EXHIBIT 10.44
[Face of Note]
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CUSIP/CINS 029169 AA7
Variable Rate Senior Convertible Notes due 2013
No. ___
$____________
AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN
REAL ESTATE FINANCE CORP.
promises to pay to ______________________________________or
registered assigns,
the principal sum of
___________________________________________________DOLLARS
on August 15, 2013.
Interest Payment Dates: January 15, April 15, July 15 and
October 15
Record Dates: January
1, April 1, July 1 and October 1
Dated:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc.,its general partner
By:_____________________________________________________
Name:
Title:
AMERICAN REAL ESTATE FINANCE CORP.
By:_____________________________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By: ______________________
Authorized
Signatory
<PAGE>
[Back of Note]
Variable Rate Senior Convertible Notes due 2013
THIS GLOBAL
NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL
OWNERS HEREOF, AND IS
NOT TRANSFERABLE
TO ANY PERSON UNDER
ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY
BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (3)
THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED
TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE
PARTNERS, L.P.
UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR
ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION
OF TRANSFER,
EXCHANGE OR PAYMENT,
AND ANY
CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER
NAME AS MAY BE
REQUESTED BY AN
AUTHORIZED
REPRESENTATIVE
OF DTC (AND ANY
PAYMENT IS MADE TO
CEDE & CO.
OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF
DTC), ANY TRANSFER,
PLEDGE OR OTHER USE
HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT
FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF
1933, AS AMENDED
(THE "SECURITIES ACT") AND THE SECURITY
EVIDENCED HEREBY AND
THE DEPOSITARY UNITS
ISSUABLE UPON CONVERSION HEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN
APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED
HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT. THE HOLDER
OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF AMERICAN REAL ESTATE
PARTNERS, L.P. AND AMERICAN REAL ESTATE FINANCE CORP. THAT (A) SUCH
SECURITY AND
THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED
ONLY (1) (a) IN THE
UNITED STATES TO A PERSON WHO THE
SELLER REASONABLY
BELIEVES IS A
QUALIFIED
INSTITUTIONAL BUYER
(AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF
RULE 144A,
(b) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A
TRANSACTION
MEETING
THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR"
(AS DEFINED IN RULE
501 (a) (1), (2), (3)
OR (7) OF THE
SECURITIES ACT) THAT,
PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED
<PAGE>
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
(THE FORM OF WHICH CAN
BE OBTAINED
FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS
THAN $250,000, AN
OPINION OF COUNSEL
ACCEPTABLE TO AMERICAN
REAL ESTATE
PARTNERS, L.P. THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE
WITH ANOTHER
EXEMPTION
FROM THE REGISTRATION
REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF AMERICAN REAL ESTATE PARTNERS, L.P. SO REQUESTS), (2) TO
AMERICAN REAL ESTATE PARTNERS, L.P. OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN
(A) ABOVE. IF AT ANY
TIME THE NEVADA GAMING
COMMISSION FINDS THAT
A HOLDER OF
THIS SECURITY
OR THE DEPOSITARY UNITS ISSUABLE UPON CONVERSION HEREOF IS
UNSUITABLE TO CONTINUE
TO OWN THE SECURITY (OR THE DEPOSITARY UNITS ISSUABLE
UPON CONVERSION
HEREOF), AMERICAN REAL ESTATE PARTNERS, L.P. SHALL HAVE THE
RIGHT TO REQUIRE SUCH HOLDER TO DISPOSE OF SUCH SECURITY OR
DEPOSITARY UNITS, AS
APPLICABLE, AS
PROVIDED BY THE GAMING LAWS OF THE STATE OF NEVADA AND THE
REGULATIONS
PROMULGATED
THEREUNDER.
ALTERNATIVELY,
AMERICAN REAL
ESTATE
PARTNERS, L.P. SHALL
HAVE THE RIGHT TO REDEEM THE SECURITY FROM THE HOLDER AT A
PRICE SPECIFIED IN THE INDENTURE GOVERNING THE SECURITY.
NEVADA GAMING LAWS
AND
REGULATIONS RESTRICT
THE RIGHT UNDER CERTAIN CIRCUMSTANCES: (A) TO PAY OR
RECEIVE ANY INTEREST UPON SUCH SECURITY; (B) TO EXERCISE, DIRECTLY OR THROUGH
ANY TRUSTEE OR NOMINEE, ANY VOTING RIGHT CONFERRED BY SUCH
SECURITY; OR (C)
TO
RECEIVE ANY REMUNERATION IN ANY FORM FROM AMERICAN REAL ESTATE
PARTNERS, L.P.,
FOR SERVICES RENDERED OR OTHERWISE.
