545	 	 	$	37,063	 	 	$	44,336	 	
Interest capitalized	 	 	—	 	 	 	86	 	 	 	300	 	 	 	766	 	 	 	3,064	 	
Amortized capitalized expenses related to indebtedness	 	 	5,083	 	 	 	2,400	 	 	 	320	 	 	 	191	 	 	 	178	 	
Estimated interest within rental expense	 	 	1,287	 	 	 	486	 	 	 	552	 	 	 	585	 	 	 	557	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed charges as defined	 	$	105,301	 	 	$	62,755	 	 	$	39,717	 	 	$	38,605	 	 	$	48,135	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ratio of earnings to fixed charges	 	 	—	(1)	 	 	2.4	 	 	 	2.0	 	 	 	2.4	 	 	 	2.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(1) Fixed changes exceeded earnings by $41.7 million for 2005.

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Partners of
AMERICAN REAL ESTATE PARTNERS, L.P.

We have issued our reports dated March 10, 2006, except for Note 8, as to which
the date is March 29, 2006, accompanying the consolidated financial statements
and schedule and management's assessment of the effectiveness of internal
control over financial reporting included in the Annual Report of American Real
Estate Partners, L.P. and Subsidiaries on Form 10-K and as amended on Form
10K/A for the year ended December 31, 2005 which are incorporated by reference
in this Registration Statement. We consent to the incorporation by reference in
the Registration Statement of the aforementioned reports and to the use of our
name as it appears under the caption "Experts."

/s/ GRANT THORNTON LLP

New York, New York
April 17, 2006

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of
AMERICAN PROPERTY INVESTORS, INC.

We have issued our report dated April 7, 2006 accompanying the balance sheet of
American Property Investors, Inc. as of December 31, 2005, which is incorporated
by reference in this Registration Statement. We consent to the incorporation by
reference in the Registration Statement of the aforementioned report and to the
use of our name as it appears under the caption "Experts."

/s/ GRANT THORNTON LLP

New York, New York
April 17, 2006

Exhibit 23.3

Consent of Independent Registered Public Accounting Firm

The Partners 
American Real Estate Partners, L.P.:

We consent to the use of our reports dated November 29, 2005, with respect to 
the consolidated statements of operations, changes in partners' equity and 
comprehensive income, and cash flows of American Real Estate Partners, L.P. and
subsidiaries for the year ended December 31, 2003 and the related financial 
statement schedule included in American Real Estate Partners, L.P.'s Annual 
Report on Form 10-K/A for the year ended December 31, 2005, incorporated herein
by reference and to the reference to our firm under the heading "Experts" in 
the prospectus.

/s/ KPMG LLP

New York, New York
April 17, 2006

EXHIBIT 23.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
GB Holdings, Inc. and subsidiaries:

We consent to the use of our report dated March 11, 2005, with respect to 
the consolidated balance sheet of GB Holdings, Inc. and subsidiaries as of
December 31, 2004 and the related consolidated statements of operations, changes
in shareholder's equity, and cash flows for each of the years in the two-year
period ended December 31, 2004, incorporated by reference herein and to the
reference to our firm under the heading "Experts" in the prospectus. Our report
dated March 11, 2005 contains an explanatory paragraph that states that GB
Holdings has suffered recurring net losses, has a net working capital deficiency
and has significant debt obligations which are due within one year that raise
substantial doubt about its ability to continue as a going concern. The
consolidated financial statements and financial statement schedule do not
include any adjustments that might result from the outcome of that uncertainty.

/s/ KPMG LLP

Short Hills, New Jersey
April 17, 2006

EXHIBIT 23.5

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption "Experts" in
Amendment No.1 to the Registration Statement (Form S-3 No. 333-126069) and
related Prospectus of American Real Estate Partners L.P. for the registration
of $1,000,000,000 of its depositary and preferred units (each representing
limited partnership interests), debt securities, and warrants to purchase debt
securities, preferred units or depositary units, and to the incorporation by
reference therein of our report dated August 3, 2005, (except Note 18 as to
which the date is August 8, 2005) with respect to the consolidated financial 
statements of WestPoint Stevens Inc. as of December 31, 2004 and 2003 and for
each of the three years in the period ended Decemeber 31, 2004 included in
American Real Estate Partners L.P.'s Form 8-K/A dated October 21, 2005, filed
with the Securities and Exchange Commission.