Capitalized terms used herein have the meanings assigned to them in
the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. American
Real Estate Partners, L.P., a Delaware limited
partnership ("AREP"),
and American Real Estate Finance Corp. ("AREP
Finance", together
with AREP, the
"Company"), promise to
pay interest on
the
principal amount of this Note at the interest rate set forth below
from
April 5, 2007 until maturity and shall pay the Additional Interest,
if any,
payable pursuant to Section 2 of the Registration Rights Agreement
referred
to
below. The Company
will pay interest and Additional Interest, if any,
quarterly in arrears
on January 15,
April 15, July 15 and October 15 of
each
year, or if any such day is not a Business Day, on the next
succeeding
Business Day (each, an "Interest Payment Date"). Interest on the
Notes will
accrue from the most recent date to which interest has been paid or, if
no
interest has been paid, from April 5, 2007; provided that if there is no
existing Default
in the payment of interest, and if this Note is
authenticated between
a record date referred to on the face hereof and the
next
succeeding Interest Payment Date, interest shall accrue from such
next
succeeding Interest
Payment Date; provided further that the first Interest
Payment Date shall be
July 15, 2007 and the
last interest
payment date
shall be August 15, 2013 (the "Maturity Date"). Interest on the Notes (the
"Interest Rate")
shall accrue at a rate equal to LIBOR
minus one and one
quarter percent (1.25%) per annum; provided that the Interest Rate
shall at
no
time be less than four
percent (4.0%) per
annum nor greater than
five
and
one half percent
(5.5%) per annum. The
applicable
Interest Rate in
respect of the Notes shall be determined by the Calculation
Agent for each
quarterly interest
period on the last Trading Day of the immediately
preceding quarterly
period. The Company will pay interest (including
post-petition interest
in any proceeding under any Bankruptcy Law) on
overdue principal
and premium,
if any, from time to time on demand at
a
rate
that is 1% per
annum in excess of the rate then in effect to the
extent lawful; it will pay interest (including post-petition interest in
any
proceeding
under any Bankruptcy Law) on overdue installments of
interest and Additional Interest, if any, (without regard to any
applicable
grace periods)
from time to time on
demand at the same rate to the extent
lawful. Interest will
be computed on the basis of a 360-day year of twelve
30-day months.
<PAGE>
(2) METHOD
OF PAYMENT. The Company will pay or cause to be paid
interest on the Notes (except defaulted interest) and Additional
Interest,
if
any, to the Persons who are registered Holders of Notes at the close
of
business on the January 1, April 1, July 1 and October 1 next
preceding the
Interest Payment Date,
even if such Notes are
canceled after such
record
date
and on or before such
Interest Payment
Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest.
The Notes
will
be payable as to principal, premium and Additional Interest,
if any,
and
interest at the office or agency of the
Company maintained
for such
purpose within or without the City and State of New York, or, at
the option
of
the Company, payment of interest and Additional Interest, if any,
may be
made
by check mailed to the
Holders at their
addresses set forth in the
register of
Holders; provided that, in respect of any Holder with an
aggregate principal amount of Notes in excess of $2,000,000, at the
request
of
such Holder in writing to the Company, interest on such Holder's
Notes
shall be paid by wire transfer in immediately available funds. Such
payment
will
be in such coin or currency of the United States of America as at the
time
of payment is legal tender for payment of public and private
debts.
(3) REGISTRAR, PAYING
AGENT, CONVERSION
AGENT AND CALCULATION AGENT.
Initially, Wilmington
Trust Company, the Trustee under the Indenture, will
act as Registrar, Paying
Agent, Conversion Agent and Calculation Agent. The
Company may change any Registrar, Paying Agent or Calculation Agent
without
notice to any Holder. The Company or any of its Subsidiaries may
act in any
such
capacity.
(4) INDENTURE. The
Company issued the Notes under an Indenture dated
as
of April 5, 2007 (the "Indenture") among the Company, the Guarantor and
the
Trustee. The terms of
the Notes include
those stated in the Indenture
and
those made part of the Indenture by reference to the TIA. The Notes
are
subject to all such terms, and Holders are referred to the
Indenture and
such
Act for a statement of such terms. To the extent any provision of
this
Note
conflicts with the express provisions of the Indenture, the
provisions
of
the Indenture shall govern and be controlling. The Notes are unsecured
obligations of the Company.
(5) REDEMPTION
PURSUANT TO GAMING LAWS. If any Gaming Authority
requires that a Holder or Beneficial Owner of Notes be licensed,
qualified
or
found suitable
under any applicable Gaming Law and such Holder or
Beneficial Owner:
(a) fails to apply for a license, qualification or a finding of
suitability within 30
days (or such shorter period as may be required
by the applicable
Gaming Authority) after being requested to do so by
the Gaming Authority; or
(b) is denied such license or qualification or not found
suitable;
AREP
shall then have the right, at its option:
<PAGE>
(a) to require each suc