/s/ ERNST & YOUNG LLP
Atlanta, Georgia
April 17, 2006

EXHIBIT 23.6

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

We hereby consent to the incorporation of the references to DeGolyer and
MacNaughton and to the use by reference of information contained in our
"Appraisal Report as of December 31, 2003 on Certain Properties owned by NEG
Operating LLC," "Appraisal Report as of December 31, 2004 on Certain Properties
owned by NEG Operating LLC," and "Appraisal Report as of December 31, 2005 on
Certain Properties owned by NEG Operating LLC" (our Reports) in the "Experts"
section of the American Real Estate Partners, L.P. Form S-3 (Registration
Statement).

We further consent to the reference to DeGolyer and MacNaughton as experts
in the Form S-3, including the prospectus included therein.

Very truly yours,

/s/ DeGolyer and MacNaughton
----------------------------
DeGOLYER and MacNAUGHTON

Dallas, Texas
April 17, 2006

Exhibit 23.7

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

As independent petroleum engineers and geologists, we hereby consent to the 
inclusion of the information included or incorporated by reference in this 
Registration Statement Form S-3 with respect to the oil and gas reserves of NEG 
Operating LLC, as of December 31, 2003; December 31, 2004; and December 31, 
2005, which information has been included or incorporated by reference in this 
Registration Statement Form S-3 in reliance upon the reports of this firm and 
upon the authority of this firm as experts in petroleum engineering. We hereby 
further consent to all references to our firm included in this Registration 
Statement Form S-3.

NETHERLAND, SEWELL & ASSOCIATES, INC.

By: /s/ Frederic D. Sewell, P.E.
------------------------------------
Frederic D. Sewell, P.E.
Chairman and Chief Executive Officer

Dallas, Texas
April 17, 2006

Exhibit 23.8

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

As independent petroleum engineers and geologists, we hereby consent to the
inclusion of the information included or incorporated by reference in this
Registration Statement Form S-3 with respect to the oil and gas reserves of
National Onshore LP, as of December 31, 2003; December 31, 2004; and 
December 31, 2005, which information has been included or incorporated by 
reference in this Registration Statement Form S-3 in reliance upon the reports 
of this firm and upon the authority of this firm as experts in petroleum 
engineering. We hereby further consent to all references to our firm included 
in this Registration Statement Form S-3.

NETHERLAND, SEWELL & ASSOCIATES, INC.

By: /s/ Frederic D. Sewell, P.E.
____________________________________ 
Frederic D. Sewell, P.E.
Chairman and Chief Executive Officer

Dallas, Texas
April 17, 2006

Exhibit 23.9

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

As independent petroleum engineers and geologists, we hereby consent to the 
inclusion of the information included or incorporated by reference in this 
Registration Statement Form S-3 with respect to the oil and gas reserves of 
National Offshore LP as of December 31, 2004, and December 31, 2005, which 
information has been included or incorporated by reference in this Registration 
Statement Form S-3 in reliance upon the reports of this firm and upon the 
authority of this firm as experts in petroleum engineering. We hereby further 
consent to all references to our firm included in this Registration Statement 
Form S-3.

NETHERLAND, SEWELL & ASSOCIATES, INC.

By: /s/ Frederic D. Sewell, P.E.
---------------------------------
Frederic D. Sewell, P.E.
Chairman and Chief Executive Officer

Dallas, Texas
April 17, 2006

EXHIBIT 23.10

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS

We hereby consent to the reference to Prator Bett, L.L.C. and to the use by
reference of information contained in our reports dated January 19, 2005 and
February 13, 2004, presenting "Estimated Future Reserves and Revenues" effective
December 31, 2004 and December 31, 2003, respectively (our Reports) of certain
properties then owned by NEG Operating LLC in the "Experts" section of Amendment
No. 1 of Form S-3 Registration Statement of American Real Estate Partners, L.P.
and American Real Estate Finance Corp. However, since the estimates of crude oil
and natural gas reserves set forth in our Report have been combined with reserve
estimates of other petroleum consultants, we are necessarily unable to verify
the accuracy of the reserves estimates contained in the aforementioned
Registration Statement.

/s/ M. Drayton Prator
----------------------------
PRATOR BETT, L.L.C
Houston, Texas

April 17, 2006